Brazil’s Pao de Acucar, Bahia agree to merge-paper

* Pao de Acucar, Casas Bahia had suspended integration

* Accord includes capital injection, Estado says

* Announcement of combination to be made early on Friday

SAO PAULO, July 2 (BestGrowthStock) – Brazil’s largest retail group
Grupo Pao de Acucar (PCAR5.SA: ) and rival Casas Bahia will
combine their businesses after agreeing to revamp terms of an
original integration accord, O Estado de S. Paulo reported on
Friday, citing people familiar with the situation.

Under the new accord, the Klein family, Casas Bahia’s
owners, would receive more cash annually for ceding part of
their assets to the combined firm, and be allowed to exit the
company in a shorter period and under better terms than
originally agreed upon, Estado said in the report.

An announcement is expected early on Friday, the newspaper
added.

The Kleins suspended the plan, under which Pao de Acucar
would take over Casas Bahia in a transaction worth more than
4.4 billion reais ($2.4 billion) in March, after alleging their
assets had been undervalued in the deal.

Pao de Acucar would inject between 700 million reais and
800 million reais in fresh capital into a new company, called
Nova Casas Bahia, that would turn into the group’s home
appliances retailing unit, Estado said., The unit would be
presided over by one member of the Klein family who would have
to report to Pao de Acucar’s board, the newspaper added.

The revamped accord would render the Kleins an additional
200 million reais payout outright, the newspaper said.

Calls made by Reuters to spokespeople for the two companies
seeking comment on the Estado report were not returned.
($1=1.80 reais)
(Reporting by Guillermo Parra-Bernal, editing by Gerald E.
McCormick)

Brazil’s Pao de Acucar, Bahia agree to merge-paper