2010 REGISTRATION DOCUMENT (3.4 Mo) - Groupe Casino

PRESENTATION OF THE CASINO GROUPBusiness and strategy1■■■Amortisation of this goodwill will generate total tax savings ofBRL517 million (€235 million) for GPA over an estimated six-yearperiod beginning in 2008. In exchange for the transferred goodwill,GPA agreed to pay 80% of the tax savings back to Casino in theform of new GPA preferred stock.When the goodwill amortisation period ends, Casino’s interestin GPA will stand at around 35% based on the current shareprice (1) .On 1 July 2010, GPA and Casas Bahia announced the signature ofan amendment of their partnership agreement signed in December2009. The two parties revised certain terms and conditions of theirpartnership agreement without altering the general principles of theoriginal agreement.This strategic partnership will help GPA strengthen its position asBrazil’s leading retailer. Casino welcomes this agreement, whichhighlights the strategic importance of GPA and the Brazilian marketto the Group.The agreement became effective on 9 November 2010, when theacquisition of Casas Bahia was approved by GPA’s shareholders.Casas Bahia has been fully consolidated by GPA since that date.On 27 July 2010, Casino announced that it has signed a long-termpartnership agreement with Groupe Crédit Mutuel-CIC to developfinancial products and services in France through its BanqueCasino subsidiary.Under the terms of the agreement, Groupe Crédit Mutuel-CIC willacquire a 50% stake in Banque Casino, which is currently 60%owned by Casino and 40% by LaSer Cofinoga. Casino has exercisedits call option on LaSer Cofinoga’s shares which, along with 10%of Casino’s current stake, will be sold to Crédit Mutuel.The transaction is subject to approval by the regulatory authoritiesand is expected to be completed within the next 18 months.On 15 November 2010, Casino’s Big C subsidiary announcedthat it had signed a definitive agreement with Carrefour to acquireits business operations in Thailand for a total consideration ofTHB35.5 billion (€868 million) (2) , implying a pro forma 2010e EV/EBITDA multiple of 8.6x including run-rate synergies.Carrefour Thailand operates a network of 42 stores, including34 hypermarkets, as well as 37 shopping centres. The companyis expected to generate sales of approximately THB30 billion(€734 million) in 2010. Big C and Carrefour’s Thai networks present■strong geographical complementarities, enabling Big C to doubleits presence in Greater Bangkok.With 103 hypermarkets in total and a combined 2010 estimatedturnover of over THB100 billion (over €2.4 billion), Big C willsignificantly expand its market position and will become the Thaico-leader in the hypermarket segment.Carrefour Thailand’s 37 shopping centres account for close to 50%of EBITDA. After the transaction, the total number of shoppingcentres will exceed 100 with 585,000 sq.m. of gross leasable area.This enlarged portfolio reinforces Big C’s dual retail-property strategyallowing the implementation of value-creating opportunities.The acquisition will generate significant synergies equivalent to about1.2% of combined 2010e sales on a run-rate basis. The synergiesare expected to be fully implemented by 2013.The acquisition will be financed out of Big C’s existing cash balanceresources as well as through debt financing. It should be accretiveon Big C’s earnings as of next year.The transaction allows Casino to strengthen significantly its marketposition in one of its key countries. It is in line with Casino’sstrategy of both selective development on high growth marketswhere it enjoys leadership positions, and optimisation of its assetportfolio.In that respect, in addition to its €1 billion asset disposal programme,Casino announced its intention to dispose of assets for an amountof €700 million in 2011.The acquisition was approved by Big C’s shareholders on 5 January2011.On 26 November 2010, the Casino Group announced that ithad signed an agreement to form a strategic partnership withthe Bolivarian Republic of Venezuela, which has acquired 80.1%of Cativen for a total consideration of US$690 million. Casinohas retained a 19.9% participation in the company to continueproviding operational support and develop cooperation with thenew state-controlled entity.Under this agreement, the Casino Group will receive a totalconsideration of US$622.5 million, of which 60% will be paidupon closing the deal, including 20% in cash and 40% in two US$denominated promissory notes. The remaining 40% will be paidin cash in 2011.1.3 BUSINESS AND STRATEGY1.3.1 MAJOR MILESTONES IN THE GROUP’S HISTORYThe Casino banner dates back to 1898, when Geoffroy Guichardcreated Société des Magasins du Casino and opened the first storein Veauche in central France. Just three years later, in 1901, the firstCasino brand products were launched, thus pioneering the privatelabelconcept.The Group expanded rapidly until the eve of the Second World War,opening more than 500 stores in ten years. It initially focused on theSaint-Étienne and Clermont-Ferrand regions and during the 1930sexpanded its reach down to the Côte d’Azur. In 1939, the Groupmanaged nine warehouses and almost 2,500 retail stores.In the 1950s, Casino embarked on a policy of diversifying its formatsand its business activities. The first self-service store opened in 1948,the first Casino supermarket in 1960, the first Casino Cafétéria in 1967and the first Géant hypermarket in 1970. Acquisition of L’Épargne in1970 extended the Group’s operations to south-western France.(1) If minority shareholders exercise their pre-emptive subscription rights, GPA will repay part of Casino’s share of the tax savings in cash, thereby reducing the increase in Casino’sstake in the company.(2) Based on a THB/€ exchange rate of 40.859 on 12 November, 2010.Registration Document 2010 | Casino Group5