Grupo Colombo, a men’s apparel retailer in Brazil, and Garnero Group Acquisition Company (GGAC) recently amended their merger agreement to adjust for changes in the foreign exchange rate.
Under the revised deal, GGAC will issue 4 million shares of its stock to existing Grupo Colombo’s security owners in return for 100 percent equity ownership in the retailer, which has 400 stores throughout Brazil.
Current Grupo Colombo shareholders will purchase another $30 million in GGAC stock in return for 29 percent ownership of the new combined company.
The previous merger agreement, which included a cash capital transfer from GGAC to Grupo Colombo in addition to the private placement of $100 million in GGAC shares, has been voided.
The revised merger agreement has been approved by the board of directors for both companies, but still must be approved by GGAC shareholders and various regulatory entities. The deal is expected to close in the first quarter of 2016.
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