Carrefour loses interest in Brazilian bid

Related tags Wal-mart Carrefour

Carrefour is reported to have pulled out of the race to buy Ahold's
supermarket assets in Brazil, leaving Wal-Mart of the US and local
market leader CBD as the sole bidders. Carrefour will focus on
organic growth in the Brazilian market.

Carrefour has pulled out of the bidding race for the Brazilian assets of the troubled Ahold group, preferring instead to pursue its own new store developments there.

Reports in the local Brazilian press claim that the French supermarket giant is no longer in the running for the Bompreco and G Barbosa units, leaving just local player CBD (in which French rival Casino has a stake) and US-based Wal-Mart to fight it out for the business.

Carrefour has been active in Brazil since 1975, and has 79 hypermarkets, 108 supermarkets and 69 hard discount stores there. Since 1999 it has been particularly active in the supermarket sector, acquiring a number of regional players.

But the company has persistently developed its own network of stores in Brazil, and is expected to open seven there this year. Further developments in 2004 will focus on the further roll out of its supermarket fascia, Champion, with 12-15 stores likely to open, according to local press reports.

Meanwhile, CBD and Wal-Mart will slug it out for the 110 Bompreco stores and the 32 G Barbosa outlets, and all the indications are that a deal will be reached some time next month.

CBD is the market leader in Brazil, with sales of around R$11.2 billion and 500 stores in 2002. Casino has had a minority stake in the firm since 1999. CBD, like Carrefour, operates under a number of fascias: Pão de Açúcar and Barateiro (supermarkets), Extra (hypermarkets) and Extra Eletro (electronics and home appliances stores).

Wal-Mart, on the other hand, has only a handful of stores in Brazil, and would clearly benefit from a successful bid for the Ahold units. Despite being the world's biggest retail group, Wal-Mart has a relatively limited geographic spread - besides its extensive domestic operations, its only major businesses are in the UK and Japan, though it has a few stores in other Latin American countries - and most observers believe that the company will become increasingly active in international markets over the next few years.

Ahold announced earlier this year that it was putting all its South American businesses up for sale in order to focus on core businesses in Europe. It has already sold its operations in Chile and Paraguay.

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