PARIS — In the latest blow to its ongoing battle with rival French supermarket operator Carrefour SA for control of Brazilian retail operations, Groupe Casino’s board on Tuesday raised objections to plans by Gama to merge Grupo Pão de Açucar with Carrefour SA’s Brazilian business.
Casino is the controlling shareholder of GPA. Gama is owned by an investment fund managed by BTG Pactual, one of Brazil’s leading financial groups.
With the exception of Abilio Diniz, GPA’s chairman, the proposed transaction was unanimously rejected at the meeting. Arguments cited in a statement released by Casino included the proposal’s flawed strategic vision for GPA and its high execution risks.
The board of Carrefour SA, the world’s second-largest retailer after Wal-Mart Stores Inc., earlier this month had approved a strategic partnership proposal that would create Brazil’s largest retailer by merging its assets in the South American nation with those of Companhia Brasileira de Distribuição, GPA’s holding group.
The proposed deal raised strong objections from Groupe Casino, which has signed a pact with the Diniz Group, its partner in Brazil’s top retailer, Pão de Açúcar, under which Casino has the right to become sole shareholder of CBD in 2012.
Under the terms of the proposed deal, Gama would become a reference shareholder in Carrefour with an 11.7 percent stake, which could be topped later with an additional 6 percent of its capital.