Magazine Luiza Jumps 16.88% as Azzas Splits Back Into Arezzo and Soma

Brazil · Markets

Two Brazilian retailers moved hard on the same day for unrelated reasons. Magazine Luiza signed a deal with Mercado Livre, and Azzas 2154 announced it is undoing its own merger.

Magazine Luiza shares jumped 16.88% on 2 September after a marketplace deal with Mercado Livre. The same session, Azzas 2154 rose about 11% on news it is splitting in two.

Magazine Luiza and the Mercado Livre Deal

Magazine Luiza shares closed up 16.88% at R$5.40 (US$1.05) on 2 September 2026. Brazil’s B3 exchange was shut on Monday 7 September for Independence Day.

The move followed a marketplace agreement with Mercado Livre. Magazine Luiza will list about 27,000 of its own products there, along with its KaBuM! and Época Cosméticos brands.

What Magazine Luiza Is

Magazine Luiza, known as Magalu, is one of Brazil’s largest retailers. It sells through shops and a big online marketplace.

Mercado Livre is the region’s largest online marketplace. The deal puts a rival’s inventory on its shelves rather than pulling shoppers away.

The Bank of America Upgrade

Bank of America lifted Magazine Luiza two notches on 3 September, from sell to buy. It raised its price target to R$8 (US$1.56) from R$5 (US$0.98).

The bank framed the change around the retailer moving away from a broad and costly marketplace model. It pointed instead to narrower, more efficient partnerships.

Azzas Is Undoing Its Own Merger

Azzas 2154 shares rose about 11% to R$16.77 (US$3.27) on the same day. The company said it will separate into two listed businesses.

Azzas was created by the 2023 and 2024 merger of Arezzo&Co and Grupo Soma. The split reverses that, recreating both as independent companies.

How the Split Would Work

Arezzo&Co would be led by Alexandre Birman and Grupo Soma by Roberto Jatahy. The Farm Rio brand would be held jointly, with Arezzo on 57.4% and Soma on 42.6%.

Completion is targeted for the first quarter of 2027. It needs clearance from CADE, Brazil’s competition regulator.

The Ratings Response

S&P Global cut Azzas’ national-scale rating to brAA from brAA+. It also placed the rating on negative watch.

A national-scale rating compares a company only with other borrowers in the same country. Negative watch means a further cut is under active review.

Why the Two Stories Get Confused

Both moves landed in the same session and both companies sell to Brazilian consumers. Neither has anything to do with the other.

Magazine Luiza rose on a distribution deal. Azzas rose because investors welcomed the break-up of a merger that had not delivered.

Frequently Asked Questions

Why did Magazine Luiza shares jump?

It agreed a marketplace deal with Mercado Livre covering about 27,000 of its own products. The shares closed up 16.88% on 2 September.

Did Azzas call off a merger?

No, the opposite. It announced it will undo the Arezzo&Co and Grupo Soma merger and list the two companies separately.

What did S&P do?

It cut Azzas’ national-scale rating to brAA from brAA+ and placed it on negative watch, citing the split.

When does the split happen?

The company is targeting the first quarter of 2027. It still needs approval from the competition regulator CADE.

Sources: InfoMoney; Exame; Money Times; Seu Dinheiro; Central do Varejo.

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