PARIS (Agefi-Dow Jones)–The Brazilian competition authority has conditionally authorized the takeover of local distributor Grupo BIG by Carrefour, the Brazilian subsidiary of the tricolor group announced on Wednesday evening.
According to the concentration agreement established by the Brazilian regulator, Grupo BIG will have to sell at the closing of the transaction a total of 14 stores, which represents 3.6% of its store base at the end of 2021 and 6% of its revenue from last year.
This condition for the completion of the acquisition of Grupo BIG by Carrefour is less restrictive than that envisaged at the beginning of the year by the competition authority, which concerned the sale of around 10% of the store network.
Carrefour announced in March 2021 that it had reached an agreement with Advent International and Walmart for the acquisition of Grupo BIG, for an enterprise value of 7 billion reals, or 1.36 billion euros. The transaction should be settled in cash and shares of Carrefour Brazil.
The success of this acquisition would make Carrefour an undisputed leader in the Brazilian market. Its local assets and those of Grupo BIG offer strong geographical complementarity and will enable the French distributor to establish itself in a new market segment with the Sam’s Club format, via a license agreement with Walmart. This unique and highly profitable premium business model is membership-based, with over 2 million members.
The synergies targeted will be achieved thanks to the increase in commercial density, the alignment of margins between the different brands, the optimization of central costs or even thanks to better logistics efficiency, assured Carrefour in the spring of 2021.
-Dimitri Delmond, Agefi-Dow Jones; +33 (0)1 41 27 47 31; [email protected] ed: LBO
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May 26, 2022 01:28 ET (05:28 GMT)