THE SONAE Group has bought the French hypermarket chain Carrefour in Portugal in a 662 million euro deal.
Carrefour reached an agreement to sell its supermarkets on Thursday last week but the deal does not include the smaller budget Minipreço outlets held by Dia, a low cost food outlet.
Announced on Friday, the acquisition involved 12 hypermarkets and another 11 projected hypermarkets which have already been given licence approval. The sale also includes eight petrol service stations integrated within the hypermarkets now controlled by Sonae.
Power struggle
The sale, negotiated directly with the group in France, represents the first major business acquisition by Sonae President Paulo Azevedo, the son of billionaire retail and communications tycoon Belmiro Azevedo.
Sonae has had its eye on Carrefour for some time because it is the leading food distribution company operating in Portugal.
The agreement comes a few years after a struggle between Sonae and Carrefour over control of Modelo Continente, where the French group controlled 22 per cent of Sonae’s capital.
That sale to Belmiro Azevedo’s Sonae Group finally went through in November 2004 for 345 million euros.
Before that, the French group had purchased some Sonae supermarkets in the Brazilian state of São Paulo.
Carrefour’s exit from the Portuguese market, which it entered in 1999, was expected for some weeks, with the main interested parties being Sonae and Auchan, which owns the Jumbo hypermarkets.
The French group, which is the second largest in the world, has never succeeded in reaching a position of market dominance in Portugal, dominated as it is by the two great players Modelo Continente and Jerónimo Martins.
Lion share
The fact that Carrefour was placed in large shopping centres didn’t seem to help the situation following decisions by regional Câmaras to block the opening of new out-of-town hypermarkets for several years.
Carrefour’s failure to seize a lion share in the Portuguese market was also because Portuguese governments, in the past, have put the brakes on mergers, such as between Modelo Continente and Jerónimos Martins in order to prevent the creation of uncompetitive market monopolies.
Now Sonae is set to be at the top of the retail sales ranking in Portugal (3526 million euros) followed by: Jerónimo Martins (1948), Auchan (1194), Lidl (1050), Minipreço (705), Carrefour (505), El Corte Inglés (339), Fnac (290), Staples (173) and Plus (154).
The food distribution sector grew by 14 per cent in 2006, obtaining sales of 11.2 billion euros.
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