Dutch group SHV plans to divest its Makro cash & carry stores in Brazil and has contracted Santander Bank to manage the sale, according to reports.
Brazilian financial daily Valor Economico claims that SHV is seeking R$2 billion to R$3 billion (€394-591 million), a price that is equal to the entire gross annual turnover of Makro, adding that the 24 stores will be sold in the coming months.
Sources contacted by the O Estado de São Paulo newspaper believe that SHV cannot realistically expect to generated more than R$ 2 billion from the sale.
The four main Brazilian wholesale chains are seen as potential buyers – Atacadão (owned by France’s Carrefour), Assaí (part of France’s Casino), Fort Atacadista (owned by Grupo Pereira) and Grupo Muffato.
Lack Of Formal Interest
However, market sources told Valor Economico that the asking price has been judged as too high and, as a result, no formal interest has been expressed.
According to reports, Atacadão does not intend to get involved in another M&A operation while the takeover of Big Brasil (former Walmart Brasil) is under analysis by the Administrative Council for Economic Defense (Cade).
For its part, Assaí is in the process of reformulating the 70 shops recently bought from Extra for R$4 billion (€788 million).
Makro has been present in Brazil for 50 years, but started resizing its activities in the country two years ago, when it sold 30 stores to Carrefour Brasil for R$1.95 billion (€384 million), enabling the French group to boost the presence of the Atacadão brand.
By concentring its activities only in the state of São Paulo, Makro became uncompetitive compared to wholesale market leaders Atacadão and Assaí, forcing SHV to throw in the towel.
The ‘atacarejo’ wholesale concept is one of the fastest growing segments in Brazil, with more than 2,000 stores and revenues of R$ 230 billion (€45 billion), according to data from the Brazilian Association of Self-Service Wholesalers (Abaas) and NielsenIQ.
Last year alone, the number of wholesale shops in Brazil jumped by 26%.