- According to the companies, the collection to be spun off by Lojas Americanas for B2W corresponds to 100% of physical assets and 57% of fintech Ame;
- B2W is currently 62.5% controlled by Lojas Americanas.
The boards of directors of Brazil‘s Lojas Americanas and its subsidiary B2W approved on Wednesday a proposal to merge the companies’ operations, in a design that paves the way for an eventual listing of the group in the United States in the short term, according to a material fact sent to the market.
The exchange ratio of the proposal is that the shareholder of Lojas Americanas, holder of 1 common share or 1 preferred share, receives as a result of the merger 0.18 B2W common share. As a result, B2W will issue 339,355,391 common shares to Lojas Americanas’ shareholders.
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The companies announced in mid-February that they were studying a combination of their operations at a time when the impacts of social isolation measures catapulted e-commerce in Brazil. At the time, the companies did not mention plans for public listing in the U.S.
According to the companies, the collection to be spun off by Lojas Americanas for B2W corresponds to 100% of physical assets and 57% of fintech Ame. The value of this spun-off portion is worth at least BRL 6.27 billion, according to the documents. With the conclusion of the transaction, expected to occur in about 40 days, B2W will have its name changed to Americanas SA.
The transaction justification protocol states that the appraisal report prepared by Apsis (Brazil‘s entrepreneurship consultancy) calculated that the exchange ratio based on the collection to be spun off from Lojas Americanas would be about 0.134 B2W common shares for each share of the parent company. “There is no need to talk, therefore, about the right of withdrawal for dissenting Lojas Americanas shareholders”, states the document.
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Americanas: M&A engine
B2W is currently 62.5% controlled by Lojas Americanas. The company has some of the main e-commerce sites in Brazil, such as Submarino and Americanas.com, in addition to a relevant digital payment operation, Ame.
Both companies had been announcing partnerships for months to create the so-called omnichannel, in which customers can make purchases on the internet and choose to withdraw products in brick-and-mortar stores or use store infrastructure such as small product storage centers.
The companies informed that the proposal foresees that Lojas Americanas will continue to exist through the control of B2W. The shares of both companies will continue to be listed in their respective segments on B3, Brazil‘s stock exchange.
“Once the partial spin-off is approved, 100% of the companies’ operational activities will be developed directly by B2W”, said the companies.
Among the objectives of the operation, the companies highlight that the combined company will create “an even more powerful merger and acquisition engine to evaluate, negotiate and integrate new acquisitions.”
Together, the companies have a network of about 1,700 physical stores in 750 cities across the country and an online marketplace with more than 87,000 salespeople and total sales of BRL 40 billion last year.
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Will Americanas go public in the U.S.?
In addition to the operation, Lojas Americanas is studying a possible listing in the United States through migration of the company’s shareholder base. This listed company, to be called “Americanas Inc” would have a direct stake in the new company formed from the merger of Lojas Americanas and B2W operations.
According to the companies, it is too early to assess what would be the legal structure to be adopted for this eventual new reorganization of the group. However, in a presentation to the market, the companies estimate that the creation of Americanas Inc and the listing could occur already “at the beginning of 2022”.
The purpose of the eventual listing in the USA would be to increase sources of financing, reduce the cost of capital and increase the liquidity of the shares, according to a relevant fact.