Carrefour once again crosses the Atlantic Ocean. Not to resume negotiations with the Canadian Couche-Tard, with whom the marriage was thwarted at the start of the year, but to strengthen in Brazil. The food distribution group announced, Wednesday, March 24, the acquisition of Grupo BIG, the third player in the country, from the American investment fund Advent International and the distributor Walmart. The operation of 7 billion Brazilian reals (about 1.1 billion euros) will be financed 70% in cash, the rest in shares of the Brazilian subsidiary of Carrefour. This will lead to the retention of the old shareholders in 5.6% of the new group, of which the French will hold 67.7%.
Established in Brazil since 1975, Carrefour has developed there the hypermarket format dear to the French, to become number one in food distribution in the country, just ahead of Grupo Pao de Açucar (GPA), owned by another French , Casino, according to data from the Brazilian Association of Retail Stores.
A “complementary” network
In 2020, Brazil is the market that provided the strongest growth for the giant led by Alexandre Bompard: a “record” increase of 18.2%, driven by both Carrefour Retail and its food discount brand Atacadao, well above 7.8% increase in turnover for the group, which operates more than 13,000 stores in more than 30 countries.
But in a country where inflation and deflation follow one another against a backdrop of political and social instability, Carrefour had to consolidate its base in order to hope to retain its place. Since assuming the presidency of the group in mid-2017, Mr. Bompard wanted to make an acquisition in Brazil if the opportunity arose. The investment fund Advent had recently expressed its intention to put its 80% of Grupo BIG on the stock market, before doing business with the French group.
Driven by the emergence of a middle class, Brazil has “one of the largest consumer markets”, with 212 million inhabitants in 2019, mostly young
In Brazil, the new entity will generate sales of around 100 billion reals, with 876 stores. “This will represent 20% of Carrefour’s future turnover and nearly 40% of the group’s profitability”, details Alexandre Bompard at World. But the operation above all allows the acquisition of“A network of several types of very complementary stores in regions where we are not present, such as the North-East and the South, continues the CEO. And models that range from the hypermarket to the convenience store through a brand that we will be able to develop, Sam’s Club, which is based on a membership system with 2 million members “.
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