Carrefour has received an offer to join forces with Brazilian retailer CBD in a move that would create the country's largest retailer.

The proposal, received from investment fund Gama and backed by the Brazilian National Development Bank (BNDB), will merge Carrefour's Brazilian assets with those of CBD, also known through its trading name as Grupo Pao de Acucar, in an equally-owned joint venture.

Gama would become a "reference shareholder" in Carrefour and receive a capital injection from the BNDB of EUR2bn (US$2.9bn) and debt financing of EUR500m.

Under the plan, Gama and CBD would merge and CBD would be combined with Carrefour's Brazilian subsidiary. CBD would then hold all of the shares in Carrefour's local unit. Gama would then give Carrefour 50% of the combined business in return for an 11.7% stake in the world's second-largest retailer.

If the deal is passed, Gama will then have an option to purchase up to 6% of the Carrefour business at a later date. It will also be granted two seats on Carrefour's board of directors.

Gama would enter into a shareholders' agreement and act in concert with Blue Capital, Colony Blue Investor, and Groupe Arnault, which jointly own 14.1% of Carrefour's share capital and 20.2% of voting rights, limiting their joint holding to a maximum of 30% of Carrefour’s shares.

Carrefour's board of directors are expected to hold a meeting in the coming days to review the proposal. It will be submitted for final approval to BNDES's board. Gama has indicated that its proposal has also been submitted to CBD.

The transaction, if completed, would lead to the creation of the largest player in the retail industry in Brazil, the world's third biggest market in terms of food spending, with estimated combined 2011 pro-forma turnover in excess of EUR30bn.

The proposal is the latest twist in the speculation over the future of CBD. Over the last month, CBD has publicly denied that it has held merger talks with Carrefour.

However, last week, it emerged in court in France that raids of Carrefour's HQ by bailiffs and IT experts had found documents that established that there had been talks between the retailer and CBD.

There has also been speculation that one of the two shareholders in CBD, Brazil's Diniz family, has been in preliminary discussions with Carrefour. Those rumours prompted the second investors, French retailer Casino, to file for arbitration against the Diniz family.

Wilkes, a joint venture between Casino and the Dinizes, control CBD. Earlier this month, Casino upped its stake in CBD from 33.7% to 37%, although the French company said the move did not alter the corporate control of the Brazilian retailer.