Business

Brazil's retailer Grupo Soma signs deal to acquire Cia Hering

The announcement comes almost two weeks after Cia. Hering said it declined an unsolicited merger proposal by Arezzo

Photo: Aluísio Alves/REUTERS
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  • The amount defined is equivalent to Grupo Soma paying Hering’s shareholders a premium of approximately 43.5%;
  • The companies assumed an exclusive commitment, the non-compliance of which provides for the payment of a fine of BRL 250 million.

Brazil‘s Grupo Soma, owner of the fashion stores Farm and Animale, announced on Monday that it closed an agreement to incorporate Cia Hering, at a time when fashion companies in Brazil have been affected by the social isolation measures taken to contain the pandemic of the COVID-19.

The amount defined is equivalent to Grupo Soma paying Hering’s shareholders a premium of approximately 43.5%, based on the closing price of the companies’ shares last Friday at B3 (Brazil‘s Stock Exchange), valuing Cia Hering at approximately BRL 5.32 billion.

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According to material facts issued by both companies, the shareholders of Cia Hering will receive 1 common share and 1 preferred share of the new company for each share they currently hold. The sum group will pay BRL 9.630957 in cash and 1.625107 common share for each share of Cia Hering.

The companies assumed an exclusive commitment, the non-compliance of which provides for the payment of a fine of BRL 250 million.

The announcement comes almost two weeks after Cia. Hering said it declined an unsolicited merger proposal made by Arezzo.

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The merger agreement between Grupo Soma and Hering made the main index of the São Paulo stock exchange rise on Monday. At 10:43 am, the Ibovespa index appreciated 0.35%, at 120,950.13 points.

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Hering’s shares were up 27.5% at BRL 28.90, while Grupo Soma’s had gained 1.8% at BRL 14.35.

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