Brazil's third-largest supermarket chain, Grupo Mateus, has signed a non-binding agreement with regional cash-and-carry chain Novo Atacarejo to merge the two businesses.
The merger will combine 21 Grupo Mateus stores in Pernambuco, Paraíba, and Alagoas with 29 Novo Atacarejo stores, creating a new company with R$6.8 billion (approximately €1.2 billion) in gross revenue.
The merger may also involve exchanging assets based on the gross revenue of the stores.
Majority Stake
Under the proposed agreement, Grupo Mateus would hold a 51% stake in the new entity, while Novo Atacarejo would hold the remaining 49%.
Grupo Mateus is considering investing up to R$500 million (€88 million) in Novo Atacarejo, according to reports. This investment would be made in three annual instalments, with the final amount potentially adjusted for inflation.
Following due diligence completion, both companies will finalise and sign a definitive agreement, requiring approval from Brazil's antitrust authority (CADE).
Following the merger, the Assis family, controlling shareholders of Novo Atacarejo, are expected to retain a key role in day-to-day operations.
Similar Business Model
Grupo Mateus highlighted that both companies operate under a similar business model and strategic direction, with a strong history in Brazilian food retail.
The merger would boost Grupo Mateus' market position in the Northeast region. At the same time, customers of Mix Mateus, Mateus, and Novo stores could benefit from a wider product selection and a larger store network.
It is worth noting that Grupo Mateus has stores in other states in the northeast and north of Brazil (241 in total), but they are not part of the agreement. The group closed 2023 with an overall turnover of R$30.2 billion (€5.3 billion).
Novo Atacarejo, with its main base in Pernambuco, operates stores in Pernambuco, Paraíba, and Alagoas, and achieved a 2023 turnover of R$4.5 billion (€791 million).
