Category: M&A

Mexican operator Telmex has agreed to buy another two Colombian cable TV companies: TV Cable and Cable Pacífico. The acquisitions will add a further 195,000 subscribers in Bogota, Cali and Medellin. In September the Mexican operator paid over $30 million for Colombian cable operator Superview, which brought with it 125,000 subscribers.

Axtel, the Mexican telecom, is out with a $518 million financing for its acquisition of Avantel through Citigroup and Credit Suisse. A $208 million five-year term loan to refinance Avantel debt and a $310 million 18-month bridge are out to MLAs and the transaction should close early in 2007. The acquisition is slated to close this year. Citigroup is the indirect controlling shareholder in Avantel and is taking up to a 10% equity stake in Axtel.

Colombia’s Davivienda is out with a $250 million three-year acquisition facility through Credit Suisse, JPMorgan and Wachovia. The margin is 87.5bp in year one, 100bp in year two and 112.5bp in year three. Davivienda is buying Granbanco for around $900 million. Amortizations start in month 24.

Brazilian steelmaker Gerdau, via its Spanish subsidiary Sidenor, is to buy Spain’s GSB for $143 million from CIE Automotive. The acquisition is expected to close by year end. The move to buy GSB comes hot on the heels of an equity increase last week by Gerdau in Peru’s Empresa Siderúrgica del Perú (Siderperú). The Brazilian firm spent $40.5 million to buy a further 32.85% share and take control of 83.27% of Peru’s largest steelmaker. Earlier this year, Gerdau handed over $103 million for Sheffield Steel Corp of the US.

Brazilian steel producer CSN has jumped on the Latin M&A bandwagon with an $8 billion cash offer for British steel group Corus, trumping a bid made last month by India’s Tata Steel. The cash offer of 475 pence per ordinary share will be covered by existing resources and new debt facilities underwritten by Barclays, Goldman Sachs Credit Partners and BNP Paribas, CSN said. Otavio de Garcia Lazcano, CSN’s chief financial officer, said a large part of the financing would have no recourse to CSN. Lazard is lead financial adviser to CSN, while Goldman Sachs is financial adviser and joint broker, and UBS is joint broker. The combined CSN-Corus would create a top five global steel producer, according to the Brazilian acquirer. CSN indirectly owns 34 million Corus ordinary shares or 3.8% of the issued ordinary share capital of Corus. The CSN announcement follows a $12 billion Cemex bid for Rinker and CVRD’s $18 billion acquisition of Inco. M&A bankers say there is more to come in the short term from Latin America and predict a bumper 2007.

Mexico’s largest locally owned bank, Banorte, said it will buy the remaining 30% in Inter National, after it closed its acquisition of the US bank, Thursday, following the approval by both Mexican and US banking regulators. Banorte said it would pay somewhere between $111 million and $191 million for the equity interest. Banorte became the first Mexican financial entity in recent decades to buy a US bank, when it agreed to pay $259 million for a 70% stake in the Texas bank at the end of January this year. Banorte has an option to buy the remaining 30% stake over the next five years. Inter National will become part of a new division of Banorte, entitled Banorte USA.

Mexico’s competition commission rejected, for the second time, the merger of two railroads owned by Grupo Mexico, the country’s largest copper producer. Kansas City Southern Industries, which owns the third of the country’s main railroad networks, had complained the merger would hurt competition as it would have given a 54% market share to the merged operators. Grupo Mexico bought Ferrosur, which operates mainly in the south, from magnate Carlos Slim, to merge it with its Ferromex operations in northern Mexico. The Commission first rejected the merger in June.

Mexican telco Telmex completed its tender offer to buy up the remaining shares in Brazilian operator Embratel and succeeded in acquiring 96.4% of all the company’s capital stock. The acquisition is sufficient for Telmex to close the capital of the Brazilian long-distance operator, following approval from the regulator Anatel. For the next three months, through February 2007, any remaining shareholders can sell their shares to Telmex at the voluntary tender offer price, adjusted by the monthly Brazilian benchmark rate (TR).

The latest in a series of multi-billion dollar Latin American acquisition loans – a $12.8 billion Cemex deal to buy Rinker — is taking its time to come to market. Bankers are keeping details of the bridge financing to fund the unsolicited Cemex takeover of the Australian cement-maker under tight wraps. A banker close to the deal says no date has been set for a bank meeting and the company is still in talks with lead banks as to the structure of the facilities. The Mexican company has secured commitments from BBVA, Citigroup, JP Morgan and Royal Bank of Scotland Group. It is thought that a large part of the financing will be done through Cemex’s Spanish subsidiary, Cemex España. Citigroup Global Markets and JP Morgan Chase are advising Cemex, while Rinker has appointed UBS. Rinker’s chairman, John Morschel, said Monday that Cemex’s offer was “opportunistic and materially undervalues the company”. Juan Pablo San Agustin, Cemex’s senior vice president of corporate strategic planning, who was in Sydney meeting with investors on Tuesday, described Cemex’s offer as “compelling, attractive and fully valued,”. He declined to say whether the bid was final. The takeover, if approved, will be the largest by a Mexican company as well as the largest ever in the building materials sector. It would create the world’s largest building materials company with revenues of $23.2 billion and more than 67,000 employees in over 50 countries, according to Cemex.

Chilean electricity company Nueva Transelec is planning to issue up to $665 million of local bonds to refinance existing debt due next March as well as refinancing acquisition debt held at the holding company. The debt will be issued as local inflation-adjusted bonds, denominated in UF, in two series: one with 10-year maturity and one maturing in 25 years. Citigroup Chile and Scotiabank Sud Americano Corredores de Bolsa will arrange the issue. The bonds have been assigned an A(chl), outlook stable, national scale rating from Fitch.