VIA VAREJO S.A. Publicly-Held Company with Authorized Capital CNPJ/MF nº / NIRE NOTICE OF MATERIAL FACT

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1 VIA VAREJO S.A. Publicly-Held Company with Authorized Capital CNPJ/MF nº / NIRE NOTICE OF MATERIAL FACT Via Varejo S.A. ( Via Varejo or Company ), in compliance with the provisions of Article 157, Paragraph Four, of Law No. 6,404/1976, and of CVM Rule No. 358/2002, and in addition to the Notice of Material Fact released on May 11, 2016, hereby informs its shareholders and the market the following: Favorable Recommendation by the Special Committee Following the analysis and negotiation of the reorganization project for the integration of the e-commerce business operated by Cnova Comércio Eletrônico S.A. ( Cnova Brazil ), a Brazilian subsidiary of Cnova N.V. ( Cnova NV ), to the Company s business ( Reorganization ), the Via Varejo Special Committee, created on May 11, 2016 ( Via Varejo Special Committee ), submitted its considerations and conclusions to the Company s Board of Directors. The Via Varejo Special Committee was assisted by financial and legal external independent advisors during the negotiation and analysis of the project, and submitted its unanimous recommendation in favor of the implementation of the Reorganization to the Board of Directors, considering, in brief, (i) the industrial and strategic merits of the Reorganization, (ii) the value creation potential for the Company and its shareholders arising from the simplification of the governance structure and of the existing commercial relations, and (iii) the exploitation of synergies between both companies, resulting from the integration of the e-commerce activities to the brick and mortar retail. The Reorganization will allow for the creation of an integrated online and brick and mortar platform, leader in the electro-electronics market Brazil, which will provide Via Varejo with greater competitiveness and better strategic positioning in the long term. The Company s Executive Management s preliminary analyses indicated potential recurring synergies in the total estimated amount of approximately R$ 245 million 1, 1 Annual value, assuming total ramp-up after implementation.

2 arising mainly from logistics, commercial practices, administrative and personnel expenses and reduction of financial costs. Furthermore, the Executive Management expects that a non-recurring gain shall be obtained in the amount of approximately R$ 325 million, as a result of the optimization and rationalization of Via Varejo s and Cnova Brazil s combined stocks following the Reorganization. The conclusion of the Reorganization will allow the Company s clients to have a better purchase experience, supported by the advantages arising from the multichannel platform and unified commercial management. Boards of Directors Meetings and Convening of Shareholders Meetings In light of Via Varejo Special Committee s favorable recommendation, the Company s Board of Directors resolved, at a meeting held on this date, to approve (i) the execution of a reorganization agreement with Cnova Brazil and Cnova NV, which sets forth the terms and conditions for the implementation of the Reorganization ( Reorganization Agreement ), as well as (ii) the convening of an extraordinary general shareholders meeting ( Via Varejo EGM ) in order to submit the Reorganization to the approval of the Company s minority shareholders, holders of common and preferred shares. The Via Varejo EGM s call notice and the respective management proposal, containing all necessary information for the shareholders to take an informed decision, shall be published by the Company in due course. Companhia Brasileira de Distribuição ( CBD ) reiterated that it will not exercise its voting rights in the resolution concerning the Reorganization at the Via Varejo EGM, in order to maximize the independence of the approval process of the Reorganization, therefore granting to the minority shareholders of Via Varejo, holders of common and preferred shares, the power to decide on its implementation. Additionally, in view of Via Varejo Special Committee s unanimous recommendation in favor of the approval of the Reorganization, as disclosed in the Notice of Material Fact released on of May 11, 2016, the CB Group (consisting of Mr. Michael Klein and the companies EK VV Limited, Bahia VV RK Limited, Bahia VV NK Limited, Altara RK Investments Limited, Altara NK Investments Limited and Twinsk Fundo de Investimento Multimercado Crédito Privado - Investimento no Exterior), owner of 117,512,135 common shares and 235,024,264 preferred shares issued by the Company, pursuant to the Previous Meeting of the Company s shareholders agreement then in effect, undertook to vote in favor of the Reorganization at the Via Varejo EGM. Furthermore, on the date hereof, Cnova NV s Board of Directors approved the Reorganization Agreement. All steps of the Reorganization are conditioned to its approval (i) by Via Varejo s minority shareholders, holders of common and preferred

3 shares, at the Via Varejo EGM; and (ii) by Cnova NV s shareholders, at the shareholders meeting of Cnova NV which resolves on the Reorganization ( Cnova NV EGM ), which is expected to occur during the fourth quarter of Reorganization Agreement The Reorganization Agreement is the product of the negotiations between the Via Varejo Special Committee and the special committee created in Cnova NV in order to analyze and negotiate the terms of the Reorganization ( Cnova NV Transaction Committee ) and sets forth the financial and economic terms and conditions of the Reorganization. As anticipated in the Notice of Material Fact released by the Company on May 11, 2016, the Reorganization, if approved by the shareholders at the Via Varejo EGM and the Cnova NV EGM, shall be implemented in such a way as not to cause any dilution to Via Varejo s shareholders, through the transfer to a wholly-owned subsidiary of Via Varejo ( HoldCo ) of the total indirect stake held by Via Varejo in Cnova NV (corresponding to approximately 22% of Cnova NV s capital stock) and an amount of approximately R$ 16.5 million (subject to adjustment), following which Holdco shall be merged into Cnova Brazil ( First Merger ). The share exchange ratio for the First Merger shall derive from the equity value agreed for Cnova NV of R$ 7.23 billion and for Cnova Brazil of R$ 1.6 billion, as adjusted pursuant to the Reorganization Agreement. This exchange ratio was negotiated between the Via Varejo Special Committee and the Cnova NV Transaction Committee, already taking into account the effects of the internal investigation in Cnova Brazil, the results of which were disclosed as per the Notice of Material Fact released on July 26, Immediately thereafter, in order to eliminate the cross shareholding between Cnova Brazil and Cnova NV resulting from the First Merger, Cnova Brazil will receive part of its own shares held by Cnova NV via a capital devolution transaction and the remaining part will be repurchased by Cnova Brazil, so that the capital stock of Cnova Brazil becomes exclusively held by Via Varejo. As per the terms and conditions of the existing loan agreements between Cnova Brazil and Cnova NV (valued at approximately US$ 156 million as of end of July 2016), such event shall trigger the obligation of early repayment of these loans, which shall be then repaid to Cnova NV by Via Varejo. Then, and as soon as the State of Rio de Janeiro grants the authorization for the transfer of the Cnova Brazil s differentiated tax regime to Via Varejo, Via Varejo shall convene another extraordinary general shareholders meeting to resolve on the merger of Cnova Brazil, thus concluding the Reorganization ( Second Merger ). Tender offer by Casino for the acquisition of Cnova NV shares

4 As informed in the Notice of Material Fact released by the Company on May 11, 2016, in compliance with the condition imposed by the Cnova NV Transaction Committee, Casino Guichard-Perrachon ( Casino ) undertook to launch a tender offer for the acquisition of the shares held by Cnova NV s minority shareholders ( Tender Offer ), offering US$ 5.50 per common share issued by Cnova NV, subject to (i) the Reorganization being approved and completed and (ii) provided that CBD assumes a firm commitment not to sell its Cnova NV shares in the Tender Offer. In this respect, as disclosed in the Notice of Material Fact released by CBD also on this date, its Board of Directors resolved, on the date hereof, in line with the recommendation of its special committee ( CBD Special Committee ), to approve (i) the vote in favor of the Reorganization that CBD shall cast at the Cnova NV EGM; and (ii) that CBD will not sell the shares issued by Cnova NV it holds in the Tender Offer. Therefore, in case the Reorganization is approved at the Via Varejo EGM and at the Cnova NV EGM and is completed, Casino shall launch the Tender Offer for the acquisition of the shares issued by Cnova NV held exclusively by Cnova NV s minority shareholders. Via Varejo shall no longer hold any Cnova NV shares by the time the Tender Offer is launched. New Operational Agreement Additionally, Via Varejo s and CBD s Boards of Directors approved, in accordance with the Via Varejo Special Committee s and the Cnova NV Transaction Committee s recommendations, the execution of a new operational agreement between CBD and Via Varejo which establishes the terms and conditions for the commercial and strategic alignment of their retail and e-commerce activities, especially regarding the joint acquisitions of common products and the e commerce activities under the brand Extra, which shall come into effect as of the implementation of the Reorganization ( New Operational Agreement ). The Company will take all necessary measures for the implementation of the resolutions approved by the Board of Directors and will duly inform its shareholders and the market of any subsequent material facts concerning the Reorganization. The Via Varejo Special Committee opinion and its financial advisor s report, as well as the minutes of the Company s Board of Directors meeting and the Reorganization Agreement are available as of this date for consultation by Via Varejo s shareholders at its headquarters and its website ( as well as at the websites of the Brazilian Securities Commission ( and of BM&FBovespa S.A. Bolsa de Valores, Mercadorias e Futuros ( São Caetano do Sul, August 8, 2016.

5 Alexandre Gonçalves Investor Relations Officer