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Mexico’s Chedraui buys 250 Smart & Final stores in US

Mexico City, Mexico — Mexico’s commercial chain Grupo Chedraui announced on Thursday the purchase, through its subsidiary Bodega Latina Corporation, of the US retailer Smart & Final.

The acquisition, which cost $620 million USD and operates more than 250 stores in the United States and northern Mexico, will close in the second or third quarter of this year and include the absorption of a “certain indebtedness” for the acquirer, Chedraui said in a statement sent to the Mexican stock exchange.

“It is a very relevant operation for Chedraui, not only because it is the largest transaction in its history and represents 42 percent of its market capitalization, but also because it will position it as the second largest chain of self-service stores in the country,” said the Monex Financial Group.

“The Board of Directors of Grupo Comercial Chedraui has approved this transaction,” said the company, adding that it is awaiting regulatory approvals in Mexico and the United States.

After completing the operation, Smart & Final, which had investments from funds affiliated with Apollo Global Management, will function as a separate operating unit with limited integration, the Mexican company detailed.

Chedraui announced that Smart & Final and Smart & Final Extra! will be integrated into its subsidiary in the United States, Bodega Latina under the formats of El Súper and Fiesta and that the acquisition will allow it to enter the self-service segment in the northwest of Mexico.

The company says it expects to finance the operation through the contracting of debt at the subsidiary level with credit support from the parent company Grupo Chedraui.