France’s Carrefour has agreed to buy 30 stores from rival retailer Makro’s Brazilian subsidiary for $453.69 million (R$ 1.95 billion). Makro, whose Latin American stores are owned by Netherlands-based SHV Holdings, will continue to operate in Brazil but only through its 24 stores located in Sao Paulo state. Carrefour bought units in 16 other Brazilian states.
Carrefour is expanding its leadership position in the expanding segment known in Brazil as “atacarejo”, whose hybrid model of stores combine retail and wholesale. It is a segment that is growing three to four times faster than grocery stores.
The French company plans to rebrand its newly-bought Makro stores into Atacadão units within one year after the deal’s conclusion, which depends on the approval of antitrust regulators. Carrefour Brasil recently bought a 49% stake in fintech EWally with plans to launch a digital bank for customers in 2020.
With the new stores, the Carrefour group will reach annual gross sales of almost $15 billion in Brazil and the wholesale arm will turn over $ 10.5 billion – vice-leader Assaí, owned by Pão de Açúcar Group — sold around $7 billion in 2019. Atacadão will count 217 stores in the country, while its closest competitor has 170 stores.
According to Alexandre Bompard, chairman and CEO of the Carrefour Group, the transaction is the most important movement of the Carrefour Group in Brazil since the acquisition of Atacadão in 2007. “It shows our commitment to the expansion of our formats and is in line with the Carrefour 2022 Transformation Plan”, he said in a statement.
“The wholesale model has been a major contributor to the growth of Carrefour in recent years, especially in Brazil. With this transaction, we will expand our presence in the Brazilian market, the second largest market for the group after France ”, he said.