Supermarkets Cencosud Expands Its Presence in Argentina by Acquiring Makro and Basualdo Supermarkets
Supermarkets Cencosud S.A., one of the largest and most prominent retail companies in Latin America, announced today that through its Argentine subsidiaries, it has signed a definitive agreement to acquire 100% of the companies Supermercados Mayoristas Makro S.A. and Roberto Basualdo S.A. The agreement, which underscores Cencosud’s continued commitment to growth in Argentina, is valued at US$ 122.5 million, with potential adjustments based on net debt, working capital, and other contract conditions. This acquisition will be funded entirely with Cencosud’s available resources.
Expanding Market Reach in Argentina
With over three decades of operational history, Makro and Basualdo are well-established players in Argentina’s wholesale retail sector. The companies operate through a Cash & Carry format, which involves wholesale transactions for both business owners and individual customers looking to buy in bulk. The acquisition includes 28 stores, most of which are owned by Makro and Basualdo. These stores are strategically located across Argentina, with a strong presence in major cities such as Buenos Aires, Santa Fe, and Córdoba, covering 12 cities and 10 provinces throughout the country.
Makro, in particular, stands out due to its portfolio of private-label brands, which play a vital role in its business model and appeal to a loyal customer base. This loyalty, combined with their excellent store locations, positions Makro and Basualdo as valuable assets in Cencosud’s expansion strategy.
By acquiring these companies, Supermarkets Cencosud is set to diversify its operations and expand into the wholesale market in Argentina, a sector that has shown potential for further growth. This move not only strengthens Cencosud’s retail portfolio but also offers new opportunities for synergies with its existing operations.
Strategic Growth and Synergies
Rodrigo Larrain, CEO of Cencosud, expressed his satisfaction with the acquisition, noting that the move aligns with the company’s broader strategy of growth and expansion in key Latin American markets. “We are very pleased with this opportunity for growth in Argentina, a market where we have been present for more than 40 years through our Supermarkets, Shopping Centers, Home Improvement Stores, and Financial Services,” Larrain said. “Makro has excellent locations of its own, complementary to ours, and is the entry into the Cash & Carry format, which we already operate in Brazil through GIGA. We see attractive opportunities for synergies and strengthening of our operation in the country.”
This acquisition is expected to provide Supermarkets Cencosud with a significant boost in its Argentine operations, opening up new revenue streams through the Cash & Carry model. The wholesale sector has grown considerably, especially in urban areas, where businesses and consumers increasingly seek the convenience and cost savings of buying in bulk. By incorporating Makro’s expertise in this area, Cencosud will be able to capture a larger share of this growing market, strengthening its position in the competitive retail landscape.
Market Expansion and Regional Integration
The acquisition also plays into Supermarkets Cencosud’s broader strategy of regional integration. While the company has long been active in Argentina, it has made significant strides in other Latin American countries, notably Brazil, where it already operates a successful Cash & Carry format through its GIGA brand. This experience in Brazil allows Cencosud to better understand the dynamics of the wholesale market, which can now be leveraged in Argentina for greater impact.
By integrating Makro’s operations, Cencosud will have the ability to offer a more comprehensive range of products across both wholesale and retail sectors. This integration is expected to improve operational efficiencies, streamline supply chains, and enhance the customer experience.
In addition, Makro’s established presence in key Argentine cities gives Cencosud a robust platform to grow its retail presence across the country. The strategic locations of these stores are set to enhance Cencosud’s footprint, helping it reach new customers and solidifying its brand reputation in a highly competitive market.
Supermarkets Cencosud’s Argentine Operations
Supermarkets Cencosud’s Argentine operations are already well-established, with a significant footprint in the country. The company’s supermarket division includes some of the most recognized retail brands in Argentina, such as Jumbo and Disco. Over the years, Cencosud has also invested heavily in its shopping centers, home improvement stores, and financial services, diversifying its offerings and expanding its reach. The acquisition of Makro and Basualdo now adds a new dimension to its operations, further strengthening Cencosud’s position in Argentina’s retail landscape.
The move to enter the Cash & Carry format also complements Cencosud’s broader strategy of offering a diverse array of shopping experiences. The wholesale format appeals to both businesses and individual consumers who require bulk purchasing options. By providing more tailored services to businesses and customers, Cencosud is poised to capture a larger share of the market and benefit from increased customer loyalty.
The Future of Cencosud in Argentina
Cencosud’s acquisition of Makro and Basualdo marks a significant milestone in the company’s growth strategy. The synergies created by combining Cencosud’s existing operations with the new Cash & Carry format will allow the company to offer enhanced services, streamline operations, and increase market penetration in Argentina.
Moreover, this acquisition positions Cencosud for even greater success as it navigates the evolving retail landscape. The company’s commitment to innovation and growth, coupled with its experience in managing a diverse retail portfolio, will ensure that the integration of Makro and Basualdo delivers long-term value for shareholders, customers, and employees alike.
In conclusion, the acquisition of Makro and Basualdo Supermarkets is a strategic move for Cencosud, allowing the company to enter a high-growth segment in the Argentine market and leverage synergies across its existing operations. The deal enhances Cencosud’s footprint in Argentina, strengthens its position in the wholesale sector, and opens up new avenues for growth in a competitive retail market. As the company continues to expand its presence in the region, it is well-positioned to remain a leader in Latin American retail, providing diverse and innovative solutions for customers and businesses alike.
