Colombia’s largest retailer, Almacenes Exito, announced plans this week to make a major move into the Southern Cone with the purchase of three of Uruguay’s largest supermarket chains: Disco, Devoto and Geant.
Exito’s Board of Directors signed off on the deal which has the blessing of France’s Grupo Casino, the majority shareholder of Grupo Exito.
Monica Parada Llanes of Colombia’s La Republica says the deal would be an important step in Exito’s aggressive expansion plan for Latin America. If shareholders approve the issuance of additional stock, Exito would take over 53 grocery stores with 785,000 square feet of retail space and forecast 2011 revenues of US$770 million. Under proposed deal terms, Grupo Exito would control 96.5% of Devoto and 62.5% of Disco.
JP Morgan Securities and Barclays Capital served as investment advisors in the deal valued at approximately US$746 million. To finance Exito’s Latin American expansion, shareholders are being asked to approve an offering of 130 million shares valued at US$795 million. In addition to entering new markets like Uruguay, Grupo Exito plans to renovate existing stores and open new outlets in second-tier cities in Colombia.
Grupo Exito currently operates 299 stores in Colombia under the brands Exito (hypermarkets), Carulla and Pomona (supermarkets), Surtimax, Ley and Home Mart. The company posted 2010 operating revenue of over US$4 billion. (Full Story in Spanish)
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