According to Wall Street Journal this morning, Wal-Mart has mandated UBS to buy Carrefour's assets in Brazil. If Carrefour decides to exit their single largest operation in emerging markets, the rest should follow including China, Indonesia, Turkey.
Lars Olofsson, presurred by Colony Capital, announced the company's exit from Brazil back in 2009 but then could not reach a deal with Wal-Mart. Earlier this year only after less than two years, Carrefour made a bid at Brazil's largest retailer Cia. Brasileira de Distribuição, which was stopped by the government. Carrefour exited Russia several years ago and then announced its plans to evaluate their stratgeic options to get back to the country.
My friend Lars has a very tough job trying to juggle his impatient demanding shareholders who lost a fortune on paper. His fate is largely dependent upon how well France will do and its consequent impact on the stock price.
Wal-Mart Again Eyes Carrefour's Brazil Unit - WSJ:
Wal-Mart Stores Inc. is exploring a potential acquisition of the Brazilian unit of French retailer Carrefour SA, two years after a previous attempt to strike a deal ended over a disagreement on price, people familiar with the matter said.
Wal-Mart isn't in current discussions with Carrefour and hasn't contacted the French company about its interest, which was described by one of the people as "serious."
Investment bank UBS AG is advising Wal-Mart on the possibility of making an offer for Carrefour's Brazilian stores, which could be valued at between $6 billion and $8 billion, they added.
For Carrefour, the world's second-largest retailer by sales, after Wal-Mart, Brazil is a cornerstone of its global ambitions. But the company has been struggling to turn around its performance in recent years and its shares have dropped sharply this year. Analysts have said spinning off or selling some of its international operations could help revive the stock.
Blue Capital, an activist investor group comprising French luxury tycoon Bernard Arnault and California-based private-equity firm Colony Capital LLC, owns a 14% stake in Carrefour. Since acquiring their stake in 2007, Mr. Arnault and Colony Capital have pushed Carrefour's management to sell off assets and increase profitability.
A Wal-Mart spokesman said the company "does not comment on rumors or speculation." A spokeswoman for UBS declined to comment.
A Carrefour spokeswoman said the company is committed to staying in Brazil. "It's an important strategic market for us, and we plan to remain there and grow," she said.
Buying Carrefour's Brazilian unit would give Wal-Mart access to a network of more than 500 stores, including "hypermarkets"—huge supercenters selling everything from baguettes to bicycles—supermarkets and convenience stores, buttressing its position in one of the fastest-growing emerging markets.
Wal-Mart's interest comes as Carrefour's plans to merge its Brazilian operation with a Brazilian retailer collapsed. Carrefour's board had approved a deal to merge its Brazilian business with Brazil's largest retailer Cia. Brasileira de Distribuição, which owns the Pão de Açúcar supermarket chain. But the deal fell apart last month after the government-owned bank that was financing the project withdrew its support.
That deal was also opposed by French retailer Groupe Casino,an archrival of Carrefour, which jointly controls CBD along with Abilio Diniz, CBD's chairman and 74-year-old billionaire.
The U.S. retail giant has long been interested in Brazil, where it opened its first stores in 1995.
As of June, Wal-Mart ran 484 stores in Brazil under different formats and names, according to its website.
It has grown in Brazil through a mix of acquisitions and organic growth. Wal-Mart acquired the Bompreço chain in northernBrazil in 2004 from Dutch retailer Koninklijke Ahold NV, and the Brazilian operations of Portuguese retailer Sonae SGPS SA in 2005.
Wal-Mart has been bullish on international opportunities, and global sales have boosted its earnings in recent quarters. Wal-Mart had $419 billion in sales last year, of which $109 billion was international.
In its second-largest deal ever, Wal-Mart last year agreed to acquire a 51% stake in Johannesburg-based Massmart Holdings Ltd. for $2.4 billion. Earlier this year, South African antitrust regulators approved the deal, but the government appealed that decision and appears to be trying to get Wal-Mart to agree to additional conditions.
Wal-Mart has said it plans to respond to the appeal.
When Lars Olofsson took over as chief executive of Carrefour in early 2009, he considered selling off the retailer's international operations, including in Brazil. Wal-Mart had expressed interest in the Brazil business, and the two rivals held informal talks, but failed to reach a deal after disagreeing on price, people familiar with the matter said.
In the end, Carrefour concluded that it wanted to remain in Brazil, which is its second-largest market after France.
Lars Olofsson, presurred by Colony Capital, announced the company's exit from Brazil back in 2009 but then could not reach a deal with Wal-Mart. Earlier this year only after less than two years, Carrefour made a bid at Brazil's largest retailer Cia. Brasileira de Distribuição, which was stopped by the government. Carrefour exited Russia several years ago and then announced its plans to evaluate their stratgeic options to get back to the country.
My friend Lars has a very tough job trying to juggle his impatient demanding shareholders who lost a fortune on paper. His fate is largely dependent upon how well France will do and its consequent impact on the stock price.
Wal-Mart Again Eyes Carrefour's Brazil Unit - WSJ:
Wal-Mart Stores Inc. is exploring a potential acquisition of the Brazilian unit of French retailer Carrefour SA, two years after a previous attempt to strike a deal ended over a disagreement on price, people familiar with the matter said.
Wal-Mart isn't in current discussions with Carrefour and hasn't contacted the French company about its interest, which was described by one of the people as "serious."
Investment bank UBS AG is advising Wal-Mart on the possibility of making an offer for Carrefour's Brazilian stores, which could be valued at between $6 billion and $8 billion, they added.
For Carrefour, the world's second-largest retailer by sales, after Wal-Mart, Brazil is a cornerstone of its global ambitions. But the company has been struggling to turn around its performance in recent years and its shares have dropped sharply this year. Analysts have said spinning off or selling some of its international operations could help revive the stock.
Blue Capital, an activist investor group comprising French luxury tycoon Bernard Arnault and California-based private-equity firm Colony Capital LLC, owns a 14% stake in Carrefour. Since acquiring their stake in 2007, Mr. Arnault and Colony Capital have pushed Carrefour's management to sell off assets and increase profitability.
A Wal-Mart spokesman said the company "does not comment on rumors or speculation." A spokeswoman for UBS declined to comment.
A Carrefour spokeswoman said the company is committed to staying in Brazil. "It's an important strategic market for us, and we plan to remain there and grow," she said.
Buying Carrefour's Brazilian unit would give Wal-Mart access to a network of more than 500 stores, including "hypermarkets"—huge supercenters selling everything from baguettes to bicycles—supermarkets and convenience stores, buttressing its position in one of the fastest-growing emerging markets.
Wal-Mart's interest comes as Carrefour's plans to merge its Brazilian operation with a Brazilian retailer collapsed. Carrefour's board had approved a deal to merge its Brazilian business with Brazil's largest retailer Cia. Brasileira de Distribuição, which owns the Pão de Açúcar supermarket chain. But the deal fell apart last month after the government-owned bank that was financing the project withdrew its support.
That deal was also opposed by French retailer Groupe Casino,an archrival of Carrefour, which jointly controls CBD along with Abilio Diniz, CBD's chairman and 74-year-old billionaire.
The U.S. retail giant has long been interested in Brazil, where it opened its first stores in 1995.
As of June, Wal-Mart ran 484 stores in Brazil under different formats and names, according to its website.
It has grown in Brazil through a mix of acquisitions and organic growth. Wal-Mart acquired the Bompreço chain in northernBrazil in 2004 from Dutch retailer Koninklijke Ahold NV, and the Brazilian operations of Portuguese retailer Sonae SGPS SA in 2005.
Wal-Mart has been bullish on international opportunities, and global sales have boosted its earnings in recent quarters. Wal-Mart had $419 billion in sales last year, of which $109 billion was international.
In its second-largest deal ever, Wal-Mart last year agreed to acquire a 51% stake in Johannesburg-based Massmart Holdings Ltd. for $2.4 billion. Earlier this year, South African antitrust regulators approved the deal, but the government appealed that decision and appears to be trying to get Wal-Mart to agree to additional conditions.
Wal-Mart has said it plans to respond to the appeal.
When Lars Olofsson took over as chief executive of Carrefour in early 2009, he considered selling off the retailer's international operations, including in Brazil. Wal-Mart had expressed interest in the Brazil business, and the two rivals held informal talks, but failed to reach a deal after disagreeing on price, people familiar with the matter said.
In the end, Carrefour concluded that it wanted to remain in Brazil, which is its second-largest market after France.
No comments:
Post a Comment