Brazil's largest retailer CBD proposing to merge e-commerce assets of its Via Varejo business with a unit of its parent Casino; planned venture would combine Nova Pontocom in Brazil, Casino's online Cdiscount businesses in France, Columbia and Asia

Cindy Allen

May 7, 2014 (Bloomberg LP) – Cia. Brasileira de Distribuicao, Brazil’s largest retailer, proposed to merge the e-commerce assets of its Via Varejo SA business with a unit of its parent, Casino Guichard-Perrachon SA, the owner of French supermarkets.

The planned venture would be formed from the combination of Nova Pontocom in Brazil and Casino’s online Cdiscount businesses in France, Colombia and Asia, the Sao Paulo-based company said in a regulatory filing yesterday. The venture may also consider the possible listing of its shares in the U.S.

Casino gained full control of GPA, which operates the Pao de Acucar brand in Brazil, in September after billionaire Abilio Diniz resigned as chairman. Diniz, whose family created GPA in 1948, had tried unsuccessfully to undo an agreement to cede control of Pao de Acucar to Casino by proposing instead a merger with Carrefour SA’s local assets.

The Brazilian retailer, also known as GPA, said its e- commerce business volumes totaled $2 billion last year, while Cdiscount’s reached $2.1 billion. In the first quarter, GPA posted adjusted net income of 244 million reais ($109 million), the third straight period in which it has missed estimates.

GPA and Via Varejo created special committees to study the proposal and may hire external independent consultants, the companies said. The committees will issue their recommendation to the companies’ boards, who will then reach a decision on the combination. Shareholders will then be asked for their views.

Morgan Stanley and JPMorgan Chase & Co. were hired to manage a potential share sale of the combined units, Reuters reported, citing a source with direct knowledge of the situation.

To contact the reporter on this story: Julia Leite in New York at jleite3@bloomberg.net To contact the editors responsible for this story: Brendan Walsh at bwalsh8@bloomberg.net Ben Livesey, Jessica Brice

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