Billionaire Camargo Clan Sells Maker of Havaianas

  • JBS controller J&F to pay $718 million in cash for Alpargatas
  • Camargo is selling assets after builder’s antitrust fine

Camargo Correa SA, the holding company of the billionaire Camargo sisters, said it is selling the maker of Havaianas flip-flops to J&F Investimentos SA for 2.7 billion reais ($718 million).

J&F, a holding company that controls the world’s largest meat exporter JBS SA, will acquire control of Alpargatas SA, the publicly-traded company that includes Havaianas among its brands, according to a regulatory filing Monday. 

The sale comes three weeks after Alpargatas sold its Topper and Rainha brands in Brazil to a group of investors led by magnate Carlos Wizard Martins. Camargo, one of Brazil’s biggest privately-held conglomerates, is selling off assets as it pays fines related to the country’s largest-ever corruption investigation that has engulfed state-run oil company Petroleo Brasileiro SA. Camargo’s construction unit agreed this year to pay a record 104 million reais in a settlement with Brazil’s antitrust regulator, and reached a leniency agreement with prosecutors to pay back 700 million reais to public coffers.

"The paralysis created by all the investigations plus paralysis created by the fiscal crisis has changed the scenario completely for construction conglomerates, so they have to consolidate to get cash," Pedro Tuesta, an economist at 4cast Ltd., said by phone from Washington. "We’ll see more consolidation in that sector because Petrobras isn’t going to do much for a long time because of oil prices, and the government isn’t doing much in public works."

The industrial conglomerate is controlled by three Camargo heiresses, Regina, Renata and Rosana, who together own a fortune worth more than $5 billion, according to the Bloomberg Billionaires Index. The group founded in 1939 now has operations in 22 countries, more than 50,000 employees and 26 billion reais in net revenue, according to its 2014 annual report. Most of the company’s net revenue comes from construction and cement sectors. The Camargos also own stakes in publicly-traded toll-road operator CCR SA and power company CPFL Energia SA.

The five Batista siblings -- Joesley, Wesley, Valere, Vanessa and Vivianne Batista -- have an equal interest in J&F, through which they and other family members control JBS, as well as investments in banking, pulp, cattle, cleaning products and construction. JBS is flush with cash as the plunge in Brazil’s currency helps boost revenue for the company, which generates more than 80 percent of its sales in dollars.

"Our accumulated experience in global operations and development of strong brands will further drive Alpargatas along the path consolidated by Camargo Correa until now," J&F president Joesley Batista said in an e-mailed statement from the company.

The deal with J&F values Alpargatas’ stock at 12.85 reais each, according to the statement sent by Alpargatas to Brazil’s securities regulator. That’s compared to a closing price of 9.79 reais before the announcement. The company’s preferred shares dropped 7.9 percent today to 8.95 reais at market close in Sao Paulo. 

Camargo Correa was advised by Bradesco BBI and Goldman Sachs in the operation. The acquisition includes 161.8 million common shares and 45.7 million preferred shares, representing 44 percent of the company’s stock.

— With assistance by Fabiola Moura

(Corrects amount of settlement in third paragraph of story originally published November 23.)
    Before it's here, it's on the Bloomberg Terminal.