French supermarket giant Carrefour announced it will buy Brazil’s third-biggest food retailer Grupo BIG from Walmart and investment firm Advent International in a deal that values Grupo BIG at an enterprise value of €1.1 billion.
“The two groups offer strong geographic complementarity, and the transaction will expand Carrefour Brazil’s presence in regionswhere it has limited penetration, such as the northeast and south of the country, and that offer strong growth potential,” said Carrefour, Europe’s largest retailer.
The acquisition will be made 70% in cash and 30% through newly issued Carrefour Brazil shares.
Upon completion of the transaction, Carrefour Group will own around 67.7% of Carrefour Brazil versus 71.6% today, Península Participações 7.2% and Advent International and Walmart, through affiliates, 5.6% combined.
The transaction remains subject to the authorization of the Brazilian antitrust authority (CADE), to the approval of Carrefour Brazil’s shareholders, as well as other customary closing conditions.
Carrefour Group chairman and CEO Alexandre Bompard said in a statement: “Our group is on the offensive: The acquisition of the BIG Group is a major transformation movement for Carrefour Brazil.
“In this continental country with immense development prospects, we have accentuated our leadership in the food distribution market over the past 3 years, and BIG will further strengthen it with very complementary formats and locations.
“The transaction fits perfectly into the Carrefour Brazil ecosystem and into the Group’s acquisition strategy, centered on the consolidation of our key markets.
“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.”