Wal-Mart Announces Central American Investment
BENTONVILLE, Arkansas – (September 20, 1995) — John Menzer, President and
Chief Executive Officer of Wal-Mart International announced today the purchase of
a 33 1/3 percent interest in Central American Retail Holding Company (CARHCO).
CARHCO is Central America’s largest retailer, with 363 supermarkets and other stores
in the following five countries: Guatemala (120), El Salvador (57), Honduras
(32), Nicaragua (30) and Costa Rica (124). CARHCO has approximately 23,000
associates. Its sales during 2004 were approximately $2.0 billion.
Wal-Mart acquired its interest in CARHCO from the Dutch retailer Royal Ahold NV.
The purchase price was not disclosed. CARHCO was formed as a joint venture
in 2001 with three equal partners: Ahold and two Central American groups:
the Paiz family, the major shareholders of La Fragua, with headquarters in Guatemala,
and Corporación de Supermercados Unidos (CSU), with headquarters in Costa Rica.
“We are delighted to have this opportunity to invest in the future of Central America,”
said Menzer, adding that the alliance had been under discussion for several years.
“We are joining a strong partnership that is delivering outstanding service to customers
throughout the region. We believe our investment will add strength to the
partnership by helping to keep prices low for consumers and will offer new opportunities
to suppliers in the region for additional business development.” As part of
the agreement, Wal-Mart will acquire additional interests over time in CARHCO, including
interests toward achieving majority ownership in the company.
The new partnership demonstrates confidence in the region’s economic potential,
Menzer said, adding that significant investments are planned in the years ahead
to open new stores and serve customers better with improved services, high quality
and innovative products and lower prices.
In addition, specialized training programs are planned for CARHCO associates and
for suppliers to assist in career and business development. A consolidated
network of Central American supermarkets will have vast potential for product commercialization
and regional economic development.
The investment in CARHCO is Wal-Mart’s first in Central America, although the region
is a
major source of apparel for the company. Wal-Mart directly imports more than
$350 million in goods from Guatemala, Honduras, El Salvador, Nicaragua and Costa
Rica. In addition, Wal-Mart purchases goods from many suppliers with farms
and factories in Central America.
Rodrigo Uribe, president of CARHCO, said: “This alliance is not only an important
recognition to Central American companies like La Fragua, CSU and CCA; above all,
it represents a very significant achievement in the attraction of foreign investment
to the region, which will allow us to improve our services and generate more jobs.
Undoubtedly, this alliance will allow us to reach levels of excellence in operations
and customer service of more developed markets for the benefit of the Central American
consumers.”
A similar opinion was expressed by Fernando Paiz, vice-president of CARHCO:
“Our retailing expertise acquired by the years of operations, the common roots stemming
from small family businesses based on similar values and principles, all come together
today to strengthen each other by sharing skills and knowledge. With Wal-Mart we
will create growth opportunities for associates and suppliers. Customers will be
pleased to see better assortment at the best prices.”
UBS Investment Bank and Dresdner Kleinwort Wasserstein acted as financial advisors
to Wal-Mart in this transaction. Credit Suisse First Boston acted as financial advisors
to the Central American partners of CARHCO.
About CARHCO
CARHCO N.V. is the leading supermarket and hypermarket chain in Central America.
It was formed in 2001 with equal investment from the major shareholder of La Fragua
S.A., of Guatemala, Corporación de Supermercados Unidos S.A. (CSU) of Costa Rica,
and Royal Ahold. CARHCO has three operative companies: La Fragua, founded
in Guatemala in 1928 by Carlos Paiz Ayala; CSU, founded in Costa Rica in 1960
by Enrique Uribe Pages; and Corporación de Compañías Agroindustriales (CCA), a supplier
to CARHCO of meat and seafood, fruit, grain, vegetables and bakery products.
As of August 24, La Fragua operated 209 stores in Guatemala, Honduras and El Salvador.
Its formats include Paiz, Hiper Paiz, Despensa Familiar, Club Co, La Despensa de
Don Juan and Maxi Bodega. CSU operated 154 stores in Nicaragua and Costa Rica.
Formats include Más X Menos, Hiper Más, Palí, La Unión and Maxi Bodega. CCA
works throughout the agricultural sector sourcing and distributing fruit, vegetables
and grain purchased from more than 1,000 small producers in Costa Rica and other
Central American countries. It produces breads and pastries and processes
and distributes beef, pork and seafood products from hundreds of small suppliers.
CCA participates in the poultry industry through more than 450 small independent
producers and develops private label grocery and health and beauty aid products,
working with local and regional industries. More information about La Fragua, CSU
and CCA can be obtained on-line at www.lafragua.com, www.csu.co.cr and www.cca.co.cr.
About Wal-Mart Stores, Inc.
Wal-Mart Stores, Inc. operates Wal-Mart Stores, Supercenters, Neighborhood Markets
and SAM'S CLUBS in all 50 states. Internationally, the company operates in Puerto
Rico, Canada, China, Mexico, Brazil, Germany, United Kingdom, Argentina, and South
Korea. The company's securities are listed on the New York and Pacific stock exchanges
under the symbol WMT. Last year, Wal-Mart Stores, Inc., contributed more than $140
million to support communities and local nonprofit organizations. Customers and
associates raised an additional $70 million at stores and clubs. More information
about Wal-Mart can be located on-line at www.walmartstores.com and www.walmart.com.
The SAM'S CLUB Web site can be accessed at www.samsclub.com. And more information
about Wal-Mart's Good.Works. community involvement is available online at www.walmartfoundation.org.