2010 REGISTRATION DOCUMENT (3.4 Mo) - Groupe Casino

3CONSOLIDATED FINANCIAL STATEMENTSNotes to the consolidated fi nancial statementsIssue of preferred shares in consideration for the taxsaving arising on GPA’s goodwill amortisationOn 29 April 2010, the Group increased its interest in GPA from33.6% to 33.9%, following GPA shareholder approval of theissue to Casino of 1.1 million new preferred shares at a price ofBRL 60.39 per share, making a total of BRL 67 million (€30 million).This transaction generated a gain of €11 million recognised under“Other operating income”.Partnership agreement between Casinoand Group Crédit Mutuel-CICOn 27 July 2010, Casino announced the signing of a long-termpartnership agreement with Groupe Crédit Mutuel-CIC to developfinancial products and services in France through its Banque Casinosubsidiary.Under the terms of the agreement, Groupe Crédit Mutuel-CIC willacquire a 50% stake in Banque Casino, which is currently 60% ownedby Casino and 40% by LaSer Cofinoga.Casino has exercised its call option on LaSer Cofinoga’s shareswhich, along with 10% from Casino’s current stake, will be sold toCrédit Mutuel. The transaction is subject to approval by the regulatoryauthorities and is expected to be completed within the next 18 months(see note 32.2).This project is subject to approval by the competent authorities.NOTE 3. BUSINESS COMBINATIONSNote 3.1. Acquisition of Casas BahiaIn December 2009, GPA’s subsidiary Globex Utilidades S.A. (“PontoFrio” or “Globex”) entered into a partnership with the retail business ofCasas Bahia Comercial Ltda (“Casas Bahia”), Brazil’s leading non-foodretailer. The current shareholders of Casas Bahia will contribute theirretail business to Ponto Frio in exchange for a non-controlling interest,while GPA will retain majority ownership in the company.Under the partnership, the two companies will merge their durablegoods and online retailing businesses, enabling GPA to enhance itsproduct offering, improve customer service and facilitate access tocredit.On 1 July 2010, GPA and Casas Bahia signed an amendment to theirinitial partnership agreement, revising certain terms and conditionsand setting out the stages for implementation.On 1 October 2010, as a preliminary stage in the integration ofCasas Bahia’s business, its operating assets were transferred toa new company called Nova Casa Bahia SA (“NCB”). Since then,NCB has used the “Casas Bahia” brand across 526 stores and8 shopping centres in twelve Brazilian states, selling a range ofconsumer electronics, white goods and small household appliances,such as mobile phones, electronic toys, office products, computersand accessories.On 9 November 2010, prior to Globex’s acquisition of NCB shares,GPA subscribed to a new share issue made by its subsidiary Globex.The total consideration comprised BRL 290 million (€123 million) incash, Globex’s “Extra-Eletro” consumer electronics business for BRL90 million (€38 million) and intragroup receivables for BRL 374 million(€158 million).On the same day, Globex acquired the entire share capital of NCB,which is now a fully consolidated subsidiary. The acquisition was paidfor in new Globex shares resulting in a dilution of GPA’s interest inGlobex. After the transaction, GPA retained a controlling interest of52.44% in its Globex subsidiary. The share exchange was based onreports drawn up by an independent accounting firm based on thefinancial statements of NCB and Globex at 30 June 2010.In 2010, NCB contributed €462 million to the Group’s revenue and aloss of €6 million to pre-tax profit. Had it been acquired since 1 January2010, NCB would have contributed €2,189 million to revenue and aloss of €24 million to pre-tax profit.Acquisition-related costs incurred in 2010 totalled €10 million andCasino’s share of €3 million was recognised in “other operatingexpense”.Determination of the purchase priceAs Globex is listed on the Bovespa (São Paulo stock exchange),the fair value of the shares issued by Globex in consideration for theacquisition (the “consideration transferred”) was determined on thebasis of Globex’s share price on the acquisition date.€ millions 31 December 2010Number of Globex shares held by GPA (98.77%) 168,927,975Share price of BRL 15 at 9 November 2010 – in euros 6.34Market value (Bovespa) of the interest in Globex (98.77%) 1,071FAIR VALUE OF THE CONSIDERATION TRANSFERRED (47% OF GLOBEX) 50474 Casino Group | Registration Document 2010