ACE
Cencosud
Xx
ESSENTIAL FACT
CENCOSUD S.A.
Registration of Securities Registry No. 743
Santiago, May 10, 2022.
Mrs. Solange Berstein Jáuregui,
President
Financial Market Commission,
Avenida Libertador Bernardo O’Higgins N° 1449,
Santiago.
Ref.: Communicates essential fact.
From our consideration:
In compliance with the provisions of Article 9 and second paragraph of Article 10, both of Law No. 18,045 and General Standard No. 30 of the Superintendence of Securities and Insurance, today the Financial Market Commission, we inform you. with respect to the following Essential Fact concerning the company Cencosud S.A. (“Cencosud”):
As of today, The Fresh Market Holdings, Inc. (“TEM”), whose controller is a fund managed by affiliates of Apollo Global Management, Inc., the shareholders of TFM and Cencosud Internacional SpA (“Cencosud Internacional”), a subsidiary of Cencosud, have entered into an agreement to complete the acquisition, by Cencosud International, of 67% of TEM (the “Transaction”).
The agreement also establishes the possibility that through legal mechanisms that are practical in the United States, after a certain period, Cencosud Internacional can reach a 100% stake in TEM.
Cencosud must disburse an amount of approximately US$676,000,000 (six hundred and seventy-six million United States dollars) to acquire 67% of TEM, an amount that may be adjusted based on cash, debt, working capital and certain other TFM variables as of the date on which the Transaction becomes effective.
As usual in this type of operation, the closing of the Transaction is subject to the fulfillment of certain conditions, including obtaining authorization from the competition authority of the United States of America.
The Fresh Market is a premium specialty supermarket focused on high-quality fresh produce and an outstanding, differentiated shopping experience, recognized in 2021 and 2022 by USA Today’s 10Best Readers’ Choice Awards as “Best Supermarket in America.” It operates in 22 U.S. states, primarily Florida, North Carolina (where its parent company is located), Virginia and Georgia, through 160 leased stores. It has approximately 10,159 employees, and its annual gross sales exceed US$1.9 billion.
By virtue of this acquisition, Cencosud will enter the United States market, a country in which it does not yet operate.
The acquisition of 67% of TIFM will be carried out mostly with its own resources, and part of the payment will be used to reduce the company’s debt, so Cencosud will maintain a solid financial position. Cencosud’s financial advisor for this transaction is J.P. Morgan Securities LLC.
This acquisition is expected to have a favorable effect on Cencosud’s consolidated results, taking advantage of the natural synergies that will exist, such as the stability of the dollar, a deep capital market and access to a market with greater purchasing power, among others, without being able to quantify it accurately to date.
Yours sincerely yours,
Matías Videla Solá,
General Manager,
Cencosud S.A.
CC. Santiago Stock Exchange,
Electronic Bag,
Representative of the Bondholders.
Link to the file in CMFChile: https://www.cmfchile.cl/sitio/aplic/serdoc/ver_sgd.php?s567=2701aaa7db2f3bc2303b0cdeb1f559a6VFdwQmVVMXFRVEZOUkVVMFRYcFZNRTVCUFQwPQ==&secuencia=-1&t=1682376108
