Reports of a possible merger between the Brazilian business of Carrefour and local market leader Companhia Brasileira de Distribuicao (CBD) do not make strategic sense and would likely face opposition from competition authorities, one analyst has indicated.
According to a report in French newspaper Le Journal du Dimanche yesterday (22 May), Carrefour has commissioned investment bank Lazard to study a transaction that would see the Diniz family, who own a majority stake in CBD, take a stake in Carrefour.
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French retailer Casino holds around 35% of CBD, and any such deal would require approval from Carrefour’s rival.
A spokesperson for Carrefour declined to comment on the report. Officials at Casino could not be reached for immediate comment.
However, RBS analyst Justin Scarborough told just-food that any such link-up seemed “unlikely”.
“They are both two big operators in their current markets… the competition authorities in Brazil are quite stringent and strict and a Carrefour-CBD link-up would raise a number of competition questions, certainly in many urban areas,” Scarborough said.
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By GlobalData“In terms of Carrefour’s growth, Brazil offers their biggest growth in emerging markets… why would they want to exit what is perceived as – internally and externally – a market that is one of their biggest growth drivers in the future?”
