Carrefour Brazil to acquire 30 Makro stores

Date : 18 February 2020

Oliver Butterworth

Retail Analyst

Carrefour Brazil has reached an agreement to acquire 30 cash and carry stores from Makro’s Brazilian subsidiary. The transaction, which must still be approved by the domestic antitrust watchdog CADE is valued at BRL1.95 bn (US$450m).

The move, which Alexandre Bompard (Carrefour Group’s chairman and CEO) has described as being “Carrefour Group’s most significant move in Brazil since the acquisition of Atacadão in 2017”, would enable it to accelerate the expansion of its Atacadão atacarejo (cash and carry) banner.

A great move to bolster Carrefour’s expansion of Atacadão

From a sales perspective, the Atacadão banner is Carrefour’s key growth driver in Brazil and the one it continues to expand most rapidly. The business has opened 20 Atacadão annually in each of the last three years and currently has a total of 187.

The acquisition of 30 cash and carry stores (totalling 165,000 sq. m), consists of 22 fully owned properties and eight rented ones. This sale also includes 14 gas stations. The stores are geographically spread across 17 of Brazil’s states and will enable Carrefour to strengthen its presence in the densely populated state of Rio de Janeiro (where seven stores are) and in the Northeast region (where eight are).

All stores will be converted within 12 months

If the acquisition is approved, Carrefour will convert all 30 stores to Atacadão within 12 months of the closure of the transaction. We expect the deal to get approval and for Carrefour to open slightly more stores in 2020 than the 20 it opened in 2019. Beyond this, we expect Carrefour to maintain strong organic store growth on a similar level to what we have seen in recent years, i.e. opening around 20 stores annually. 

“This transaction represents a growth accelerator for Carrefour in Brazil. With this acquisition, Atacadão will strengthen its footprint and further consolidate its presence in Brazil. Combined with our organic growth pace, with 20 new Atacadão stores opened in 2019, this acquisition corresponds to one year and a half of expansion and is a significant step for Grupo Carrefour Brazil.”

Noël Prioux, CEO of Grupo Carrefour Brazil

What next for Makro?

Up till the announcement was confirmed, it was previously rumoured Carrefour was looking to acquire the entire Makro portfolio in Brazil. Makro will continue to operate 24 stores, which are all located in the state of São Paulo, Brazils’ commercial capital. Makro says this sale is aimed at making its Brazilian business more profitable.