Azzas 2154 Potential Breakup Structure in Focus; Remain Neutral

Research evidence excerpt

Azzas 2154 Potential Breakup Structure in Focus; Remain Neutral

J P M O R G A N Latin America Equity Research

21 May 2026

Azzas 2154 Neutral

AZZA3.SA, AZZA3 BZ

Potential Breakup Structure in Focus; Remain Neutral Price (20 May 26):R$19.60

LatAm Retail & Healthcare

The news: Valor reported (link) that discussions around a potential corporate split Joseph Giordano AC

between Alexandre Birman and Roberto Jatahy remain active, despite escalating (55-11) 4950-3020

legal disputes. The structure reportedly under discussion could separate assets into joseph.giordano@jpmorgan.com

“mirror companies,” with Birman retaining Arezzo&Co, Hering and Farm, while Banco J.P. Morgan S.A.

Jatahy would keep the “ex-Farm” women’s fashion/lifestyle portfolio. Farm Nicolas Larrain

appears to be the key swing asset, with Birman reportedly favoring a U.S. IPO/ (55-11) 4950-3472

nicolas.larrain@jpmorgan.com

global expansion path, while Jatahy does not. Legal tensions also continue to rise Banco J.P. Morgan S.A.

around Reserva’s management structure, with injunction and arbitration Guilherme A. Vilela, CFA

proceedings reinforcing the perception that a shareholder “divorce” may be (55-11) 4950-3059

increasingly likely. guilherme.a.vilela@jpmorgan.com

Banco J.P. Morgan S.A.

Our first take: Although unconfirmed, the news reinforces the governance Giovanni Vescovi

overhang that has become central to the AZZA3 investment case. In our recent note (55-11) 4950-2901

(link), we highlighted that disputes between the key shareholder groups had giovanni.vescovi@jpmchase.com

already escalated via court injunctions, arbitration proceedings, engagement of Banco J.P. Morgan S.A.

local banks to evaluate strategic alternatives, and a CVM inquiry on disclosure Froylan Mendez

obligations.