By Luciana Magalhaes and Matthew Cowley
SAO PAULO--A very public corporate struggle involving two
well-known retail groups in France and Brazil ended Friday with one
surprise: that there were no surprises.
In a smooth transition, Brazilian businessman Abilio Diniz, 75,
handed over control of the company founded by his family, Brazil's
largest retailer Grupo Pao de Acucar, to French partner Casino
Guichard-Perrachon SA (CO.FR, CGUSY).
"I thought a lot about what I should say today," Mr. Diniz said
in the GPA's extraordinary shareholder's meeting held Friday
afternoon, according to a prepared text released after the meeting.
"Because of what occurred in the last months, I was taken by
resentment, sadness and deception."
His partner for many years, Casino CEO and Chairman Jean-Charles
Naouri, also sent a statement to the market marked by a personal
tone, but a very different one: "I am very happy and proud that the
Casino Group is taking this new role in a magnificent company such
as GPA."
As of Friday, Naouri is also chairman of Wilkes, the holding
company that controls GPA.
As part of the transition process, GPA's shareholders approved
the appointment of three new board members, while two board members
representing Mr. Deniz followed the script and stepped down.
While the transition happened in a cordial climate, the two
partners' relationship had been difficult for many months. In 2011,
without consulting Casino, Mr. Diniz proposed a merger with the
Brazilian unit of France's Carrefour SA (CA.FR). Mr. Naouri
rejected the deal and the attempt failed.
Their public disagreement has been making headlines since,
leading to expectations of a bumpy transition.
"In the last months I was accused of breaking contracts and of
not complying with what was agreed. I am here to prove that those
accusations were false," Mr. Diniz said in his statement
Friday.
The Brazilian businessman will stay on as GPA's chairman. The
shareholders agreement gives him the right to keep the position as
long as the company does well and he is in good health.
In spite of uncertainties about the ability of the partners to
work together after the transfer, the market reacted positively to
the smooth handover on Friday. Shares of GPA (PCAR4.BR) closed
2.03% higher at 75.00 Brazilian reais ($36.38) on the Sao Paulo
stock exchange.
In Mr. Naouri's Friday note, he affirmed Casino will support
GPA's management, aiming to strengthen the group's leadership.
"I will, together with the entire Casino group, further support
GPA's management team, led by Eneas Pestana, its CEO, in its
objective to strengthen GPA's leadership and make it an even more
beloved and admired company," he said.
In a contract signed in 2005, Mr. Diniz made Casino his partner
in GPA. But the contract also gave the French company the option to
become GPA's sole controller starting June 22, 2012. Mr. Diniz
remains as GPA's second-biggest shareholder.
GPA currently has more than 1,800 stores, operating in different
market segments such as food and white goods. In the first quarter
of 2012, GPA had a net income of BRL167 million, 25.8% higher than
in the first quarter of 2011. The company's revenue in 2011 reached
BRL52.6 billion, 45% higher than 2010.
Write to Luciana Magalhaes at luciana.magalhaes@dowjones.com
