Carrefour Receives GPA Merger Proposal

French retailer Carrefour has received an offer from a company owned by BTG Pactual to merge its Brazilian assets with Grupo Pao de Acucar (GPA). The move intensifies the battle between Carrefour and French rival Casino for control of the Brazilian retailer. Under the plan, Carrefour Brazil’s shares would be merged into GPA, creating a retail player with pro-forma revenues of over EUR30bn. BTG and Brazilian development bank BNDES would provide a capital injection of EUR2bn along with EUR500m in debt financing. Gama, the BTG investment vehicle, and Carrefour would each own a 50% stake in GPA, while Gama would receive 90 million shares in Carrefour, representing 11.7% of its capital. Gama would enter into a shareholders agreement with Blue Capital SARL, Colony Blue Investor SARL and Groupe Arnault, which together own 14.1% of Carrefour. Groupe Casino, Carrefour’s main competitor in France, increased its stake in GPA to 37.0% from 33.7% for around $360m two weeks ago after filing arbitration against Abilio Diniz, GPA’s chairman, over reports of possible merger negotiations with Carrefour. Diniz and his family own 32.7% of the ordinary and preferred shares of GPA. Acucar has a market cap of around BRL16.2bn ($9.8bn).