Analysts say that attempts by France’s Carrefour to snatch control of Brazil’s top retailer Grupo Pão de Açúcar (GPA) from French rival Casino face lengthy legal wrangling.
The Brazilians have approached Carrefour about a merger but Casino owns 37 percent of the group and is gearing up for a fight.
Carrefour’s existing Brazilian stores merged with Grupo Pão de Açúcar would create the country’s top retailer with an almost 30 percent market share, which might prove problematic with competition regulators.
“It’s unlikely this deal will happen any time soon because for the deal to happen, GPA shareholders need to approve it. It’s unlikely Casino will want to sell the business. It’s their prized asset. Given they have co-control, they should be able to block it.” Bernstein analyst Christopher Hogbin said.
Carrefour, weakened by three profit warnings since autumn, is betting on fast-growing emerging markets such as Brazil to help offset weak sales at home.