Casino Group accuses Brazilian partner seek merger with rival Carrefour

Best Growth Stock – The French distribution group Casino denounced Tuesday his partner in the Brazilian retail chain Pão de Açúcar, the Diniz family, to the International Chamber of Commerce for its alleged secret negotiations to merge with rival Carrefour.

Casino requested the opening of a procedure of arbitration at the Chamber of Commerce for forcing the Diniz family to “comply with signed agreements” between both, according to the Pão Açucar group in a statement sent to the market.

Relying on the “Confidentiality” of the terms of the agreement between the shareholders, the supermarket chain not cited specifically the alleged negotiations between Carrefour and Pão de Açúcar, Abilio Diniz, CEO have been well-aired by the French and Brazilian press in recent weeks.

The denunciation of Casino had immediate impact on the price of the preferred shares of Pão de Açúcar in the Sao Paulo Stock Exchange, which average session recorded a sharp decline of 4.33 percent.

The week last Pão de Açúcar denied in a statement having had “any negotiations” with a rival to Carrefour for a possible merger, which would create a trade giant retailer in Brazil.

The note emphasized that Casino “unknown” the existence of negotiations, although you were admitted that Abilio Diniz “is always in search of alternatives for the company’s growth”.

“There aren’t any fact or event which justify the disclosure to the market”, added the statement issued on 25 May.

Pão de Açúcar is leader of the Brazilian market, with a 17.9% of the total number of bandages retailers and a turnover of 36,100 million reals (US$ 22,500 million) in 2010.

The company owns 1.647 establishments, including the network of Extra hypermarkets, as well as Pão de Açúcar supermarkets and chains of shops of home appliances and furniture Ponto Frio and Casas Bahia.

Carrefour is the owner of about 500 supermarkets and hypermarkets throughout the Brazilian territory, including the popular networks Atacadão and Day.