Chile’s largest retailer reveals ‘possible’ merger/acquisition to grow in Brazil
RIO DE JANEIRO, BRAZIL – Cencosud, the largest retail company in Chile and the third largest listed retail company in Latin America, could complete a new purchase in Brazil. The Paulmann family-controlled company announced a presentation to investors, highlighting that in the third quarter, the company posted its highest annual sales since 2015 and a double-digit Ebitda margin, the best in a decade.
Regarding its business in Brazil, the company said it is “seizing opportunities” through its wholesale format, also known as cash & carry.
The company pointed out that in the third quarter of the year, 27 of its stores in Brazil (it operates 200 supermarkets in the country) were converted to the cash & carry format, “currently the most successful in Brazil,” the company said.
It then pointed to possible new mergers and acquisitions (M&A) to further increase its market share in Brazil. “Possible mergers and acquisitions in the pipeline to strengthen our presence in the country,” the company said.
The group, controlled by the Paulmann family, plans to list part of its Brazilian subsidiary on the São Paulo Stock Exchange, hoping to raise about $300 million.
Initially, the IPO was planned for between March and July 2021, but this did not happen. Then it was expected for the second half of the year, which also failed to materialize. At the end of October, the company confirmed the postponement of its stock market debut in the South American giant without giving an expected date for the exit. It merely indicated that it would do so if market conditions warranted.
What is clear is where the new resources will go. “The company intends to use the net proceeds from the IPO by its business plan to (i) potential mergers and acquisitions (M&A); (ii) new store openings and transformation of existing stores; and (iii) investments to leverage its e-commerce, CRM and logistics platform,” the company said in its preliminary IPO prospectus.
The company plans to spend $180 million in Brazil by 2023 to renovate all stores and “continue expansion.”
With information from Diario Financiero
Live Market IntelligenceBrazil — Live Market Board
Rio Times · Live Market Intelligence
Brazil — Live Market Board
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