Wednesday, November 17, 2010


Big C Supercenter Pcl, Thailand’s second-biggest hypermarket operator, rose to a record in Bangkok trading after agreeing to buy Carrefour SA’s Thai stores for 35.5 billion baht ($1.18 billion).
The shares rose as much as 13 percent to 88 baht and traded at 79.25 baht as of 10:56 a.m. local time, set for a record close. Thailand’s benchmark SET Index slipped 0.2 percent.
Casino Guichard-Perrachon SA, which controls Big C, yesterday agreed to buy the 42 Thai stores owned by its French rival Carrefour, adding to the 111 that already operate under the Big C brand in Southeast Asia’s second-biggest economy.

“More stores will enhance competitive advantages and increase negotiation power with suppliers coupled with economies of scale,” Kim Eng Securities (Thailand) Pcl analyst Suttatip Peerasubwrote in a note today. “This acquisition allows Big C to possess some prime locations and licenses of operation.”
The acquisition of Carrefour’s 34 superstores and eight supermarkets in Thailand will generate so-called synergies equivalent to about 1.2 percent of the combined 2010 estimated sales, Casinosaid yesterday. These include improved purchasing terms, rationalized distribution and higher efficiency in the greater Bangkok area, where Big C’s presence will more than double, the company said.
Carrefour’s Thai business may generate sales of 734 million euros ($1 billion) in 2010, Casino said. Big C’s sales may reach 1.8 billion euros in 2010, Casino’s Chief Financial Officer Antoine Giscard D’Estaing said.
Paying Too Much?
Big C said the acquisition will be financed from existing cash and debt.
“Big C is paying too much for Carrefour,” Bualuang Securities Pcl analyst Chaiyatorn Sricharoen wrote in a note to clients today. “Although management claims that the acquisition price is comparable to precedent transactions in Asia, we don’t believe Big C needs either know-how or branding from Carrefour, so it doesn’t make any sense to pay a comparable price. The company could generate a much higher return with this money.”
The Carrefour stores complement the geographical spread of Big C’s own shopping centers, the company said yesterday. The acquisition will add to Big C’s earnings as of 2011, and the synergies will be fully implemented by 2013, it said.
To contact the reporter on this story: Anuchit Nguyen in Bangkok at
To contact the editor responsible for this story: Tony Jordan at

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