June 15 (Bloomberg) -- Grupo Silvio Santos, the Brazilian company controlled by the 78-year-old media magnate, plans to buy a retailer by August and increase outlets 10-fold by 2014 as consolidation in the industry picks up.

The group’s 20-store electronics and home-appliance chain Bau Crediario is looking at three different companies each with 50 to 60 stores, Decio Pedro Thome, the head of retail for Grupo Silvio Santos, said in a telephone interview. The group owned by Silvio Santos, a television host, includes financial institutions, the nation’s second-biggest TV station and hotels.

“We expect an acquisition to happen by August at the latest,” Thome said. “There is no doubt” Bau Crediario wants to become one of Brazil’s seven biggest retailers, he said. Thome wouldn’t say which companies the group is targeting.

The plans follow Cia. Brasileira de Distribuicao Grupo Pao de Acucar’s acquisition of Globex Utilidades SA’s Ponto Frio chain of electronics and home-appliance stores last week to become Brazil’s biggest retailer. Takeovers will continue as smaller businesses struggle with falling sales and a lack of credit, according to Raymond James & Associates Inc.

‘Higher Spreads’

“Though the worst of the crisis has already passed, Brazilian banks maintain a more strict policy, with higher spreads,” said Daniela Bretthauer, retail analyst at Raymond James in Sao Paulo. “The smaller companies still lack access to credit and I don’t know how much longer they will be able to stand by themselves.”

Banco Panamericano SA, Silvio Santos’s bank unit, gained 93 percent in Sao Paulo trading this year through June 12, outperforming the benchmark Bovespa stock index’s 43 percent increase. It fell 3.3 percent to 4.64 reais today. Pao de Acucar rose 18 percent this year through June 12, and dropped 1.3 percent today to 36.20 reais.

Brazilian retail sales contracted 0.1 percent in April compared with March, according to the median estimate in a Bloomberg survey of 15 economists. Annual sales growth quickened to 6.1 percent in April from 1.8 percent in March, according to the same survey. The national statistics agency will announce the April figures tomorrow.

The May data “should be stronger,” Mauricio Rosal, a Latin America economist at Raymond James in Sao Paulo, said in an e-mail.

Pao de Acucar’s June 8 acquisition of the 455 stores owned by Rio de Janeiro-based Ponto Frio, Brazil’s second-biggest electronics and home-appliance chain, created a company with 26 billion reais ($13.5 billion) in annual sales and more than 1,200 stores. The supermarket-chain in Sao Paulo agreed to pay 824.5 million reais for 70 percent of Ponto Frio, overtaking Paris-based Carrefour SA as Brazil’s biggest retailer.

Casas Bahia

Casas Bahia, the country’s biggest electronics and home- appliance retailer, said the same day it agreed to buy the 17- store chain Romelsa to expand in the Northeast region.

Grupo Silvio Santos, based in SBT TV studios on the outskirts of Sao Paulo, also made a bid for Ponto Frio, according to Thome. The group, which split its Bau Crediario stores into an independent unit last year, plans to have 230 retail stores by 2014, he said. Banco Panamericano SA, also part of the group, provides financing to the retail unit, together with state-controlled Caixa Economica Federal, Thome said.

Carrefour, Brazil’s second-biggest retailer, and Bentonville, Arkansas-based Wal-Mart Stores Inc., the third- largest, didn’t return e-mails seeking comment on their plans in the country.

Last Week

The benchmark Bovespa index rose 0.4 percent to 53558.23 last week, led by Usinas Siderurgicas de Minas Gerais, the country’s third-biggest steelmaker, which gained 5.5 percent. Pulp maker Votorantim Celulose e Papel SA preferred shares led decliners with an 8.1 percent drop.

The yield on the government’s zero-coupon bonds due January 2010 fell 16 basis points, to 9.03 percent, according to Banco Votorantim. Brazil’s real strengthened 1.8 percent to 1.9260 reais per dollar.

The following is a list of events in Brazil this week:

Event                                             Date
FGV CPI IPC-S                                     Jun 16
Retail Sales (YoY and MoM)                        Jun 16
FIPE CPI (Weekly)                                 Jun 17
FGV Inflation IGP-10 (MoM)                        Jun 18
COPOM Minutes                                     Jun 18
Tax Collections                                   Jun 18

To contact the reporter on this story: Fabiola Moura in New York at fdemoura@bloomberg.net

Last Updated: June 15, 2009 21:47 EDT