CADE clears merger between Arezzo&Co and Grupo Soma

On 26 March, the Office of the Superintendent General at CADE (SG/CADE) cleared the merger of Arezzo&Co and Grupo Soma, with the combination of their activities and shares.

Arezzo&Co is a company that manufactures and supplies footwear and bags, but it also operates in fashion and accessories markets in Brazil, the United States, and Italy. Currently, the group holds the following brands: Arezzo, Schutz, Anacapri, Alexandre Birman, Alme, Reserva, Reserva Mini, Reserva Go, Oficina Reserva, Reserva INK, Reserva Simples, Baw Clothing, Carol Bassi, Vicenza, Paris Texas, Reversa, Brizza, and Vans. Moreover, Arezzo&Co operates in the marketplace of ZZ Mall and TROC online platforms.

On the other hand, Grupo Soma is a public company operating mainly in the fashion market, but also in the footwear and accessories markets. The group runs a decor business as well. Grupo Soma operates across Brazil and abroad, holding brands such as Animale, Farm, Fábula, Foxton, Cris Barros, Maria Filó, NV, Hering, and DZARM. Furthermore, they run a marketplace from the Off Premium platform, selling in-house and third-party products.

The companies justified the transaction explaining that combining a portfolio of their complementary brands will help them be more resilient in highly competitive markets. In addition, the transaction would lead to gains in synergy in the management of sales channels, optimisation of industrial operations, and the  potential development of new business lines.

The SG estimated that together the companies’ market share in horizontal overlap markets is below 20% or have a delta HHI below 200 points. The Herfindahl-Hirschman (HHI) is an indicator used in the review of transactions to estimate the concentration level of exported and imported goods. The SG also estimates that the companies’ market share in markets vertically integrated is below 30%. Therefore, there are no competition concerns.

The decision of the Office of the Superintendent General of CADE is regarded final and the deal fully approved if the authority's Tribunal does not request the case for adjudication or a third party does not appeal to the ruling within 15 days of its announcement.