Abilio Diniz, the Brazilian tycoon and chairman of CBD, the country’s largest retailer, has put plans to merge the business with Carrefour’s local operations on hold.
The merger proposal has proved controversial since it was put forward last month. French retailer Casino, Diniz’s co-shareholder in CBD, has repeatedly criticised the plan, labelling it illegal, hostile and flawed.
Casino claims a 2005 deal with Diniz means it was due to become the sole controlling shareholder in CBD, which is also known by its trading name of Grupo Pao de Acucar, next year.
The French firm has also said talks between Diniz and Carrefour before the merger plan was announced broke an agreement between the two CBD shareholders and it has lodged two requests for arbitration with the Brazilian businessman.
Yesterday (12 July), in a meeting in Paris, the Casino board again outlined the retailer’s opposition to the transaction.
In the wake of the meeting, which Diniz attended in his role as a director of Casino, Península, the Diniz family’s holding company, issued a statement that said it still supported the transaction but that the plan could no longer proceed.
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“Península reiterates its support for the proposed association between the operations of Pão de Açúcar and Carrefour. However, in view of the decision taken on this date by the Board of Directors of Casino to reject the proposal … Península has recognised that it is presently not feasible to pursue that proposal,” the statement read.
“Península strongly believes that Casino has not appropriately analysed all aspects of the proposal in order to make an informed decision. It continues to believe that a transaction along the lines of that proposal would be in the best interest of CBD, Carrefour and their shareholders. Casino’s unilateral decision is, therefore, deeply regrettable.”
The statement was issued after the Brazilian National Development Bank (BNDES), which had said it would part-fund the merger, said it would no longer support the deal in the wake of the opposition from the Casino board.