A trio of Am Law 100 firms have grabbed lead roles on a deal under which French retail giant Carrefour has agreed to sell its Colombian assets, which include a string of shopping outlets and supermarkets, to Chile’s largest retailer, Santiago-based Cencosud, for $2.5 billion.
The deal, which was announced October 18 is expected to close by the end of the year, includes 72 so-called hypermarkets—retail locations that are part supermarket, part department store—16 convenience stores, and four of what Carrefour refers to as cash-and-carry stores scattered across Colombia. The assets generated net sales of $1.9 billion in the fiscal year ending June 30, according to the Carrefour press release announcing the deal.
Carrefour said in the release that the sale fits with its efforts to exit geographic markets where it is not a market leader. With locations in Argentina, Brazil, Chile, Colombia, and Peru, Cencosud is one of Latin America’s leading retail operators.
Financial Times noted last week that Carrefour is facing pressure from shareholders to focus on stronger markets, as Europe’s austerity push has resulted in a drop in sales on the company’s home turf. FT also points out that the sale is likely to lead to speculation about what Carrefour plans to do with its operations in Brazil—the second-largest source of sales for a company with more than 9,900 stores around the world.
Milbank, Tweed, Hadley & McCloy finance partner Eric Moser is advising Cencosud on aspects of obtaining financing for the deal. The firm also represented Cencosud in connection with its initial public offering in June.
Davis, Polk & Wardwell is advising JP Morgan Chase, which is providing Cencosud with financing for the deal. The Davis Polk team includes credit partner James Florack, tax partner Samuel Dimon, credit counsel Norberto Quintana, and corporate counsel Jeanine McGuinness. Chilean firm Carey y Cia Ltda., Dutch firm Nauta Dutilh, and Colombian firm Martinez Neira Abogados are also advising JP Morgan, while Philippi, Yrarrazaval, Pulido & Brunner is acting as lead outside counsel to Cencosud, and Posse, Herrera & Ruiz is advising on aspects of Colombian law, according to a Davis Polk spokeswoman.
Baker & McKenzie is among the firms advising Carrefour on tax aspects of the sale of its Colombian assets, according to a Milbank spokesman. The firm’s team includes partner Guillaume Le Camus and counsel Albane Sevin in Paris, along with partner Herman Huidink in Amsterdam and partner Jaime Vargas in Bogotá. (Le Camus and Vargas did not immediately respond to requests for comment.) Carrefour’s other advisers on the deal are Columbian firm Prietocarrizosa, Paris-based firm Bredin Prat, and Amsterdam-based firm De Brauw Blackstone Westbroek, according to the Milbank spokesman.