Casino abandons international business, with planned sale of Pao de Açucar to Brazil

Groupe Casino is expected to leave Brazil soon. Three days after selling its stake in the capital of the Assai Atacadista brand, a local wholesale champion, the Saint-Etienne group announced on June 26 that it wanted to get rid of its last asset in the country: Grupo Pao de Açucar (GPA ), of which it holds 40.9% of the shares.

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Founded in 1948 by Valentim Diniz, a Portuguese immigrant, GPA is today the second largest distribution network in Brazil, with 19 brands, more than 700 stores and 37,699 employees.

The decision by Groupe Casino is part of an extensive restructuring plan aimed at overcoming serious financial difficulties. Strangled by €6.4 billion in debt, it plans to sell its brands in Latin America, which accounts for half of its sales (€17.8 billion in 2022) and employs three-quarters of its workforce (about 150,000 people). The Casino group should therefore also separate from the Colombian group Exito, present in Colombia (492 stores), Uruguay (96 stores) and Argentina (33 stores).

Market enthusiasm

In Brazil, the sale of GPA arouses the enthusiasm of the markets: “This is great news”, judge Danielle Lopes, financial analyst and partner of the company Nord Research, which advises small investors. Since June 26, GPA’s share price has risen 14%. “The market understands very well that the group needs a new direction. »

Many feared that the Groupe Casino crisis would damage the Brazilian giant’s reputation. Estimated on the stock market for around 5 billion reais (970 million euros), “GPA has always had a great image”, explains Mauricio Morgado, coordinator of a distribution research center at the Getulio Vargas Foundation. GPA’s flagship brand, Pao de Açucar Supermarkets, is particularly popular with wealthy consumers in big cities. More expensive than most of its competitors, on which its success is based “its modernity and quality service”.

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Who will get this jewel of Brazilian large-scale distribution? Some place Abilio Diniz, son of the GPA founder and former close friend of former President Jair Bolsonaro (2019-2022), at the top of the interested list. In 2012, the entrepreneur was ousted from the board of directors of his company by Jean-Charles Naouri, CEO and majority shareholder of Casino, after attempting a merger between GPA and the Carrefour Brazil group. The Brazilian billionaire then sold his GPA shares to invest in his rival: today Abilio Diniz owns 8.4% of the Carrefour Group and 12% of its Brazilian subsidiary, the main private employer in the country.

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