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SAO PAULO – Carrefour Brasil (CRFB3) announced on Wednesday (24) that it entered into an agreement with Advent International and Walmart for the acquisition of all the shares issued by the BIG Brasil Group for the total amount of R $ 7.5 billion, or for a company value (firm value, the sum of the assets and obligations of a company) estimated at R $ 7 billion.
According to the retailer, the acquisition will expand Carrefour Brasil’s presence in a very dynamic market and allow it to offer Brazilian consumers a wider range of products and services, at more competitive prices.
The GRAND Group has 387 stores, 41 thousand employees, a presence in 19 Brazilian states and registered R $ 24.9 billion in gross sales in 2020. The combination will create a group with gross sales of approximately R $ 100 billion and approximately 137 thousand employees operating in all formats, Carrefour highlighted in a statement.
“The acquisition of the BIG Group will expand Carrefour Brasil’s presence in regions where it has limited penetration, such as the Northeast and South of the country, and which offer strong growth potential. The BIG Group chain of stores, therefore, presents a strong geographic complementarity ”, highlighted the retailer.
In addition, he said in the statement, it allows Carrefour Brasil to expand its traditional formats (mainly Wholesale and Hypermarkets). The transaction will also strengthen Carrefour Brasil’s presence in formats in which it has a more limited presence, in particular supermarkets (99 Bompreço and Nacional stores) and soft discount (97 Todo Dia stores).
In addition, the Carrefour Brasil Group will operate in a new market segment with the Sam’s Club format, through a license agreement with Walmart Inc. “This unique, premium and highly profitable business model, aimed at the B2C segment, is based on a system of members, with more than 2 million members, and with a strong focus on private label products ”, he highlights.
According to Carrefour, the payment of the transaction will be 70% in cash and 30% through the issuance of new shares of the Carrefour Brasil Group. “The payment in Carrefour Brasil shares materializes the confidence of the sellers in the valuation of the Carrefour Brasil Group, as well as in a rapid capture of synergies with a relatively low execution risk. As soon as the transaction is completed, the Carrefour Group will have a 67.7% stake in Carrefour Brasil (compared to the current 71.6%) and Peninsula Participações 7.2%, while Advent and Walmart together will have a stake of 5.6% ”, he points out.
The transaction is subject to the approval of the regulatory body (Consejo Administrativo de Defensa Económica – CADE), approval of the shareholders of the Carrefour Brasil Group, as well as other customary closing conditions. The transaction is expected to be completed in 2022.
“The acquisition of BIG Group marks a great step in our development, expanding our geographic presence in certain states, expanding our operations in formats, as well as adding a very promising model that we do not yet operate – Sam’s Club. Together, our offer will be even more attractive, complete and competitive, benefiting the purchasing power of Brazilian consumers and adding millions of clients to our ecosystem. It is with great satisfaction that we welcome the BIG Group teams, who have done an excellent job, initiating the transformation of the company in recent years. This is undoubtedly a very important milestone in the history of the Carrefour Brazil Group, and points to a strong acceleration of growth in the coming years ”, said Noël Prioux, CEO of the Carrefour Brazil Group.
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