Carrefour Offers to Fully Acquire Brazilian Subsidiary, Atacadao
In an effort to accelerate growth, global grocery giant Carrefour SA has announced a proposal to acquire the remaining shares of its Brazilian subsidiary, Atacadao SA.
Key Details:
* Carrefour currently owns approximately 66% of Atacadao.
* Carrefour has offered 7.70 Brazilian reais per remaining share, representing a 19% premium to the closing price on Monday.
* Atacadao's market capitalization upon Tuesday's closing stood at approximately 15 billion reais ($2.6 billion).
Analyst Perspective:
Joseph Giordano of JP Morgan views the transaction as a strategic move for Carrefour:
* Brazil presents a promising market for the company.
* Carrefour is the market leader in Brazil, which is a significant earnings contributor.
* The acquisition demonstrates Carrefour's confidence in the long-term recovery of the Brazilian economy.
Financing and Shareholder Support:
* Peninsula, the family office of Atacadao's second-largest shareholder, intends to participate in the transaction.
* Peninsula will convert its Atacadao shares into Carrefour stock.
Background:
* The proposal comes over three years after Canada's Alimentation Couche-Tard Inc. abandoned merger talks with Carrefour.
* Bloomberg News had previously reported that Carrefour was exploring options to increase its valuation.
Impact on Carrefour Shares:
* Carrefour's stock price remained relatively stable during early Wednesday trading in Paris.