in

Carrefour to Buy Brazilian Food Retailer for $1.3 Billion

Carrefour to Buy Brazilian Food Retailer for $1.3 Billion

(Bloomberg) — Carrefour SA is buying Walmart Inc.’s former Brazil unit to cement its position as the country’s largest supermarket operator two months after being the target of a failed takeover bid.

Advent International and Walmart agreed to sell Grupo BIG Brasil SA for about 1.1 billion euros ($1.3 billion), Carrefour said Wednesday. Brazil is already the French retailer’s second-largest market, and the deal would make that business almost as big as the retailer’s European operations outside of France. Shares of Carrefour rose as much as 1.5%.

Chief Executive Officer Alexandre Bompard is embarking on his biggest acquisition to date after the French government blocked a takeover attempt by Canadian convenience store operator Alimentation Couche-Tard Inc. The Brazilian business has been one of Carrefour’s most successful units in recent years, despite high inflation.

“Our group is on the offensive,” Bompard said in a statement.

Carrefour has been active in Brazil since 2007, when it bought discount superstore operator Atacadao for $1.1 billion. Atacadao’s adjusted earnings rose 18% before interest, taxes, depreciation and amortization last year.

Bloomberg Intelligence analyst Charles Allen called it a sensible deal at a good price, noting the expected synergies are almost double the level of Grupo BIG’s Ebitda.

Through the deal, Carrefour will operate a premium chain under the Sam’s Club format in Brazil through a license with Walmart.

Walmart took a step away from Brazil in 2018 when it sold a controlling stake in Grupo BIG, Brazil’s third-largest food retailer, to Advent. Grupo BIG filed to hold an initial public offering in October.

The acquisition, which is subject to Brazil antitrust approval and is expected to complete in 2022, will be realized 70% in cash and 30% through new Carrefour Brazil shares.

Carrefour would reach about 100 billion reais ($18 billion) in annual revenue from Brazil through the acquisition. After the deal, Carrefour would own 67.7% of its Brazil unit, while Advent and Walmart would have 7.2% and 5.6% stakes respectively.

(Updates with shares in second paragraph)

For more articles like this, please visit us at bloomberg.com

Subscribe now to stay ahead with the most trusted business news source.

©2021 Bloomberg L.P.

Published at Wed, 24 Mar 2021 08:15:41 +0000

What do you think?

Written by Riel Roussopoulos

Comments

Leave a Reply

Your email address will not be published. Required fields are marked *

Loading…

0

New data questions delaying some 2nd COVID-19 vaccine doses – CBC News: The National

Carrefour to Buy Brazilian Food Retailer for $1.3 Billion