In another step towards the merger, Localiza and Unidas sell assets for BRL 3.5 billion
- June 14, 2022
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In December 2021, when Localiza and Unidas finally received approval from the Administrative Council for Economic Defense (Cade) to carry out the merger announced in September 2020, a question arose: who would buy the cars and assets of Unidas stipulated as remedies for the approval of the transaction?
This answer has just been known and involves a billion dollar transaction. On the morning of this Monday, June 13, six months after the green light given by Cade, Localiza and Unidas announced in a joint material fact that they had entered into an agreement to complete this divestment.
The agreement in question was signed with Ouro Verde, a company that leases and outsources cars, trucks, machinery and equipment, and buys and sells used vehicles, whose controlling partner is Cedar Fundo de Investimento em Participações Multiestratégia, a fund managed by Brookfield Asset Management.
In the transaction closed by the trio, which may still involve adjustments, Ouro Verde will disburse R$3.57 billion for assets from Unidas’ rental and used car operations, which includes approximately 49,000 cars.
Interestingly, Ouro Verde was one of the companies to take a stand against the merger of Localiza and Unidas. In September last year, the company asked Cade to disapprove the operation. Now, with the transaction, the merger of the two companies can be made possible.
The announced volume is within the projections made by Credit Suisse. In December, when Cade released the drugs in question for the operation, the Swiss bank estimated in a report that the range would be between 45,000 and 50,000 vehicles. At the time, Unidas had a total fleet of 72,600 cars, in addition to 261 stores, 223 of which were owned and 38 franchised.
In September 2021, Ouro Verde announced that it had raised a BRL 206 million investment from Brookfield to expand its fleet, at the time, of 28,900 vehicles. The round involved the possibility of an additional investment of R$300 million.
According to the material fact, the closing of the transaction is subject to the fulfillment of certain suspensive conditions. Among them, the approval of the purchaser by the Court of Cade; the approval of the transaction itself by the agency; and the consummation of the business combination between Localiza and Unidas.
The statement also informs that the three companies will immediately submit to CADE all documents referring to the agreement, which had the banks Scotiabank, BTG Pactual and Citi, as financial advisors and financiers of Ouro Verde, and Bank of America as financial advisor for Localiza. and the United.
While they do not receive approval for this step towards the merger, Localiza and Unidas will continue to operate independently. Localiza’s shares, valued at R$38.9 billion, have depreciated by 2.3% in 2022. Unidas’ shares, valued at R$11.7 billion, are down 1.5% in the year.