Wal-Mart mulling Ahold acquisition

Related tags Brazil Ahold

Wal-Mart could be lining up a bid for Ahold's operations in Brazil,
Argentina and Peru as it seeks to push into markets with greater
growth potential than the US.

Wal-Mart, the world's largest retail group, could be about to cement its reputation as the most international of US-based retailers with the possible acquisition of a number of Latin American units belonging to the troubled Ahold group.

According to a report from Reuters​, Wal-Mart is lining up a bid for Ahold's operations in Brazil, Argentina and Peru, a move which would give it a major foothold south of the US border for the first time. At present, the company has a handful of outlets in Argentina and Brazil.

The report cites sources in Brazil who suggest that Wal-Mart could face rival bids for the Brazilian units, Bompreco and Barbosa, from France's Carrefour and local market leader Companhia Brasileira de Distribuicao (CBD). But only the US company is thought to be offering to buy all the businesses at the same time, the sources said.

Ahold is selling is Latin American businesses as part of a major strategic overhaul, announced before the discovery of a major accounting fraud at the company but made all the more necessary as a result.

The Dutch group has debts in excess of €12 billion and is selling a number of its international operations to help pay them off. Several of the world's leading supermarket groups, including Wal-Mart, Carrefour and Tesco, are thought likely to profit from the disposals, although no potential buyers have as yet been confirmed.

Latin America was the obvious choice for Ahold to begin its disposal programme, with the economic problems faced by many countries there making it a tough part of the world in which to do business. But it is also a popular region for many of the international retail groups, and finding a buyer should not be difficult.

Ahold​ currently operates over 150 stores in Brazil, 236 Disco supermarkets in Argentina and 118 Santa Isabel stores in Peru (32 stores), Chile (76 stores) and Paraguay (10 stores). The company announced in April that it planned to sell its operations in Brazil, Argentina, Peru and Paraguay, either separately or as a whole.

Wal-Mart​ is one of just a handful of US retailers with significant operations outside the US, but with growth in the domestic market sluggish at best, it is expected to invest substantially in foreign businesses over the next few years.

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