Carrefour joins forces with Grupo Big and extends its network in Brazil
Logos of the Carrefour store in a São Polo store.
REUTERS - Paulo Whitaker
Text by: Ariane Gaffuri Follow
4 min
After the failure of its alliance with the Canadian Couche-Tard last January, Carrefour announces this Wednesday March 24 the takeover of its Brazilian competitor Grupo Big for 1.1 billion euros.
A strategic takeover in this high potential South American market.
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By acquiring Grupo Big, Carrefour is strengthening its position as the leader in food distribution in Brazil, more particularly in the north-eastern and southern regions of the country, where the market is still limited and where it therefore has strong growth potential.
Established in Brazil since 1975, Carrefour has become number one in mass distribution, ahead of Grupo Pao de Açucar (GPA), owned by Casino, another French.
With record growth of over 18%, Brazil is the market that has brought the strongest growth to Carrefour, a pioneer of the hypermarket concept since 1963.
Carrefour in Brazil already has 489 stores and 45 million customers.
Brazilian Grupo Big, formerly Walmart Brazil, operates a network of 387 stores in this vast Latin American country.
It is the third largest player in the sector.
Between them, Carrefour Brasil and Grupo Big have 876 stores, 137,000 employees and a turnover of around 100 billion reals, or some 15 billion euros.
"Indisputable leader in Brazil"
This acquisition of 1.1 billion euros would be the most important operation of the French distribution giant since the arrival of Alexandre Bompard at its head four years ago.
It "will
represent
20
% of the future turnover of Carrefour and nearly 40% of the profitability of the group", he
explains in the newspaper
Le Monde
.
The purchase of Grupo Big should allow Carrefour to increase its market share in the country from 22% to 30% and show, according to his boss, that Carrefour
"is on the offensive and is now an indisputable leader in Brazil"
.
Good news after having suffered a massive setback last January.
The French government is indeed opposed to the merger of Carrefour with the Canadian Couche-Tard which would have valued it at more than 16 billion euros.
The Brazilian operation must now be validated by the Brazilian competition authority (CADE), and the group's shareholders in Brazil.
It is scheduled for 2022. If successful, Carrefour Brazil will have invested in the country more than 15 billion reals, or 2.3 billion euros since 2019.
A market of 112 million inhabitants
With 212 million inhabitants in 2019, mainly young people, Brazil is one of the most important consumer markets in the world, according to a study by Société Générale, hence the importance of consolidating its place there.
It is also a heavy consumer online market.
In 2019, Brazilians spent around € 14 billion on the internet.
►Also read
: Death of a black man in Brazil: a Carrefour official arrested
The reputation of the French company is, however, tarnished in Brazil, after the death of Joao Alberto Silveira Freitas, a 40-year-old black, beaten to death by the guards of a Carrefour in Porto Alegre.
A tragedy that occurred in November 2020, the eve of a symbolic day in the country, the National Day of Black Consciousness.
Overall, Carrefour has 320,000 employees in 13,000 stores in 130 countries around the world.
He lost the Chinese market in 2019, where he had become
"a marginal player"
.
In 2020, it acquired the Spanish hypermarkets Supersol, the Cash and Carry of Marko in Brazil, the convenience stores Wellcome in Taiwan and Bio C 'Bon in France.
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