Carrefour, the world's second-largest retailer, said on Monday it would buy Brazilian retail chain Atacadao for 825 million euros ($1.12 billion), making it the country's leading food retailer by sales.

The agreed takeover follows a newspaper report last week which said Carrefour was close to buying Atacadao and after it won exclusive rights to negotiate its purchase.

Atacadao runs 34 discount hypermarkets in Brazil and has property of 214,000 square metres, Carrefour said. With sales of 1.5 billion euros in 2006, it has a 4 percent market share. "This acquisition forms part of Carrefour's strategy to reinforce its presence in key growth markets through a locally adapted multiformat approach," Carrefour said, adding Atacadao's stores were complementary to its Carrefour hypermarkets, Bairro supermarkets and hard discount stores Dia.

Carrefour said its net sales in Brazil were 3.8 billion euros last year.