French Retailer Casino Reviewing Options For Latin American Assets
French supermarket retailer Casino, which has been selling assets to cut debts and reassure investors, said on it was reviewing its strategic options in Latin America.
Casino, which controls Brazilian retailer Grupo Pao de Acucar (GPA), issued a statement after Brazilian paper 0 Globo said the French firm could announce "in the next few days" a plan to combine its assets in Latin America.
Citing press reports about plans in Latin America, Casino said "it studies its various strategic options in this region in the context of the permanent review of its investments."
"These thoughts have not led to any material element that would justify a disclosure to the market," it added.
Casino also owns Assai and Via Varejo in Brazil, and Grupo Exito in Colombia, Argentina, Uruguay and Chile.
A Key Contributor
Latin America, and particularly Brazil, is a key contributor to Casino group's sales and profits, and the region has helped offset a weaker performance in France, where Casino has faced price wars among supermarket companies.
Casino had retail sales of €15.6 billion ($17.4 billion) in Latin America in 2018, representing 42.5% of overall group sales. The region's operating profit was €644 million, representing 53% of group profit.
The robust performance of Brazil, Casino's second-largest market after France, has been largely driven by the Assai Cash and Carry stores, as Brazil emerges from a recession.
Brazil's GPA holds a 36.27% stake in consumer electronics retailer Via Varejo, a business it has been trying to sell since November 2016.
In a securities filing last week, Via Varejo said its board was proposing to its shareholders the removal of a clause in its by-laws, demanding a tender offer to all shareholders if an investor buys a stake larger than 20%.
Via Varejo said the change in the clause, usually viewed as a defence from takeovers, was "positive" for the company.
On Wednesday, GPA reported a double-digit drop in its first-quarter net consolidated income, missing market forecasts and driving GPA shares down 7.4 percent in Brazil.
The company reported net debts of €3.4 billion at the end of 2018.