State-owned development bank BNDES has announced that it will not put up the US$2.4bn pledged for the merger of Brazil's biggest retailers, Grupo Pao de Acucar and Carrefour, unless France’s Casino is on board.
Casino is the controlling shareholder of Pao de Acucar, although Brazilian businessman Abilio Diniz remains the chairman and a major stakeholder.
The French retailer has stated that it is against the deal, which would make it a minority stakeholder in a company controlled by its main competitor Carrefour, and has started arbitration proceedings against Diniz for allegedly negotiating the deal without informing it.
The Casino Group released a statement that 'Carrefour and the members of its board of directors may be held liable in accepting, despite repeated warnings, a hostile transaction arising out of illegal negotiations'.
Were the transaction to be completed, Carrefour would succeed in reducing its reliance on Europe by greatly boosting its exposure to growth markets, which would account for more than 40 per cent of its consolidated sales in 2013, the group said.
