French retailer Carrefour has revealed that it is considering a proposal to merge its Brazilian assets with those of Brazilian retailer Grupo Pao de Acucar, according to Business Week.
The announcement has reportedly upset French rival Casino Guichard-Perrachon, which jointly controls Pao de Acucar with the Diniz family and recently upped its stake in the Brazilian company to 37 per cent.
The move, which would give Carrefour control of Brazil’s largest retailer, was proposed by investment fund Gama, which would become the largest shareholder in Carrefour with an 11.7 per cent stake.
Carrefour revealed that its board would review Gama’s plan, which would create a company with combined 2011 revenue of more than €30bn and save about €700m a year, according to Gama.
However, opposition from Casino is expected to be strong, since growth in Brazil is currently helping to offset Casino's decline in domestic sales.
For Carrefour, Brazil stands as its second largest market, in terms of sales, after France.
