Cencosud Buys Into Brazil

Cencosud, Chile’s largest retailer by sales, has agreed to buy Brazilian supermarket operator Bretas for BRL1.35bn. Of the price, BRL1bn is due at closing, BRL100m at the end of 2011 and BRL250m at the end of 2014. The buyer says a BRL182m adjustment will be made for financial debt and working capital. According to Reuters, which cites the buyer, it will finance the purchase through bank debt totaling $290m, and the rest funded by cashflow. The target is a privately-held owner of 62 supermarkets, 3 distribution centers and 10 service stations in central and northern Brazil. It is controlled by the Duarte De Assis family, employs about 10,000 people, had sales of BRL2.1bn last year and may generate revenue of BRL2.5bn this year, according to Cencosud. “With this strategic acquisition Cencosud enters the states of Minas Gerais and Goias, consolidating its relevant position in the Brazilian supermarket market,” says the Santiago-based retailer.