Carrefour Brasil receives an antitrust agreement for the acquisition of Grupo Big Brasil

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The Brazilian Administrative Council for Economic Defense (CADE) has approved, with restrictions, the acquisition of Grupo Big Brasil by Grupo Carrefour Brasil.

In its decision, CADE explained that no competition concerns had been identified in the wholesale distribution and retail service station markets.

However, in the self-service retail segment, the merger of the first and third largest players has the potential to generate the exercise of market power in nine different locations, he added.

Portfolio adjustment

Thus, a Merger Control Agreement (ACC) was negotiated, which provides for the sale of 14 stores, including 11 hypermarkets/stores and 3 supermarkets/soft discount.

These stores represent approximately 3.6% of the network and 6.0% of Grupo Big’s 2021 revenue.

According to Carrefour Brasil, the remedies are significantly below the threshold initially mentioned in the complexity statement issued by CADE (i.e. approximately 10% of BIG’s stores), which was disclosed in January 2022.

Viability, Attractiveness and Competitiveness

The two parties have also undertaken to preserve the viability, attractiveness and competitiveness of the stores that will have to be sold until the finalization of the sale.

The competition authority also established that the companies cannot repurchase the divested assets for a period determined in the agreement, the duration of which is confidential.

In addition, they are required to notify any operation involving supermarkets, hypermarkets, wholesalers and cash & carry stores, even if they do not comply with the parameters for mandatory notification of concentration acts to CADE.

Following CADE’s approval, the parties can already enter into the transaction, which is still contingent on the fulfillment (or waiver, if applicable) of certain conditions precedent set out in the agreement.

Expansion of Carrefour Brazil

This acquisition allows Carrefour Brasil to develop in its traditional formats (in particular cash & carry and hypermarkets) and to strengthen its presence in formats where it is less present, in particular supermarkets (98 Bompreço and Nacional stores), and soft discount (97 Todo Dia stores).

In addition, Carrefour Brasil will operate in a new market segment (B2C) with the Sam’s Club format, via a license agreement with Walmart.

Grupo Big owns the real estate of 181 of its stores (47% of its total network) and 38 additional sites.

© 2022 European Supermarket Magazine – your source for the latest retail news. Article by Branislav Pekic. Click on subscribe to subscribe to the ESM: European Supermarket Magazine.

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