June 17 (Bloomberg) -- Grupo Silvio Santos’ Bau Crediario electronics and home-appliance chain bought a bigger rival in Brazil as a second monthly drop in retail sales accelerates consolidation in the industry.

The group, run by television host Silvio Santos, said yesterday it agreed to buy Rede Dudony, a 110-store retail chain based in the Southern state of Parana, and is trying to acquire two more companies. The purchase follows takeovers by Cia Brasileira de Distribuicao Grupo Pao de Acucar, Brazil’s biggest retailer, and Casas Bahia, the country’s biggest electronics and home-appliance store, this month.

“We are still going through a tough period, but retail can’t stop, I can’t stop, my company can’t stop,” Decio Pedro Thome, the head of retail for Grupo Silvio Santos, said in a telephone interview.

The acquisitions are picking up after retail sales fell 0.2 percent in April, according to national statistics agency data published this week. Economists expected a 0.1 percent drop, according to the median of 20 forecasts in a Bloomberg survey. Sales rose 6.9 percent in April from a year earlier, as a late Easter holiday bolstered sales in the month.

Bau Crediario, based in Sao Paulo, paid 8 million reais ($4 million) for the company and assumed 25 million reais of Dudony’s debt, Thome said. The group owned by the 78-year-old media magnate increased the number of stores in the Bau Crediario electronics and home-appliance chain to 130, Grupo Silvio Santos said in an e-mailed statement.

Negotiations

Bau Crediario is still negotiating with two other companies as it seeks to almost double outlets by 2014, Thome said. Dudony, based in Maringa, Brazil, has stores in cities in Parana and Sao Paulo states.

“As the other negotiations are just beginning, we will take the focus out of Dudony, turn it into the other prospects and let’s grow, because we need to reach 224 stores by the end of 2013,” Thome said.

Pao de Acucar said June 8 that it acquired the 455 stores owned by Rio de Janeiro-based Ponto Frio, Brazil’s second- biggest electronics and home-appliance chain. The transaction created a company with 26 billion reais ($13.5 billion) in annual sales and more than 1,200 stores.

The Sao Paulo-based Pao de Acucar supermarket chain said it will pay 824.5 million reais for 70 percent of Globex Utilidades SA’s Ponto Frio, overtaking Paris-based Carrefour SA as Brazil’s biggest retailer. Casas Bahia said the same day it agreed to buy the 17-store chain Romelsa to expand in the Northeast region.

Banco Panamericano SA, Silvio Santos’s bank unit, gained 0.9 percent yesterday to 4.68 reais and is up 88 percent this year. Thome said the group financed the acquisition with cash.

Bau Crediario plans to keep Dudony’s 1,168 employees and hire 500 more in Parana state by the end of the year, Thome said. The group expects Dudony to start generating revenue by the end of this year, he said.

“Retail gives a very quick answer and the Brazilian government is helping a lot with these answers,” Thome said.

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

Last Updated: June 16, 2009 23:01 EDT