Brazil's B2W and Magazine Luiza Considering Acquisition of Netshoes

Brazilian retailers B2W and Magazine Luiza confirmed in filings on Wednesday they are considering the acquisition of online shoe retailer Netshoes Ltd, Reuters reported. The deal model is still unclear. When Netshoes hired Goldman, Sachs last year, the company was seeking an investor to inject cash so it could restructure its debt. Analysts at Banco Brasil Plural said in a note to clients on Thursday that a potential acquisition would be neutral for Magazine Luiza, as the acquisition price would not strongly affect cash flow. “Magazine Luiza could use the Netshoes opportunity to start selling clothes and shoes to compete with Amazon.com in Brazil”, analysts said. Netshoes has a market capitalization of $68 million, but as the company is highly indebted, the total cost of the deal would be higher. Read more

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