Association -- Banco Itau Holding Financeira S/A and Lojas Americanas S/A -- Disclosure of Material Fact
February 28 2005 - 10:07AM
PR Newswire (US)
Association -- Banco Itau Holding Financeira S/A and Lojas
Americanas S/A -- Disclosure of Material Fact SAO PAULO, Brazil,
Feb. 28 /PRNewswire-FirstCall/ -- 1. LOJAS AMERICANAS S.A. ("LASA")
and BANCO ITAU HOLDING FINANCEIRA S.A. ("ITAU") announce an
association for the purpose of creating a new financial
institution. ITAU, through companies controlled by it, and LASA
will constitute a new company ("New Company"), a financial
institution with operations to be duly authorized by the Brazilian
Central Bank, which will engage in the structuring and sale of
financial products and services and the like for customers of Lojas
Americanas, Americanas Express and Americanas.com on an exclusive
basis. 2. The New Company will also acquire LASA's sales promotion
company, Facilita Servicos e Propaganda S.A. ("Facilita"). 3. The
equity of the New Company will be R$ 80 million, owned 50% by ITAU
and 50% by LASA. 4. Brazilian consumer credit markets will be
strengthened by this association between two major Brazilian
groups, each of them a leader in their markets and acknowledged for
excellence of management and the value of their brand names. 5.
This association will represent an opportunity to broaden and
improve the range of financial products and services currently
available to customers of LASA (such as Private Label cards, widely
accepted co-branded credit cards, consumer credit, personal loans,
insurance, extended product warranties and more) at the following
points of sale: -- at the Lojas Americanas and Americanas Express
stores, through which over 1 million people pass each day in 19
Brazilian states plus the Federal District; -- at Americanas.com,
with approximately 110,000 products offered to its clients; -- at
Facilita sales promotion company, with a presence in all LASA
points of sale, as well as having 20 strategically located stores
of its own. 6. The New Company will be managed by a Board of
Directors, the chairman of which will be nominated by ITAU, and
which will be assisted by an Operating Support Committee, comprised
in equal parts by the two shareholders, aiming to ensure
development of the business. The Executive Board will be made up of
professionals with wide experience in the New Company's field of
activity, and its management will be the responsibility of ITAU.
The company will also have its own structure and staffing. 7. ITAU
is the bank with the highest market capitalization in Latin America
(R$ 44.1 billion on December 31, 2004). It relies on
state-of-the-art technology, the knowledge over a wide range of
sales channels and excellence in the management of its financial
activities. Its extensive knowledge of and experience in consumer
credit guarantee ITAU a highly competitive position in this market
segment. As of 12/31/2004 Amounts (R$ million) Quantities Credit
cards (*) 5,162 10.7 million Consumer finance and personal loans
6,926 8.6 million Number of active customers 11.8 million ATMs
21,150 Branches and customer-site branches 3,073 (*) Includes
values referring to the increase of the equity participation in
Credicard Banco S.A. 8. LASA has a substantial presence in the
Brazilian retail market under the "Lojas Americanas", "Americanas
Express", "Americanas.com" and "Facilita" banners. LASA's customer
relations already involve a significant number of transactions.
Consolidated Gross Revenue R$ 2.3 billion in 2003 R$ 1.9 billion in
2004 (*) Lojas Americanas -- Gross Revenue (*) R$ 1.6 billion --
Flow of Customers 1 million customers / day -- Number of Stores
(**) 158 units -- Sales Area 295 thousand m2 -- Number of
Transactions Over 110 million transactions / year -- POS Terminals
Over 3 thousand Americanas.com -- Gross Revenue (*) R$ 274 million
-- Number of Customers 3 million customers / month Facilita --
Number of Own Stores 20 units (*) Accumulated from January to
September 2004. (**) Includes 35 new stores in 2004. 9. The New
Company will manage the financial products to be offered to LASA's
customers as well as the customers of any new points of sale that
LASA may come to possess, estimated at 300 additional stores over
the next 10 years. 10. Implications for ITAU 10.1 Reinforcement in
the consumer credit segment in line with its strategy of expansion
in credit operations and focus on this particular segment; 10.2 The
operation will result in the consolidation of Taii's brand and the
broadening of its distribution network, dedicated to the consumer
credit segment; 10.3 The association will strengthen ITAU's
position in the retail finance market and enable its experience in
retail credit to help develop new forms of relationship with LASA
customers; 10.4 The association implies a total investment of
approximately R$ 240 million, including R$ 40 million of initial
equity in the New Company and goodwill of R$ 200 million to be paid
to LASA, of which R$ 100 million is in cash, with the remaining R$
100 million to be paid according to the achievement of its targets
over an up to six year period; 10.5 The results from the
association are not expected to materially affect TAU results
during the first three years of operations. 11. Implications for
LASA 11.1 The association will lead to greater circulation of
customers through LASA's stores and at Americanas.com, with a
positive impact on sales, and offers an effective strategy for
broadening range and improving conditions of financial products and
services it offers its customers. 11.2 Operating synergies offer
scope for productivity gains and a positive impact on LASA results,
not only via increased revenues but also by reducing and diluting
costs and expenses. 11.3 The association, and the incorporation of
the New Company, imply additional resources totaling R$ 200 million
for LASA, of which R$ 100 million will be a cash payment to be
received at a date to be agreed upon by the two parties, the
remaining R$100 million to be received according to achievement of
targets over a period of up to six years. Additionally, LASA will
invest R$ 40 million as its part of the equity of the New Company.
It is not possible yet to estimate the effect of the association on
LASA sales and results. 11.4 LASA's distribution network and
knowledge of its customer basis coupled with ITAU's excellence and
technology in the financial sector will result in an outstanding
opportunity for selling financial products and services. 12. ITAU
and LASA will proceed toward the signing of the final contracts
and, once signed, will proceed to obtain the necessary approvals
from the Central Bank and other pertinent authorities for
incorporation of the New Company. The association will be for an
initial period of 20 years, and may be further extended. Operations
are expected to commence in the second half of 2005. 13. For ITAU
and LASA, this association is a reaffirmation of their commitment
to the Brazilian market, with the certainty of increasing customer
satisfaction and creating shareholder value. ALFREDO EGYDIO SETUBAL
ROBERTO MARTINS DE SOUZA Investor Relations Director Investor
Relations Director BANCO ITAU HOLDING FINANCEIRA S.A. LOJAS
AMERICANAS S.A. DATASOURCE: Banco Itau Holding Financeira S.A.
CONTACT: Geraldo Soares, Banco Itau Holding Financeria, S.A.,
+011-55-11-5019-1549, or Web site: http://www.itau.com/
http://www.itau.com.br/
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