Central Group has won the bid to acquire Casino Group's Big C operation in Vietnam for €920 million (36.7 billion baht) after beating rival TCC Group owned by billionaire Charoen Sirivadhanabhakdi.
Central is partnering Nguyen Kim Group, the biggest operator of appliance stores in Vietnam, on the deal.
"The Big C Vietnam acquisition represents the strength of Central Group's will to expand and keep expanding its business in Asia," said Tos Chirathivat, chief executive of Central Group.
Big C Vietnam, which has operated for more than 18 years, has stores nationwide including 33 hypermarkets, 30 shopping centres and 10 convenience stores. Total revenue in 2015 was €586 million.
Central Group has had a presence in the Vietnamese market since 2013 with the opening of its first Supersports store. A year later, it opened two Robins department stores, one each in Hanoi and Ho Chi Minh City.
The group formed a partnership with Nguyen Kim Group early last year to co-invest in the latter's electrical appliance store chain in Vietnam.
Apart from Vietnam, Central Group also has retail operations in Indonesia and Malaysia.
Mr Tos expects the Big C Vietnam acquisition to strengthen Central's retail operations in Asia and drive its total sales, both domestic and overseas, this year to more than its target of 337.04 billion baht.
Vietnam has huge market potential because its modern retail market is still smaller than its traditional market and has few big retail players.
"That's why Central wants to have more business interests over there," a retail industry source said.
Central Group and Mr Charoen's TCC Group are both keen to expand in neighbouring Southeast Asian markets in search of faster growth.
French group Casino, on the other hand, is retreating from fast-growing Asian markets as it has been under pressure to cut down its heavy debt load.
Casino shares tumbled in December after short seller Muddy Waters said the group was "dangerously leveraged" and managed for the short term.
Casino has been battling of late to restore its investment-grade credit rating after Standard & Poor's Ratings Services said it risked a downgrade to junk status.
It achieved its Vietnam sale at a multiple of 1.8 times net sales, the company said in a release.
In February, Casino sold its stake in Big C's Thailand operation for €3.1 billion to TCC Group, which beat Central Group in the bidding.
Berli Jucker Plc, a unit of TCC Group, now holds a 58.55% stake in Big C, which has plans to open 84 new stores this year, including branches of Big C Market and Mini Big C as well as Pure drugstores.
Casino chief executive Jean-Charles Naouri said he was confident his group would manage to sell €4 billion of assets to cut debt that totalled €6.1 billion at the end of 2015. He did not rule out exceeding that target.
HSBC advised Casino on the Vietnam sale, while Citigroup and Deutsche Bank advised Central, said people familiar with the matter who declined to be identified because the information is not public.