Photographer: Dado Galdieri/Bloomberg

Two of Brazil's Richest Families Start Talks Over $70 Flip-Flops

  • Confidentiality agreement signed by Salles-controlled Cambuhy
  • Batista family’s J&F is selling assets after leniency deal

The maker of Havaianas, the colorful Brazilian flip-flops donned by celebrities, is poised to pass from one of Brazil’s most-powerful families to another thanks to the country’s latest political turmoil.

Cambuhy Investimentos Ltda, the private-equity firm backed by the Moreira Salles family, is in talks to buy the trendy sandal maker officially known as Alpargatas SA from J&F Investimentos, according to a filing Monday, which didn’t provide further details on the negotiations. J&F is controlled by the Batistas, the family that’s become the center of a national political crisis after confessing to bribing government officials.

Swarovski Crystal Havaianas

Source: Saks Fifth Avenue

Cambuhy signed a confidentially agreement on June 23 with J&F for a possible acquisition of Alpargatas, the sandal maker said in the filing. The move comes less than two weeks after J&F said it was in talks to sell pulpmaker Eldorado Brasil Celulose SA to Chile’s Celulosa Arauco y Constitucion SA, which made an offer of about 14 billion reais ($4 billion) including debt, according to a person with direct knowledge of the matter.

J&F is selling assets as it tries to survive the major political scandal. It agreed last month to pay 10.3 billion reais as part of a settlement with Brazilian authorities after Wesley and Joesley Batista, the brothers who run meat producer JBS SA, confessed to graft and other crimes. J&F plans to raise at least 8 billion reais through divestments that also include dairy company Vigor Alimentos SA, S&P Global Ratings said in a report earlier this month.

Alpargatas rose as much a 5.1 percent Monday to 13.30 reais, the highest intraday level since May 3.

Maker of $70 Flip-Flops Suddenly a Steal Amid Brazil Crisis

The Batista brothers agreed to buy control of Alpargatas in late 2015 using a 2.67 billion-real loan from government-owned Caixa Economica Federal in a deal that’s being investigated by the country’s audit court.

Cambuhy was established in 2011 by the billionaire co-chairman of Itau Unibanco Holding SA, Pedro Moreira Salles, who has a 31 percent stake in the private-equity firm. The Moreira Salles clan, with a combined fortune of about $19.6 billion, is one of the families that controls Itau, Latin America’s largest bank by market value.

Buying Havaianas would give the Moreira Salles family a brand worn by the likes of Kim Kardashian and Gwyneth Paltrow. The footwear sits atop the global flip-flop hierarchy, with a Swarovski-encrusted pair retailing for $70 at Saks Fifth Avenue.

— With assistance by Felipe Marques

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