SAO PAULO (Reuters) – The Administrative Council for Economic Defense (Cade) on Wednesday approved the purchase of Big Group stores by the country’s largest retailer, Carrefour Brasil, with restrictions that had already been agreed by the companies with the defense body. of competition.
The decision was unanimous, with the counselors Lenisa Rodrigues Prado, Luis Henrique Bertolino Braido, Gustavo Augusto Freitas de Lima and Sérgio Costa Ravagnani, following the vote of the rapporteur Luiz Augusto Hoffmann.
The rapporteur stated that no competition concerns were identified in the wholesale distribution markets and fuel retail stations. But in the cash and carry segment, which has Assaí as Carrefour Brasil’s main rival, the business “has the potential to generate market power in nine different locations”.
Under the Atacadão brand, Carrefour Brasil is the largest cash and carry chain in the country, while Big is the third largest, according to Cade.
The drugs approved on Wednesday include the sale of cash and carry stores in nine cities in the south and northeast of the country, including Gravataí (RS), Maceió, Olinda and Recife.
In addition, Carrefour Brasil and Big will have to “preserve the viability, attractiveness and competitiveness of the stores subject to the structural remedy until the divestment is completed”. Companies will also not be able to repurchase stores sold for a period that has not been informed.tk
CADE also determined that companies will have to notify the autarchy about any operation involving supermarkets, hypermarkets, wholesale and shopping clubs, “even if they do not meet the mandatory notification parameters”.
In January, the General Superintendence of Cade had already recommended the approval of the transaction, conditioning the deal to the sale of part of the cash and carry stores.
Carrefour Brasil, the local unit of French retail giant Carrefour, announced last March the acquisition of Grupo Big for around 7.5 billion reais.
The transaction involved 387 stores owned or operated by Big. Carrefour Brasil ended the first quarter with 779 points of sale, of which 252 are Atacadão.
At the beginning of the month, Carrefour Brasil’s chief executive, Stéphane Maquaire, told analysts that he expects a “very strong” positive effect on the profit margins of Big stores after converting them to the group’s formats and that the expected synergies are higher than those initially calculated by the company when the transaction was announced.
The approval of Cade comes at a time of strong expansion of cash and carry in the country, amid the persistent economic crisis that has eroded the purchasing power of the population. This growth motivated Assaí to buy 71 Extra hypermarkets from GPA to convert them to the cash and carry format, in a deal worth 5.2 billion reais announced last October.
(By Alberto Alerigi Jr.)
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