GRUPO COMERCIAL CHEDRAUI ANNOUNCES THE ACQUISITION OF TIENDAS DE DESCUENTO ARTELI, S. A. DE C.V.

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Grupo Comercial Chedraui, S.A.B. de C.V.

Dec 14, 2022, 18:04 ET

MEXICO CITY, Dec. 14, 2022 /PRNewswire/ -- Grupo Comercial Chedraui, S.A.B. de C.V. ("Chedraui") (BMV: CHDRAUIB) announces that today it completed the acquisition of Tiendas de Descuento Arteli, S. A. de C. V. ("Arteli") store chain.

Arteli is a chain of supermarket stores based in Tampico, Tamaulipas, that has been in operation for over 40 years with 2022 estimated sales of approximately $4.9 billion pesos. It has 36 stores operating under 3 different formats: Arteli, Arteli Express and Aká Superbodega. These formats complement the existing Chedraui formats of Tiendas Chedraui, Supercitos and Superchedraui. This transaction allows the Company to attain a leadership position in the Huasteca region of Veracruz, Tamaulipas, Hidalgo and San Luis Potosí, and in particular, in the Tampico-Madero-Altamira metropolitan area.

The purchase agreement implies an estimated 2022 EV/EBITDA multiple of 3 times. The transaction is expected to be accretive to Chedraui's earnings per share, and help improve the Company's consolidated ROIC in the first year following the acquisition. The transaction will not require an increase in debt and will be funded with cash available on Chedraui's balance sheet.

José Antonio Chedraui Eguía, CEO of Chedraui, commented: "Continuing with our growth strategy, we are excited about the combination of Grupo Comercial Chedraui and Arteli, which further scales and strengthens our presence in Northeast Mexico. Arteli will allow us to better serve customers in the region and strengthen our value proposition. To ensure there's not a disruption to our customers, we plan to maintain the existing commercial and labor agreements, carrying out a methodical integration, in order to identify the best practices in both businesses and to ensure that we achieve the synergies that the combined operation can provide."

In addition to the 36 stores, the transaction includes a Distribution Center located in Tampico and a bread, tortilla, and meat processing plant, which will complement Chedraui's infrastructure and allow synergies to be obtained by also serving the existing stores in the region.

This acquisition is aligned with our long-term strategy of finding financially attractive opportunities for our shareholders, while maintaining leverage in optimal ranges. This transaction reflects our ongoing commitment to serve customers, families, and businesses in all the regions in which we operate, including our more than 62,000 employees at Grupo Comercial Chedraui and more than 2,000 employees at Arteli. Chedraui will have a combined infrastructure that will allow synergies between operations, giving the Company a leadership position in the metropolitan region of Tampico.

Arturo Elizondo, President of Arteli, said: "The transaction shows the strength of Arteli's operation, the quality of the brand and the talent and experience that underpin the business. Under the ownership of Chedraui, Arteli will have the benefits of belonging to such a recognized Group in the retail market in Mexico. I am confident that the union of both operations will contribute to the economy of the regions in which Arteli currently operates."

About Grupo Comercial Chedraui

Chedraui is a publicly owned company created under the name Grupo Comercial Chedraui, S.A.B. de C.V., that operates hypermarkets and supermarkets in Mexico and the United States. Grupo Comercial Chedraui, S.A.B. de C.V. trades in the Mexican Stock Exchange under the ticker "CHDRAUIB". For additional information on Chedraui, please visit www.grupochedraui.com.mx.

About Arteli

Arteli, a chain of discount stores with more than 40 years of operation based in Tampico, Tamaulipas, operates under 3 different formats: Arteli, Arteli Express and Aká Superbodega. The chain has 36 stores, giving it a leadership position in the states of Hidalgo, San Luis Potosí, Tamaulipas and Veracruz. For the year 2022, the chain estimates sales of around $4.9 billion pesos. For additional information on Arteli: https://www.arteli.com.mx/

This press release contains certain forward-looking statements that reflect the current views and/or expectations of the Company and its management with respect to its performance, business and future events. We use words such as "believe," "anticipate," "plan," "expect," "intend," "target," "estimate," "project," "predict," "forecast," "guideline," "should" and other similar expressions to identify forward-looking statements, but they are not the only way we identify such statements. Such statements are subject to a number of risks, uncertainties and assumptions. We caution you that a number of important factors could cause actual results to differ materially from the plans, objectives, expectations, estimates and intentions expressed in this release. The Company is under no obligation and expressly disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

SOURCE Grupo Comercial Chedraui, S.A.B. de C.V.