Acquisition of Carrefour's operations in Thailand: a major strategic step towards market leadership
15 November 2010
Big C announces it has signed a definitive agreement with Carrefour to acquire its business operations in Thailand for a total consideration of THB 35.5bn, implying a pro forma EV/EBITDA 2010e multiple of 8.6x including run-rate synergies.
A unique opportunity to accelerate Big C's growth and strengthen its market leadership
Carrefour Thailand operates a network of 42 stores, of which 34 hypermarkets as well as 37 shopping centers. The company is expected to generate sales of approximately THB 30bn sales in 2010.
Big C and Carrefour's Thai networks present strong geographical complementarities enabling Big C to double its presence in Greater Bangkok.
With 103 hypermarkets in total and a combined 2010 estimated turnover of over THB 100bn, Big C will significantly expand its market position and will be close to leader on the hypermarket segment.
Deployment of Big C's dual retail-property strategy
Carrefour Thailand operates 37 shopping centers accounting for close to 50% of the EBITDA. After the transaction, the total number of shopping centers will exceed 100 and 584,000 square meters of gross leasable area.
This enlarged portfolio reinforces Big C's dual retail-property strategy allowing the implementation of value-creating opportunities.
A value-enhancing opportunity for Big C shareholders
The acquisition will generate significant synergies equivalent to c.1.2% of combined 2010e sales on a run-rate basis. The synergies are expected to be fully implemented by 2013.
The acquisition will be financed out of Big C's existing cash balance resources as well as through debt financing. It should be accretive on Big C's earnings as of next year.
Transaction to be completed by the beginning of 2011
The transaction will be submitted to the vote of Big C's shareholders during an Extraordinary Shareholders Meeting which has been convened for January 5th 2011.
It is currently expected that the closing of the transaction takes place at the very beginning of next year.
Bangkok ? 15 November 2010
Khun Yves, Khun Rumpa and Khun Praphan, respectively CEO and CFO and EVP Property of Big C will hold a conference call today at 3.30 pm (Bangkok time). The conference call will be held in English and will be available at a later stage on the website: www.bigc.co.th
AboutBIG C: With 69bn sales, Big C is the N 2 player in Thailand. Big C operates 111 stores* (of which 69 hypermarkets and 69 shopping malls).
15 November 2010