Crossing the Line

Sep 1, 2011

BNDES has made a habit of supporting consolidation to create national champions. But was its attempt to wade into the fight between Carrefour and Casino a miscalculation?

by Jef Cozza

Brazil’s development bank, BNDES, has long considered itself in the business of helping to create national champions in order to compete in the global marketplace. But the bank’s latest attempt to consolidate a market – the proposed merger between France’s Carrefour and Companhia Brasileira de Distribuição (CBD), better known as Grupo Pão de Açúcar (GPA) – raised a public outcry and forced the government entity to beat a hasty retreat.

Criticism of BNDES’s role in consolidating Brazilian industries is not new, but its involvement in so many recent acquisitions may be pushing public opinion against the national champion model. With market participants wondering why the government entity would need to intervene in what was essentially a battle between two French retailers, BNDES may now face heightened scrutiny by a dubious public on its...

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