In a significant step to reduce mounting debt levels, French retailer Group Casino has sold its controlling stake in one of Thailand’s largest supermarket chains. TCC Group, which is owned by Thai business tycoon Charoen Sirivadhanabhakdi, has agreed to purchase a 58.6 percent stake in Big C for $3.5bn, thereby valuing the company at $7.10 per share.
According to The Financial Times, with over 700 outlets across Thailand, Big C’s market capitalisation nears €4.bn, while its annual revenue for 2015 totalled €3.4bn.
The sale of Big C is part of Casino’s 2016 deleveraging strategy, which also includes selling stakes in its various Vietnamese assets. When completed by March 31, the deal will enable the French group to reduce its $6bn net debt by $3.3bn.
It is hoped that this new approach will prevent Casino from being downgraded to junk status, as warned by Standard & Poor’s when the French retailer was placed on ‘negative watch’ at the start of the year. Although the sale of Big C will help to reduce its debt, with around 40 percent of sales coming from the Latin American market and continued economic stagnation in the region, Casino still faces a difficult year ahead.
Big C is the latest in a recent string of acquisitions made by self-made billionaire Charoen, who founded Thailand’s largest beverage company, ThaiBev. In the years, since, Charoen has diversified his portfolio by buying up vast assets in property, finance and agriculture, while his acquisition of a majority stake in Singaporean conglomerate Fraser and Neave in 2013 cemented his status as one of the region’s biggest spenders. Continuing the pace, Charoen closed a $711m deal to purchase the Metro Group’s chain and carry business in Vietnam in January.
With the news of Big C now under his belt as well, there seems to be no sign of Charoen slowing down in the coming year.