Carrefour to acquire Walmart’s Brazilian retailer Grupo Big in €1.1bn deal

Carrefour has agreed to purchase Brazil’s third biggest food retailer Grupo Big from Walmart and investment firm Advent International, in a deal that values the company at 7 billion reais (€1.1 billion).

The deal aims to strengthen Carrefour’s presence in Brazil, in particularly expanding its footprint in regions where it has limited penetration such as the northeast and south of the country. By combining the groups, the retailer claims it will be able to offer a broader range of products and services at more competitive prices.

Carrefour says the acquisition would provide a net additional contribution to EBITDA of 1.7 billion reais (€260 million) on an annual basis, three years after the transaction closes.

Present in Brazil since 1995, Grupo Big – formerly Walmart Brazil – operates a multi-format network of 387 stores and generated gross sales of 24.9 billion reais in 2020.

Carrefour has been present in Brazil since 1975 and operates 489 stores under the Carrefour banner, Carrefour Bairro and Market banners, as well as the Atacadão banner.

Combined, the two groups have gross sales of around $100 billion reais, operate 876 stores and have around 137,000 employees.

While expanding in its traditional formats, the transaction will enable Carrefour Brazil to grow its footprint in formats of limited presence, such as supermarkets (Bompreço and Nacional banners) and proximity stores (Todo Dia banner). Following the acquisition, Carrefour Brazil will operate in a new market segment with the Sam’s Club format through a licence agreement with Walmart.

“Our Group is on the offensive: The acquisition of the Big Group is a major transformation movement for Carrefour Brazil,” said Alexandre Bompard, chairman and CEO of Carrefour Group.

“In this continental country with immense development prospects, we have accentuated our leadership in the food distribution market over the past three years, and Big will further strengthen it with very complementary formats and locations.

“The transaction fits perfectly into the Carrefour Brazil ecosystem and into the Group’s acquisition strategy, centred on the consolidation of our key markets,” Bompard added.

Including this transaction, Carrefour Brazil will have invested over $15 billion reais in the region since 2019.

Upon completion of the deal, Carrefour Group will own around 67.7% of Carrefour Brazil (compared to its 71.6% stake today), while Península Participações will own 7.2% and Advent International and Walmart 5.6%.

The transaction – which remains subject to regulatory approval and other customary closing condition – is expected be completed in 2022.