Carrefour buys Brazilian retailer

Carrefour has been looking abroad for growth opportunities

The world's second largest retailer, Carrefour, has agreed to buy Brazilian discount store group Atacadao.

Under the 825m-euro (£559m; $1.1bn) deal, the French firm will acquire Atacadao's 34 discount hypermarkets and 214,000 square metres of real estate.

The acquisition will make Carrefour Brazil's leading retailer by sales.

Carrefour, which currently operates more than 400 stores in Brazil, said the deal would help it "accelerate its organic growth programme".

The firm currently operates 109 hypermarkets, 34 Biarro supermarkets and 258 Dia hard discount stores in Brazil.

Growth opportunities

In an effort to offset limited growth in its competitive home market, Carrefour has been looking overseas for expansion possibilities.

"This acquisition will enable Carrefour to develop in what is our key growth market," said chief executive Jose Luis Duran.

"Atacadao is one of the biggest and most successful retailers in Brazil today."

Atacadao, which holds about 4% of the Brazilian grocery market, reported net sales of 1.54bn euros last year. Carrefour racked up net sales of 3.4bn euros in the country last year.

The French firm added it planned to swap "about a dozen" of its own-brand underperforming stores to Atacadao's more successful format, as well as opening four or five of the stores each year.

Mr Duran added that the deal was financially attractive as it carried no debt, while synergies were expected to be significant thanks to Atacadao's lower cost base.