French retail major Carrefour has signed an agreement with its Middle East joint venture partner Majid Al Futtaim (MaF) to divest its stake in the venture in a deal worth €530m.

Under the arrangement, MAF will acquire Carrefour’s 25% stake in Majid Al Futtaim Hypermarkets and will hold 100% ownership in the joint venture.

MAF has renewed the exclusive franchise partnership with the French retailer until 2025 providing it with provisions to extend the business to new markets with new formats.

According to Reuters, MAF is seeking to issue a hybrid bond combining both debt and equity to finance the transaction.

The company has appointed Goldman Sachs and HSBC Holdings as joint structuring advisors to facilitate the sale, alongside Bofa Merrill Lynch, JP Morgan and Standard Chartered Bank as joint bookrunners.

The strategic transaction is expected to fuel the long-term growth of the business, thereby developing the brand in new countries, MAF said in its statement.

Formed in 1995, the joint venture operates 50 hypermarkets and 44 supermarkets under the Carrefour brand in several countries in the Middle East, North Africa and Central Asia.

Carrefour’s move to offload the stake is in line with chain’s divestment spree after it sold its interest in businesses including Greece, Colombia and Indonesia adding $6.5bn to its business value.

The divestments were made to raise funds for investments and strengthen its balance sheet.

MAF, meanwhile, is reported to be mulling to acquire Egypt-based family-owned supermarket chain Mansour Group to expand its
business in wider markets.