Brazilian food retailer GPA is considering spinning off its Assai wholesale unit via an initial public offering, it said in a securities filing on Wednesday.
The new company would be listed on the Novo Mercado segment of Brazil’s Sao Paulo stock exchange, which requires elevated corporate governance standards. It would also issue American Depositary Receipts in New York.
Co-Vice Chairman Ronaldo Iabrudi told journalists that GPA plans to list Assai by March 2021, but no share offering is planned. GPA plans to transfer Assai shares to its shareholders, including parent company Casino Guichard Perrachon SA, after the listing.
After the spin-off, GPA intends to focus mainly on e-commerce and on its super and hypermarkets.
“Currently there is little to no synergy between GPA and Assai,” Iabrudi said.
Assai will transfer its stake in Colombia’s Almacenes Exito SA to GPA prior to the spinoff, according to the filing. GPA acquired 96.57% of Exito in November, as part of broader efforts by Casino to simplify its shareholding structure in Latin America.
GPA said it aims to unlock the wholesale unit’s value through the listing, while allowing Assai direct access to sources of funding, such as capital markets.
Iabrudi said he sees consolidation in the wholesale segment in Brazil.
Source: Reuters.com