(Dec. 11) Organización Soriana, Mexico’s second-largest retailer, announced last week the purchase of Grupo Gigante’s 199 stores for $1.35 billion.

This transaction includes Gigante stores, Bodega Gigante, and Super G, as well as seven Gigante stores in Los Angeles.

Ricardo Martin Bringas, chief executive officer for Monterrey-based Soriana, said to CNNexpansion, “This is an extremely important day for Soriana, with this purchase we consolidate the company’s leadership, we increase our sales potential by 47%, which will give us the opportunity to provide high quality products and services to thousands of new clients across the country.”

In a news bulletin sent to the Mexican Stock Exchange, Pedro Mejia, Soriana’s director of planning and strategy, said these new acquisitions plan to buy 80% of the Gigante’s total stores inventory worth up to $335 million. The purchase also included equipment and 12 distribution centers.

Soriana’s headquarters, as well as the majority of its stores are in northern Mexico, so with this new acquisition Soriana will be able to increase its presence in central Mexico. This purchase gives Soriana 47 additional stores in Mexico City.

MORE COMPETITIVE

The purchase gives Soriana the opportunity to compete against Wal-Mart de Mexico also known as Walmex, the country’s leading retail chain, and with Comercial Mexicana, Mexico’s third-largest retail chain.

“It’s more competition for them and especially for Comercial Mexicana,” María del Carmen Negrete, retail analyst with Banco Bilbao Vizcaya Argentaria SA in Mexico, said in an interview with Bloomberg News. “Soriana can invest what’s needed to renovate the stores, which Gigante couldn’t,” del Carmen Negrete said.

Soriana plans to pay all the bank loans in five years and employ Gigante’s more than 25,000 employees.

“Soriana plans to change the name of all Gigante stores to Soriana within four months,” Mejia said.

Soriana positions itself much stronger in the Mexico City area with the purchase of 47 Gigante stores there. The area’s population is 23 million, and currently Soriana only operates one store.

“It’s one of the most attractive parts of the transaction.” Mejia said. “This gives us access to the most important market in the country.”