Purchase of brMalls by Aliansce should create the largest shopping mall network in Brazil

​After a series of ups and downs, the purchase of shopping center manager brMalls by competitor Aliansce Sonae is about to be completed. If completed, the deal will create the largest network of malls in Brazil, valued at around R$ 13.4 billion.

In a meeting this Thursday (28), the board of directors of brMalls approved the execution of a business combination agreement between the company and Aliansce. The deal provides for the shares of brMalls to be merged into Aliansce.

Among the shopping centers managed by brMalls are the malls Metrô Santa Cruz, Jardim Sul and Mooca Plaza Shopping, in São Paulo. Among those managed by Aliansce are Parque D. Pedro and Plaza Sul.

“The board of directors, by majority, approved the signing of the protocol [de incorporação] and recommends to its shareholders the approval of the operation”, says the statement released by brMalls this Friday (29).

The document says that the deal will still be submitted for approval by brMalls shareholders at a general meeting to be convened in the coming days.

“Regarding the merits of the operation, the management of brMalls understands that the business combination will provide a new company with commercial leadership, gains in scale, capture of synergies and greater investment capacity”, says brMalls.

The economic terms of the transaction reflect those contained in the third business combination proposal with brMalls, submitted by Aliansce on April 18th.

After having two previous offers rejected, Aliansce last month made public a third business combination proposal, which it called a “more favorable exchange ratio for brMalls shareholders”.

Under the proposal, brMalls shareholders were offered a cash payment in the amount of R$1.25 billion, corresponding to R$1.50 per brMalls common share, in addition to a payment with the delivery of 326.3 million shares of Aliansce, representing 55.13% of the combined company’s share capital.

According to brMalls, these conditions represent an increase of about 17.2% compared to the original proposal presented by Aliansce on January 4, considering the closing price this Thursday.

“Aliansce Sonae is convinced that the business combination represents an excellent opportunity to create value, which will result in significant gains for the shareholders of both companies and, in particular, which will further enable the transformation of the retail and shopping malls, through the strengthening of the combined company”, says Aliansce.

The company adds that the deal will allow for more robust investments to keep the companies’ assets up to date and the development of business strategy in a “phygital” environment, a combination of physical and digital environments.

According to Rodrigo Crespi, an analyst at Guide Investimentos, the closing of the agreement can create positive synergies for both companies and will create a significant gain in scale between the malls managed by both. “However, in our view, the acceptance was already expected and is already incorporated in the value of the shares”, says the analyst.

The analysis team of Ativa Investimentos highlights that, due to the size of the new company, its bargaining power with suppliers will be much greater, which should reduce condominium costs and, consequently, attract more tenants.

“[Em teleconferência nesta sexta] both directors mentioned the intention for the combined company to remain on the Novo Mercado, the Stock Exchange’s highest governance level. In terms of the composition of the board, the intention is for the board to be composed of nine members: two appointed by brMalls, four by Aliansce Sonae and three independent”, say analysts at Goldman Sachs.

brMalls shares closed the session up 0.96%, while Aliansce retreated 0.14%.

X-ray

brMalls
Start of operations: 1949
Net income in 2021: BRL 276.1 million
Malls: Jardim Sul, Mooca Plaza Shopping, Shopping Metrô Santa Cruz (SP); Center Shopping Uberlândia, Independência Shopping, Shopping Del Rey (MG); Catuaí Shopping, Shopping Curitiba (PR)

Aliansce Sonae
Start of operations: 2019 (merger between Aliansce Shopping Centers and Sonae Sierra Brasil)
Net income in 2021: BRL 274.8 million
Malls: Parque D. Pedro Shopping, Plaza Sul Shopping, Santana Parque Shopping, Shopping Campo Limpo (SP); Bangu Shopping, Boulevard Shopping Campos, Carioca Shopping, Caxias Shopping (RJ); Boulevard Shopping Belém, Parque Shopping Belém (PA)

with Reuters