Brazilian rental car company Localiza to take over rival Unidas

Noble Horvath

SAO PAULO, Sept 23 (Reuters) – Brazilian rental car firm Localiza RENT3.SA has agreed to take over rival Unidas LCAM3.SA, both companies said on Wednesday, as the industry finds ways to cope with the coronavirus pandemic. Car companies have seen demand slump during the crisis, leading Hertz Global Holdings HTZ.N […]

SAO PAULO, Sept 23 (Reuters)Brazilian rental car firm Localiza RENT3.SA has agreed to take over rival Unidas LCAM3.SA, both companies said on Wednesday, as the industry finds ways to cope with the coronavirus pandemic.

Car companies have seen demand slump during the crisis, leading Hertz Global Holdings HTZ.N to file in May for bankruptcy protection in the United States.

Localiza will hold a 76.85% stake in the combined company, while Unidas will hold the remaining part.

Unidas’ shareholders will also be granted a 425 million reais ($77.68 million) dividend 90 days after the deal close.

Localiza is also proposing to extend Unidas’ shareholder a loan which will have Localiza’s shares as collateral.

Both Localiza and Unidas said the deal aims at creating a global player, besides increasing efficiency. The firms added they plan to reach a deal with rental car firm Enterprise Holdings to extend its current mutual referral agreement with Unidas to Localiza.

After the deal, Localiza’s founders will appoint six board members, while Unidas will name two.

($1 = 5.4714 reais)

(Reporting by Carolina Mandl, editing by Louise Heavens)

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