Azzas 2154 seals agreement to separate Arezzo&Co and Soma

Following refuted speculation about disagreements between partners Alexandre Birman and Roberto Jatahy, the Brazilian conglomerate Azzas 2154 Group announced an agreement for a corporate reorganisation on September 2. The official statement confirms the separation of both companies.

“The Reorganisation aims to segregate the current businesses of Azzas 2154 into two independent public companies listed on the Novo Mercado of B3 S.A. – Brasil, Bolsa, Balcão, with their own management and governance structures (“Arezzo&Co” and “Soma”). Arezzo&Co will be led by the Birman Block and Soma will be led by the Jatahy Block. The Reorganisation will also result in the creation of a company that will bring together the Farm brand and its extensions, including Farm Brasil, Farm Internacional and Fábula. Its shares will be held by Arezzo&Co and Soma, in the proportion of 57.4 and 42.6 percent, respectively, with its own management and governance. Arezzo&Co and Soma will continue the ongoing process of evaluating strategic alternatives for Farm Rio, as already disclosed to the market,” the statement said.

The reorganisation, which will be carried out in two stages, plans to begin with a redistribution of brands and operations. In a second stage, there will be an exchange of shares between both blocks.

“Arezzo&Co will consolidate the Shoes & Bags brands and operations, including Arezzo; Schutz; Anacapri; Vans; Alexandre Birman; Carol Bassi; as well as Hering and its extensions. In addition to these operations, Arezzo&Co will hold 57.4 percent of Farm Rio. Soma will consolidate the brands and operations of Animale; NV; Maria Filó; Cris Barros; Reserva and its extensions; Oficina; Foxton; as well as a 42.6 percent stake in Farm Rio.

With the implementation of the demerger, each Azzas 2154 shareholder will become a holder of shares issued by both companies (i.e., Arezzo&Co and Soma) in the exact proportion of the stakes they hold in the Company's share capital, so that the relative participation of each shareholder is fully preserved,” the report added.

Ultimately, the Birman Block will hold 32.13 percent of Arezzo&Co's shares and 6.18 percent of Soma's. The Jatahy Block will have 25.95 percent of Soma, and the remaining shareholders will hold 67.87 percent of each company.

This development marks a new direction for what was the country's largest fashion group, with both Birman and Jatahy set to continue their journeys independently.