Pinheiro Neto Advogados and Machado Meyer Advogados have helped Brazil's Localiza Rent A Car and local counterpart Companhia de Locações das Américas (Unidas), respectively, in their 55 billion reais (US$10 billion) merger.Localiza is set to pay 12 billion reais (US$2 billion) to take over Unidas' operations, followed by an all-stock merger. Unidas' stakeholders will be able to trade each common stock unit in the company for 0.45 of a common share in Localiza. The market value of the combined entity is close to US$10 billion.The parties signed the deal on 23 September.Once the all-stock merger is complete, Localiza will hold a 77% stake in the new entity, with Unidas holding onto the remainder. The deal is subject to approval from Brazil's antitrust authority, CADE, and is expected to close in 2021.CADE's review of the deal is likely to be thorough, given the two companies' substantial joint share of the car rental market. Localiza's operations currently represent some 33% of Brazil's market, while Unidas' assets account for 17%. Together they will have a combined fleet of around 470,000 vehicles.The deal was signed despite a global recession incited by the covid-19 pandemic, during which car rental demand has soared in Brazil, as unemployed people have taken on roles in the gig economy, such as Uber drivers, to get alternative sources of income.Localiza is among the largest car rental companies in Latin America. It has 584 branches of car rental facilities in Brazil, with another 70 across several other countries in the region, including Argentina, Chile and Uruguay. The company is also Brazil's largest car buyer.The company ended its partnership with Hertz last month after the US counterpart filed for bankruptcy.Unidas has some 90,000 vehicles in its fleet and has partnerships with US rental giant Enterprise and UK counterpart Alphabet.
Counsel to Localiza Rent A Car
- Pinheiro Neto Advogados: Partners Carlos Alberto Moreira Lima and Henrique Gordo Lang, and associates Carlos Eduardo Gazineu Azevedo, Cauê Rezende Myanaki, Luiz Fernando Lockmann e Souza and Frederico Menescal Rocha
Counsel to Unidas
- Machado Meyer Advogados: Partners Mauro Cesar Leschziner, Diana Pacifico Henne, Tito Amaral de Andrade, Maria Eugênia Novis, Fernando Tonanni, Bruna Marrara, Eliana Ambrósio Chimenti and Clarissa Freitas, and associate Isabela Cruz Sanchez
(Latin Lawyer - 01.10.2020)