By Matthew Cowley and Paulo Winterstein
SAO PAULO--Brazilian billionaire Abilio Diniz on Friday said he
has opted to step down as chairman of the supermarket chain he and
his family built into the nation's largest retail group, after
striking an agreement with partner-turned-foe, Jean-Charles Naouri,
the chief executive of French retail group Casino
Guichard-Perrachon SA (CGUSY, CO.FR).
Mr. Diniz's departure puts an end to more than two years of
bitter dispute that had turned a harmonious partnership into a
fight for control of Cia. Brasileira de Distribuicao (CBD,
PCAR4.BR), owner of the high-end Pao de Acucar supermarket chain,
the largest in this nation of about 200 million people.
The move reaffirms Casino's full control of the retail group,
which reported revenues of 57.2 billion Brazilian reais ($24.9
billion) in 2012.
In 2005, Mr. Diniz stuck a deal to sell the group, known as
Grupo Pao de Acucar or GPA, to Mr. Naouri's Casino, through a
step-up transaction that would only be completed in 2012. After
more than five years of working together, the two had a falling out
in 2011, when Mr. Diniz proposed a merger of GPA with the local
operations of Casino's French rival, Carrefour SA (CRRFY,
CA.FR).
Casino opposed GPA's deal with Carrefour, which eventually fell
apart, but more than two years of conflict ensued. In 2012, Mr.
Diniz handed over control of GPA to Casino as planned and remained
as chairman of the board of directors at GPA, as the two sides
reached an uncomfortable standoff.
Mr. Diniz reignited the fighting this year after opting to
become chairman of Brazil's giant food company BRF SA (BRFS,
BRFS3.BR). Casino said this created a conflict of interest, a
charge which Mr. Diniz has rejected.
Friday's announcement, made by Mr. Diniz in an upscale bookstore
in a plush Sao Paulo neighborhood, came on the eve of the 65th
anniversary of the founding of Pao de Acucar by Mr. Diniz's father,
Valentim dos Santos Diniz, who moved from Portugal to Brazil in
1929 and founded the supermarket in 1948.
Mr. Diniz had said farewell to GPA employees and that it "hurt
my heart," but he was happy to be reasserting his own
"independence" on the eve of Brazil's Independence Day, Sept.
7.
"I'm happy primarily because it brings to an end the last two
years of fighting," Mr. Diniz said.
In a statement, Mr. Naouri said: "I express all my gratitude to
Mr. Abilio Diniz and his family for their multiple contributions
and I wish them success in their future projects."
As part of the settlement with Casino, Mr. Diniz said he will
exchange all of his voting shares in the Wilkes holding company,
which controls GPA, for preferred shares in GPA itself. Meanwhile,
all the arbitration cases brought by both sides throughout the
dispute will be dropped, he said.
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