Alpargatas : Material Fact

MATERIAL FACT

Alpargatas S.A. ("Alpargatas" or "Company"), pursuant to the provisions of CVM Instruction No. 358/02, hereby announces to its Shareholders and to the market in general that, on July 12, 2017, its controlling shareholder, J&F Investimentos S.A. ("J&F Investimentos") sent a notice to the Company announcing that J&F Investimentos and ITAÚSA - INVESTIMENTOS ITAÚ S.A. ("ITAÚSA"), CAMBUHY INVESTIMENTOS LTDA. ("Cambuhy") and BRASIL WARRANT ADMINISTRAÇÃO DE BENS E EMPRESAS S.A. ("BW" and, together with ITAÚSA and

Cambuhy, "Buyers") signed an Agreement of Purchase and Sale of Shares and Other Covenants ("Agreement") to acquire the shareholding control of Alpargatas by the Buyers ("Transaction"), under the terms below:

1. Buyers: ITAÚSA - INVESTIMENTOS ITAÚ S.A., a publicly-held company duly organized and validly existing under the Brazilian laws, with headquarters at Praça Alfredo Egydio de Souza Aranha, 100, Olavo Setubal Building, in the City of São Paulo, State of São Paulo, enrolled under the Corporate Taxpayer's ID (CNPJ/MF) No. 61.532.644/0001-15; CAMBUHY INVESTIMENTOS LTDA., a limited liability company with headquarters in the City of São Paulo, State of São Paulo, at Rua Amauri, 255, 6th floor, enrolled under the Corporate Taxpayer's ID (CNPJ/MF) No. 14.127.491/0001-40; and BRASIL WARRANT ADMINISTRAÇÃO DE BENS E EMPRESAS S.A., a company with headquarters in the City of São Paulo, State of São Paulo, at Avenida Brigadeiro Faria Lima, 4440, 16th floor, enrolled under the Corporate Taxpayer's ID (CNPJ/MF) 33.744.277/0001-88.
2. Seller: J&F INVESTIMENTOS S.A., a publicly-held company, with headquarters at Avenida Marginal Direita do Tietê, 500, bloco I, 1st floor - A, Vila Jaguara, in the City of São Paulo, State of São Paulo, enrolled under the Corporate Taxpayer's ID (CNPJ/MF) No. 00.350.763/0001-62.
3. Purchase Price: R$3,500,000,000.00 (three billion, five hundred million reais), of which R$14.25 (fourteen reais and twenty-five cents) is the price per common shares and R$11.40 (eleven reais and forty cents) the price per preferred share, sold by J&F Investimentos. MATERIAL FACT

   The payment method of the price will be in cash, in national currency, at the closing date. The closing of the Transaction is subject to the preceding condition of obtaining the prior approval of the Administrative Council for Economic Defense (CADE) and any other competent antitrust authorities, as well as the resolution conditions to (i) launch a Public Offer for the Acquisition of Shares by the Buyers pursuant to the provisions of Article 254-A of Law 6404/76; and (ii) corporate approvals of the seller.

4. Purpose of the Purchase by the Buyers: The Buyers stated that the purpose of the Transaction is to diversify their invested business portfolios.
5. Shares Purchased: Two hundred and seven million, two hundred and forty-six thousand, sixty-nine (207,246,069) common shares and forty-seven million, nine hundred and thirty-seven thousand, forty-three (47,937,043) preferred shares issued by Alpargatas, representing on this date: 85.78% of the voting capital; 20.95% of the preferred shares issued by the Company and 54.24% of the total share capital of Alpargatas. The Transaction involves the purchase of all shares issued by Alpargatas and held by J&F Investimentos.
6. Other Relevant Information: J&F Investimentos counted on the exclusive financial advice of Bradesco BBI and legal advice of Bichara Advogados in the Transaction.

São Paulo, July 12, 2017.

Fabio Leite de Souza

CFO, Investor Relations and Strategy Officer