Vincent Trius, president of Wal-Mart Brazil, announced the acquisition of Bompreco, a retail chain in northeastern Brazil with 118 units, which include hypermarkets, supermarkets, and mini markets. Bompreco, formerly owned by Ahold, has more than 20,000 employees who will be joining forces with Wal-Mart Brazil to continue offering superior services to customers in the Northeast.
Mr. Trius also announced that Hipercard, Bompreco's credit card manager and one of Brazil's leading credit card companies, has been purchased from Ahold by Unibanco. He said Hipercard will continue to be accepted in all Bompreco stores.
Total value of the transaction is approximately U.S. $500 million, Mr. Trius said, about $300 million for the Bompreco assets and about $200 million for Hipercard.
"We are very excited to have this opportunity to help more people in Brazil improve their purchasing power," Mr. Trius said. "We are also delighted to welcome Bompreco employees as the newest members of our team. This acquisition demonstrates our long-term commitment to the Brazilian market and specifically to the Northeastern part of the country."
With the acquisition, Wal-Mart Brazil will operate 143 units in the country, including 13 Wal-Mart Supercenters, 10 SAM'S CLUBS, two Wal-Mart Todo Dias, and the 118 Bompreco hypermarkets, supermarkets and mini markets. Mr. Trius said Wal-Mart Brazil would keep its current home office in Sao Paulo, but would retain Bompreco's headquarters in Recife as its regional base of operations.
He also said he considered the Bompreco acquisition a perfect fit for the culture of both companies. "Both share the basic principles of respect for the individual, commitment to local communities, striving for excellence, promoting from within, and offering the best quality products to Brazilian customers," Mr. Trius said.
The acquisition gives Wal-Mart Brazil its first stores in the Northeast market. Mr. Trius said Wal-Mart and Unibanco would work closely together in managing their new businesses to preserve efficiency and convenience for customers.
Dresdner Kleinwort Wasserstein (DKW) acted as lead financial advisor, and Rio Bravo Investimentos acted as co-advisor to Wal-Mart in this transaction.
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