A Punchy €50 Billion Sales Goal Gets J. Martins Mulling Over M&A

Mint

2 days ago

(Bloomberg) -- Jeronimo Martins, which made its last major acquisition almost two decades ago, may have to shift to a more aggressive strategy in order to boost sales by 50% within five years.
A target of €50 billion in revenue by 2029 or 2030 has kickstarted internal discussions since it was first announced by Chairman Pedro Soares dos Santos in March. While Soares dos Santos — whose family controls the business — said the company is working on a plan to hit that goal, he hasn't publicly explained what it might look like.
'The chairman said very clearly that he's setting that target as an ambition for the group,' Chief Financial Officer Ana Luisa Virginia said in an interview in Lisbon on Aug. 1, after the company reported earnings. 'If the €50 billion can be achieved with or without M&A? I would say most probably with it.'
For analysts, a potential target would be rivals operating in Poland, the firm's most important market. That includes assets owned by France's Carrefour SA as it goes through a strategic review of its portfolio to boost its valuation. Carrefour was one of the top M&A targets in Europe in a recent Bloomberg News survey of risk-arbitrage desks, traders and analysts.
But Virginia said anti-monopoly rules mean Jeronimo Martins would 'not be allowed' to own the whole Carrefour chain in Poland, where her company already controls almost 30% of the market. She declined to comment on whether Jeronimo Martins is interested in buying any of Carrefour's assets on a smaller scale.
'We are monitoring the situation,' said Virginia, referring to the possible sale of Carrefour's operations in Poland. 'We think that there are still white spaces in the Polish market that we prefer to occupy ourselves rather than leave it for our competitors.'
The Portuguese retailer has traditionally prioritized growing its business from within or via small asset purchases, particularly in Poland where it owns the country's biggest supermarket chain Biedronka. While this year it expanded into a new market — Slovakia — Jeronimo Martins is known for a conservative approach when it comes to considering snapping up other businesses.
'We are very careful,' Virginia said from the company's head office in Lisbon. 'Up until now we only acquired things that made sense to our business. We don't buy to sell, and this of course means we do mergers and acquisitions every 10 years or so.'
Jeronimo Martins's last major purchase was completed in 2008 after it agreed with Tengelmann Group to buy its Plus discount supermarkets in Portugal and Poland for about €320 million. While Jeronimo Martins is constantly looking at opportunities in new markets, Virginia said, current acquisitions involve buying small portfolios of stores from retailers that are rolling back or shutting down their operations in markets where the company already has a presence.
The Portuguese retailer's latest deal involved buying 75 supermarkets in Colombia from Colsubsidio. It now plans to spend about €1 billion in boosting its operations in existing markets — Portugal, Poland, Colombia and Slovakia. This year's first-half sales increased 6.7% to €17.4 billion, helping the shares recover 11% in 2025.
Virginia, who was M&A director at Jeronimo Martins until 2008, says she gets pitched on acquisitions from investment bankers 'all the time.'
'We are good friends' with the investment bankers, she said. 'I always say that we are the worst clients.'
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