French retailer Carrefour is in the final phase of negotiations for the acquisition of assets of cash and carry wholesaler Makro in Brazil, reports suggest.
Two sources close to the negotiations told Brazilian newspaper O Estado de São Paulo that the talks, which were underway for about six months, have warmed up again in recent weeks.
The report also stated the deal is valued at around R$ 5 billion (€1.06 billion) and expected to close by the end of this week.
Carrefour Brasil and Makro are yet to comment on the media reports.
Wholesale Boost
With the addition of Makro’s assets, Carrefour will boost its wholesale (cash and carry) unit, Atacadão, which accounts for most of its turnover in Brazil.
Operated by Dutch group SHV Holdings, Makro operates 74 stores in Brazil and has an annual turnover of around R$ 7 billion (€1.5 billion.
It also present in Argentina, Venezuela, Peru and Colombia in South America.
The Brazilian business continued to be a part of SHV Holdings even after the company sold its stores in Europe to the German wholesaler Metro more than 20 years ago.
Store Upgrade
In November of last year, Makro remodelled some of its stores, including its concept store in Butantã (São Paulo) to attract interested parties.
The retailer also introduced a new store layout, expanded its product offering, and added more spacious and illuminated shelves.
Makro has also closed several loss-making outlets, including three stores in the state of Minas Gerais, two in Espirito Santo, and one in Bahia.
Performance In Brazil
According to preliminary results released by Carrefour, net sales increased by 11.4% year-on-year in Brazil in the fourth quarter of 2019, amounting to R$ 16.8 billion (€3.5 billion) and surpassing its main rival, Casino-owned GPA.
For the full year 2019, the retailer reported a total turnover was R$ 62.2 billion (€13.1 billion).
In a recent interview for the French daily, Les Échos, Carrefour CEO, Alexandre Bompard, mentioned Brazil as one of the priorities for the retailer and added that it has seen sustainable growth in all five markets in Latin America in which it is present.
© 2020 European Supermarket Magazine – your source for the latest retail news. Article by Branislav Pekic. Click subscribe to sign up to ESM: The European Supermarket Magazine.
