Case Detail

Case Summary

CBD vs. Casino: How Brazil's Biggest Retailer Fought a French Governance Takeover—and Lost

Case Number: 5-115-003, Year Published: 2015

HBS Number: KEL909

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Key Concepts

Board of Directors, Corporate Governance, Ethics, General Management, Global Strategy, International Business, Leadership, Organizational Structure, Strategic Alliances, Succession Planning


Brazilian retail markets had been a tempting arena for growth-minded companies since the country instituted democratic reforms in the 1980s. To raise capital for continued expansion, Abílio Diniz, the billionaire chairman of Brazil’s number-one retailer, Companhia Brasileira de Distribuição (CBD), entered a long-term agreement in 2005 to transfer control of the retail empire to the CEO of the French retailer Casino Guichard-Perrachon SA in 2012.

As the date for the planned takeover drew near, Diniz tried to get around his agreement with Casino by engaging in secret negotiations to create a new, Brazil-based partnership with Carrefour SA, Casino’s retailing archrival in France. Drawing on his network of influential advisors and investors and his close ties with government, Diniz secretly struck a plan to secure government-backed private funding to merge CBD with Carrefour’s Brazilian operations and install himself at the helm of a new retailing giant with a commanding Brazilian market share.

Once discovered, the proposal sparked a fierce counterattack by Casino’s chairman, Jean-Charles Naouri. Marshaling an army of lawyers, Naouri filed a request for international arbitration, raised Casino’s stake in CBD, and sought and won a French court order to raid Carrefour headquarters for documents. Naouri was able to enforce the 2005 agreement after persuading Brazilian officials to abandon their plans to support a CBD-Carrefour merger. The battle led to a permanent split between former partners Naouri and Diniz—and to Diniz’s eventual exit from the Brazilian retailing empire he had built.

Students will explore how weak corporate governance at CBD and in Brazil in general, as well as political and cultural differences between the two leaders and their respective nations, helped ignite one of the biggest intercontinental boardroom showdowns in history.

Learning Objectives

After reading and analyzing the case, students will be able to:

  • Discuss the impact of family control of large companies in different cultures, including the family feuds that affect strategy and performance
  • Recognize the differences among laws, governance, and ethics across countries, companies, and cultures, and understand how these differences can affect strategy
  • Discuss how weak corporate governance can reduce the quality of decision-making and the market value of companies
  • Explain how nationalism and close business-government ties in emerging economies can affect decision-making by business leaders and boards

Number of Pages: 31

Extended Case Information

Teaching Areas: Management

Teaching Note Available: Yes

Geographic: Brazil; France

Industry: Retail

Organization Name: Companhia Brasileira de Distribuição (CBD) and Casino Guichard-Perrachon

Organization Size: Large

Decision Maker Position: CEO

Decision Maker Gender: Male

Year of Case: 2012