French retailer Carrefour will be selling its Colombia unit to Chile’s retail giant Cencosud. Carrefour SA will be selling the business for $2.6 billion, and the deal is expected to close at the end of this year.
Cencosud is South America’s third largest retailer. Carrefour, which is the fourth largest retailer in the world, has been struggling and seen heavy losses. The company is pursuing a major restructuring drive; and has also quit its operations in Singapore and Greece.
According to reports, Carrefour will focus on its France and Spain operations and also on the growth regions like Brazil and China. Turkey and Indonesia operations, however, are under review.
Cencosud’s deal is the biggest overseas purchase by a Chilean brand. The Chilean giant will get 72 hypermarkets, 16 convenience stores and 4 cash and carry stores in Colombia. Cencosud already has 900 stores and 26 commercial centers in that region.
The deal shows the growing might of the Latin American companies, who have an advantage over their recession-hit European counterparts.
Colombia, like other South American countries, is seeing an economic boom and has as an affluent and aspiring middle class. While the rest of the world is facing a recession, South America has shown good progress, and as a result, many global brands have expressed their interest in expanding in the continent; or have already started.