Brazilian wholesaler Assai creates M&A division, keeps expanding -CEO
By Alberto Alerigi
SAO PAULO, May 5 (Reuters) - Brazilian wholesaler Assai has created a mergers and acquisitions division after the spin-off from former parent GPA SA to look for opportunities, Chief Executive Officer Belmiro Gomes told analysts on Wednesday.
Assai, controlled by France's Casino Guichard Perrachon SA more than doubled net income in the first quarter, to 240 million reais ($44.50 million).
Common shares were up almost 4% in late morning trading in Sao Paulo as investors welcomed the wholesaler's growth.
Assai will continue to expand organically and has 18 new stores under construction, Gomes said in a conference call with analysts on Wednesday. But the group created an M&A division to consider non-organic expansion opportunities.
Assai gained new clients during the COVID pandemic as Brazilians' income dropped and unemployment rose, and consumers looked to save on groceries. The CEO expects to keep these new consumers even after the pandemic subsides.
Assai expects to post stronger second-quarter earnings, and keep reducing its debt ratios.
($1 = 5.3932 reais) (Reporting by Alberto Alerigi Jr.; Writing by Tatiana Bautzer; Editing by Andrea Ricci)
