Carrefour Acquires Makro Atacadista For $450+ Million
BRAZIL - We haven’t heard much from the French retailer Grupo Carrefour since it entered a strategic buying alliance with Tesco in 2018. However, the company recently announced that its Brazilian division has signed an agreement with Makro Atacadista SA to acquire 30 Cash & Carry stores in Brazil, accelerating the expansion of its growing Atacadão format.
“This transaction is Carrefour Group’s most significant move in Brazil since the acquisition of Atacadão in 2007,” Alexandre Bompard, Chairman and CEO, declared in a press release. “It underscores our strong commitment to expanding our growth formats, in line with the Carrefour 2022 Transformation Plan. With this transaction, we further expand our presence in the Brazilian market, the group’s second-biggest after France.”
The acquisition involves 30 stores (including the real estate of 22 of those, which are fully owned, and another 8 rented stores) and 14 gas stations, located in 17 states across Brazil. The transaction is valued at 420 million Euros (roughly $453 million USD), to be paid in cash, according to a press release.
“This transaction represents a growth accelerator for Carrefour in Brazil. With this acquisition, Atacadão will strengthen its footprint and further consolidate its presence in Brazil,” Noël Prioux, CEO of Grupo Carrefour Brasil, added. “Combined with our organic growth pace, with 20 new Atacadão stores opened in 2019, this acquisition corresponds to one year and a half of expansion and is a significant step for Grupo Carrefour Brasil.”
The 30 stores, totaling 165,000 square meters (roughly 1.7 square feet) of sales area, posted gross sales of around 2.8 billion Reais (roughly $642 million USD) in 2019 and offer strong geographic complementarity with the existing Atacadão network. The acquisition will allow Atacadão to expand its presence, notably in the densely populated state of Rio de Janeiro (7 stores) and in the Northeast region (8 stores). The new stores will add to Atacadão’s existing network of 187 stores, while the company also continues its strong organic growth.
Carrefour plans to convert these stores to its Atacadão banner during the 12 months following the closing of the transaction.
Based on the Atacadão model, the retailer expects sales to increase by more than 60 percent and the cost structure to be optimized, making it possible to gradually achieve profitability levels close to those of the existing Atacadão network. Closing of the transaction remains subject to certain customary conditions, notably including agreement by the owners of the rented properties and approval by CADE, Brazil’s anti-trust authority. The company shall maintain its shareholders and the market in general informed about the conclusion of the transaction.
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