French supermarket retailer Carrefour has agreed to buy Grupo BIG, Brazil's third-biggest food retailer, in a deal valuing the Latin American firm at €1.1 billion.
The takeover, under which Carrefour would buy the company from Walmart and investment firm Advent International, comes as Carrefour seeks to expand in overseas markets such as Brazil amid tough competition in France, where rivals include Casino and Leclerc.
Carrefour said the transaction values Grupo BIG at an enterprise value of 7 billion Brazilian reals (€1.1 billion).
The retailer added the acquisition would provide a net additional contribution to earnings before interest, tax, depreciation and amortisation of 1.7 billion Brazilian reals, or roughly €260 million, on an annual basis three years after the transaction closes.
'A Major Transformation Movement'
"Our Group is on the offensive: The acquisition of the BIG Group is a major transformation movement for Carrefour Brazil," Carrefour chairman and CEO Alexandre Bompard said in a statement.
"The significant synergies generated by this transaction are a lever for creating additional value and a powerful addition to the profitable growth model that we have established across our group," added Bompard.
Carrefour already has a major presence in Brazil, where its subsidiary Carrefour Brasil is the country's biggest retailer and runs the Atacadão supermarket stores.
Last year, Grupo BIG launched a new, 'next generation' supermarket format as part of the 'Super Nova Geração' project.
The project, which follows the transformation of 100 hypermarkets in Brazil, will see the reformatting of the Nacional (in the South Region) and Super Bompreço (in the Northeast) stores.