Leading international law firm Freshfields Bruckhaus Deringer has advised Ultrapar, one of Brazil's largest companies, on forming an association with Extrafarma, one of Brazil’s largest drug store chains.

Extrafarma operates 186 drug stores in the North and North East of Brazil and the transaction is expected to accelerate its expansion by allowing drugstore openings in Ipiranga service stations and Ultragaz resellers (both divisions of Ultrapar).

The transaction, announced on 30 September, values Extrafarma at over R$1bn (£277m) and is to be implemented via a share-for-share exchange with up to 2.9% of Ultrapar’s shares being issued as a consideration for the acquisition, a transaction structure that is rare in Brazilian M&A. Completion is conditional on regulatory and shareholder approvals.

London corporate partners David Sonter and Graham Watson provided strategic legal and structuring advice to Ultrapar alongside Brazilian law firm Mattos Filho.