Sullivan & Cromwell LLP in New York and Brazilian law firms Machado Meyer Advogados and BMA - Barbosa, Müssnich, Aragão have helped the local branch of French supermarket chain Carrefour acquire Grupo BIG from US counterpart Walmart and private equity investor Advent in a deal worth 7.5 billion reais (US$1.4 billion).

Machado Meyer advised on corporate and M&A matters, while BMA helped on antitrust aspects before CADE.Carrefour bought Grupo BIG from investment fund Momentum, which is controlled by entities of US retailer Walmart and private equity business Advent. Momentum enlisted Brazil's Mattos Filho, Veiga Filho, Marrey Jr e Quiroga Advogados.French law firm Bredin Prat is also thought to have helped Carrefour, but Latin Lawyer could not confirm this prior to publishing.The deal was signed on 23 March.

The transaction will be split into two tranches. Carrefour has agreed to pay 5.2 billion reais (US$942 million) in cash for a 70% interest in Grupo Big and will obtain the remaining stake through a stock merger. Each remaining Grupo BIG share will be swapped for a common share in Carrefour Brazil, requiring the buyer to issue nearly 117 million new shares.

The stock merger will take place six months after the transaction's completion.If certain specific situations occur to Carrefour Brazil prior to the stock merger takes place - the details of which were not disclosed - the seller has the option to obtain the transaction's full value in cash, equalling 7.5 billion reais (US$1.4 billion) in total.Upon the deal's completion, Carrefour will own 67.7% of Carrefour Brazil, while Advent and Walmart will jointly hold 5.6%. The closing is expected next year. Grupo BIG is Brazil's third largest food retailer and has a network of 387 stores. Together with Carrefour Brazil's existing assets, the joint company will have 876 stores and 137,000 employees across the country, along with gross sales of 100 billion reais (US$18 billion).

The move consolidates Carrefour Brazil's position as the leading food retailer in Brazil. The South American country is Carrefour's single most important market outside of its home country. After the merger, Carrefour's position in Brazil will be nearly as big as its European operations outside France. The deal comes just two months after Canadian retailer Couche-Tard attempted a 16.2 billion-euro (US$19.3 billion) takeover of Carrefour, which was stopped by the French government.

Carrefour first entered Brazil in 2007 when it acquired Brazilian wholesaler Atacadão for US$1.1 billion.

Counsel to Carrefour

  • BrazilSullivan & Cromwell LLP: Partners Sergio Galvis, Werner Federico Ahlers and Mehdi Ansari, and associates Fabio Weinberg Crocco, Christina Cheung and RuiHui Yu in New York
  • BMA - Barbosa, Müssnich, Aragão: Partner Barbara Rosenberg and associates Guilherme Morgulis and Marcela Abras Lorenzetti on São Paulo

Counsel to Momentum, Advent and Walmart

  • Mattos Filho, Veiga Filho, Marrey Jr e Quiroga Advogados: Partners Rodrigo Figueiredo Nascimento, Luciana Pietro Lorenzo, Andrea Bazzo Lauletta, Paulo Camargo Tedesco, Mariana Spoto Cobra, Marcio Soares and Cleber Venditti da Silva, and associates José Francisco Rodrigues Gontijo, Rodrigo Cervone Miranda, Maria Fernanda Fidalgo Fernandes da Cunha, Vítor de San Juan Faria, Thomaz Miguel Costa Carpes Borges and Ana Carolina Folgosi Bittar in São Paulo

Jornalista: KARLSSON, Fredrik

(Latin Lawyer - 29.03.2021)