French retailer Casino has agreed to buy a 25% stake in the leading Colombian supermarket chain, Almacenes Exito. Exito said the deal would enrich its coffers by some US$175m and will also include a new share offering as well as the purchase of 6.5 million shares on the secondary market.
In February, Exito acquired one of its largest rivals, Cadenalco, for US$43m, although the two companies continue to operate independently. Together they account for approximately half of retail sales in Colombia, which in total are worth US$2.5bn. However, the arrival of French giant Carrefour and German retailer Makro in Colombia, as well as the sustained strength of local player Carulla, have unleashed a wave of concentration.
The Colombian economy is currently experiencing a serious recession, and high unemployment in the country's cities has slashed spending. This in turn has prompted the country's retailers to compete increasingly on price.
Exito operates 14 stores in Colombia's three main towns and is controlled by the Medellin-based Rico Angel group. With 32 stores, Cadenalco boasted market leadership until Exito acquired its controlling stake in February.
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