Carrefour closer to Brazil listing with Diniz deal
By Dominique Vidalon and Brad Haynes
PARIS/SAO PAULO (Reuters) - Carrefour (CARR.PA: Quote) has sold a 10 percent stake in its Brazilian business to billionaire Abilio Diniz, a step towards a possible separate listing as the world's No.2 retailer looks to raise cash to accelerate growth in its second-largest market.
With its core French business on the mend, Carrefour boss Georges Plassat has said he wants to speed up expansion in fast-growing Brazil and China, and that a flotation in Brazil was one of its funding options.
However Plassat, who held a conference call together with Diniz, cautioned on Thursday that current market conditions were not favorable to an initial public offering (IPO).
"We have not yet decided on the IPO. We have time. We will decide in peace if this is pertinent for the company," he said.
If Carrefour goes ahead with a Brazilian listing, it would join other Western retailers looking to sell or list parts of their more profitable emerging market businesses.
Germany's Metro (MEOG.DE: Quote), for example, was hoping to list its Russian cash-and-carry business, but had to shelve plans due to the Ukraine crisis, while Britain's Tesco (TSCO.L: Quote) spun off its Chinese operations this year into a joint venture.
Diniz's investment company Peninsula bought the 10 percent stake for about 1.8 billion reais ($663 million), confirming what a source with knowledge of the situation told Reuters on Wednesday.
Peninsula, which will have two seats on the Carrefour Brazil board, also has the option to raise its stake to a maximum 16 percent within five years. Continued...