BY Fraser Tennant
In a move that reinforces its leading position in Brazil, multinational retail corporation Carrefour has acquired Brazil’s third-biggest food retailer Grupo BIG in a transaction valued at €1.3bn.
The acquisition strengthens Carrefour Brazil’s presence in a high growth potential market, allowing it to offer Brazilian consumers a broader range of products and services.
The two companies offer strong geographic complementarity, and the transaction will expand Carrefour Brazil’s presence in regions where it has limited penetration, such as the northeast and south of the country, and that offer strong growth potential.
Carrefour is purchasing Grupo BIG, which operates 387 stores and generated sales of $4.51bn (24.9bn reals) in 2020, from Walmart and investment firm Advent International. The transaction will be realised 70 percent in cash and 30 percent through newly issued Carrefour Brazil shares.
“The acquisition of the BIG Group is a major transformation movement for Carrefour Brazil,” said Alexandre Bompard, chairman and chief executive of the Carrefour Group. “In this continental country with immense development prospects, we have accentuated our leadership in the food distribution market over the past three years, and BIG will further strengthen it with very complementary formats and locations.”
Present in Brazil since 1995, Grupo BIG has locations in 19 states, with a larger footprint in the southern and northeastern regions of Brazil.
“Our group is on the offensive,” continued Mr Bompard. “The significant synergies generated by this transaction are a lever for creating additional value and a powerful addition to the profitable growth model that we have established across our group.”
The transaction is subject to the authorisation of the Brazilian antitrust authority (CADE) and the approval of Carrefour Brazil’s shareholders, as well as other customary closing conditions. It is expected to complete in 2022.
Mr Bompard concluded: “The transaction fits perfectly into the Carrefour Brazil ecosystem and into the group's acquisition strategy, centred on the consolidation of our key markets.”
News: French retailer Carrefour buys BIG in Brazil, lifting shares