Brazilian Developers Scrap Merger

Brazilian developer Cyrela has canceled an agreement to buy competitor Agra Empreendimentos Imobiliarios for about BRL1.54bn, the companies say. The two cite an “incompatibility of the companies’ commitments with their respective partners regarding the exclusivity of operations with those partners in certain regions of the country,” as the reason for halting the deal that was announced in June. Instead, the two developers have entered into a new accord, in which Cyrela will buy certain Agra development projects totaling BRL120m. In a research report, Itau finds that the news is negative for both companies, particularly Agra, whose valuation was sustained by the possibility of the deal.