In an important step within the Brazil’s pet retail market, Petz confirmed its merger with Cobasi, pushing its shares up as much as 29.5% today. The jump put Petz as the top performer on the Bovespa stock index, which showed little overall movement. The deal, which had been expected since the signing of the MoU in April April, was met with market skepticism, according to JPMorgan analysts, although the deal was generally viewed positively.
As a result of the merger, Beatz will act as a subsidiary of Kobasi, with Betz shareholders owning 52.6% of the new entity. The company’s shares will be publicly traded on the Novo Mercado sector of the Sao Paulo Stock Exchange, which is known for strict governance standards. In addition to equity, Betz shareholders are set to receive SAR 400 million in cash, including SAR 130 million in exceptional dividends that will be issued before the merger is completed. This cash element has been adjusted from the SAR 450 million previously announced.
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The combined company is expected to generate total annual revenues of around 7 billion riyals per year, with operations covering 494 stores in more than 140 cities. The merger is pending approval by Brazil’s antitrust authorities, which is expected to be granted in 2025. The two companies expected annual synergies to add between QR220 million and QR330 million to their core earnings (EBITDA).
The governance of the new enterprise will consist of a nine-member Board of Directors, with five appointed by Cubasi and four by Betz reference shareholder Sergio Zimmerman, who will also serve as Chairman of the Board. The founder of Cubasi, Paulo Nassar, is set to become the CEO of the combined entity. The cash conversion rate used in the transaction is based on the current exchange rate of USD 1 against SAR 5.4703.
Reuters contributed to this article.
This article was translated with the help of an artificial intelligence program after an editor’s review. For more details please refer to Banha Terms and Conditions
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