French supermarket chain Casino has sold its Latin American operations to its Colombian subsidiary, Grupo Éxito, as part of a program restructuring aimed at addressing the retailer’s poor performance in the region.
Éxito will acquire all of Casino’s operations in Latin America, including a 100% stake in Argentinian hypermarket chain Libertad and a 50% stake in Brazil’s Grupo Pão de Açúcar, in a deal worth €1.7bn. Éxito will also acquire a 50% stake in Casino, holding the ordinary voting shares of its Brazilian subsidiary GPA, representing approximately 18.8% of the total capital.
The move will significantly strengthen Éxito, giving it market-leading positions in Brazil, Colombia and Uruguay as well as combined yearly sales of €26.5bn. With a focus on growth drivers, it will also allow Casino to rebalance its debt structure and was announced by Casino CEO Jean-Charles Naouri.
Casino will retain its existing shares in Éxito, of which it owns 54.8%, and expects that the share agreement between the two groups will amount to cost savings of €145m a year. The deal has been announced after the French retailer recorded a 36% decline in its Brazilian operating profit for the first half of the year, driven partly by faltering non-food profits across the continent.
In a statement announcing the agreement, the French retailer said: “This new organisation will create value for all the subsidiaries thanks to the implementation of synergies and best practices with a run-rate impact of €145m, representing around 0.5% of the combined sales.
“55% of the synergies will directly benefit Brazilian operations while 45% will directly benefit Colombian, Argentinian and Uruguayan operations, and these synergies will be implemented by a dedicated committee composed of key executives of Éxito, GPA and Casino Group.”
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