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  • Carrefour and Casino: Rumor About Brazilian Supermarkets Merge Under Grupo Pão de Açucar
    According to published this Monday at newspaper Valor Econômico, about a statement on last Sunday's French newspaper Journal du Dimanche, Carrefour (NASDAQ:CA) would be willing to negotiate the merger of its Brazilian subsidiary to Grupo Pão de Açúcar (NYSE:CBD) after quarters of poor performance and loss of Brazilian market share in the segment. Thus, according to the report, the gross revenue of the resulting company would be approximately 30% of the total sales in the supermarkets sector in Brazil. The companies have not confirmed this information.
    It's worth noting that Grupo Pão de Açúcar is controlled by Wilkes Participações S.A., which is owned by the also French Casino Guichard-Perrachon (OTC:CGUIF) and the family Diniz, founder of Pão de Açúcar. Take

    Potentially positive for CBD, if confirmed, since it would raise their exposure to the food segment, one of the biggest drivers for the company, and it would provide gains of a possible synergy with better negotiation with suppliers, via increased scale and improved logistics. Another highlight is the use of physical spaces of Carrefour, which also have their stores concentrated in south and southeast, increasing the company's participation in these markets. Note that the retail food business continue to be quite informal and fragmented in Brazil, and if these rumors are confirmed, the news should be viewed favorably by investors, depending, of course, on deal conditions.
    May 24 10:00 AM | Link | Comment!
  • Short Opportunity? BR Foods Shares Tumble 7.13% After Antitrust Restrictions
    Contrary to the upward trend of the Bovespa Index (+0.39%), shares of BR Foods (BRFS3, NYSE:BRFS) tumbled 7.13%, ending trading at R$ 29.58 in Brazil - its lowest level reached in the intraday - reflecting the news that antitrust federal agency Cade (Administrative Council for Economic Defense) has issued an statement in which it sets a signal against the merger between Sadia and Perdigao, BR Foods main brands.

    Competition and benefit to consumers

    BR Foods reported this morning that it received the statement from Cade, which conditions the merge to the entry of a third competitor with market relevance and/ or the transfer of the benefits to consumers.

    "Given the absence of relevant barriers to entry, the existence of intense rivalry and generation of substantial synergies and efficiencies that will be passed on to the final consumer, BR Foods remains confident in the transaction approval by CADE" wrote BR Foods in a statement. take

    Even with the drop after the news, the stock is expensive. I am staying out of the stock but if I were to bet in any direction it would be on the short side. The stock has been in a strong uptrend for the last 5 months and is still close to its all-time high and this news will impact the company considerably if confirmed.
    Of course, if they can really revert the decision, this may become a long opportunity. I like the stock: it's worth keeping an eye on it and buy depending on how much it falls from here. I probably wouldn't buy until I see another 20% drop from today's level though.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
    May 10 11:15 PM | Link | Comment!
  • IBGE: Brazilian Unemployment Rate at 6.5% in March, 2011
    Tags: EWZ, EWZS
    Apr 20 11:15 AM | Link | Comment!
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