Hungarian pharmaceutical firm Gedeon Richter is growing its footprint in Latin America with two acquisitions. The firm agreed to buy a 51% stake in Brazilian importer and distributor Next Pharma last month. It also agreed to buy 70% of Mexican firm DNA Pharmaceuticals, and to increase that to 100% over the next three years. The acquisitions are part of a diversification play into a region with one of the world’s fastest growing pharmaceutical markets, the company’s managing director said. The sale prices were not disclosed.
Category: M&A
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BBVA plans new Colombia branches amid South America push
BBVA plans to open 60 offices in Colombia this year, part of a $2.5bn South American investment push, LatinFinance understands. The bank, which has recently sold its pension businesses in Chile, Colombia, Mexico, Panama and Peru, is on a drive to boost its banking infrastructure in South America. It has earmarked $1bn to upgrade technology and $1.5bn to improve its physical infrastructure in the region, including increasing branches by 18% and doubling its online banking customers, under a 2013-2016 plan unveiled by chief operating officer Angel Cano in September. BBVA reported gross revenues in Spain of EUR4.7bn ($6.4bn) and in South America of EUR4bn over the first 9 months of 2013.
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Swiss dairy stakes Mexico claim with Mexideli acquisition
In another vote of confidence in Mexico’s dairy market, Swiss milk processor Emmi has bought half of Mexideli 2000 Holding, a cheese and specialty food importer. Mexideli generated sales of around $50m and had recorded “double-digit growth” in recent years, according to Emmi. A spokesperson at the buyer declined to disclose the sale price or the seller for the deal that was closed on December 31. The transaction follows a well-bid IPO for Mexican dairy and food producer Grupo Lala in October. The MXN14.04bn ($1.08bn) sale was the year’s largest IPO in Mexico.
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Investors launch bid for Brazil’s DASA
Two Brazilian investors have launched a bid for control of Diagnosticos da America (DASA), offering to buy at least 26.41% plus one of the outstanding stock at BRL15 ($6.3) per share. Edson de Godoy Bueno and Dulce Pugliese de Godoy Bueno own 23.59% of the Brazilian medical service provider and have opened a voluntary tender offer for the remainder of the company through investment vehicle Cromossomo Participacoes. The investor will buy as many as all 238.3m shares the pair does not own, with the deal subject to a minimum of 82.4m shares. The price is a 12.44% premium to the closing price on December 20, and a 22.9% premium to the 90-day volume weighted average price before that. The shares closed at BRL14.36 on Thursday. Shareholders have until January 21 to tender their stock. BTG Pactual is managing the deal. DASA was last in the capital markets in October, when it sold a BRL450m 2018 debenture. DASA reported gross revenues of BRL716.7m in the third quarter.
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Peruvian Ransa stretches into Colombia
Peruvian logistics firm Ransa, part of Grupo Romero, bought Colombian cold food transporter Frigorificos Colombianos (Colfrigos) in its first expansion into the country. Ransa paid private equity firm Altra Investments $24.7m for the 93.1% stake in the firm, which has an enterprise value of $40.8m. Scotiabank was sole advisor to Ransa on the acquisition, which was closed in December.
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Vale, Cemig partner on energy assets
Vale and Cemig have agreed to form a joint venture to manage energy assets, part of Vale’s efforts to cut costs. Vale will own 55% of the entity, to be called Alianca Geracao de Energia. Cemig Geracao e Transmissao will control the remainder. The JV will hold the pair’s stakes in six hydroelectric power plants totaling 1,158 megawatts. Cemig said it would contribute BRL2.03bn ($875m). Vale did not disclose its contribution. In a separate deal, Cemig bought nearly half of the 9% stake that Vale holds in a company called Norte Energia, which will operate the Belo Monte hydroelectric plant, for BRL206m.
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Mexico, Andes to Drive M&A in 2014
After a slower than expected year M&A bankers are preparing for more active 2014, with Mexicans and Andeans compensating for a troubled Brazilian situation. Funds raised in a booming DCM during the last few years, and in an increasingly active ECM this year, may now be put to use for expansion. “Following heavy equity and debt issuance, we expect the M&A market in Mexico to be substantial next year,” Daniel Cavalli, head of LatAm M&A at Credit Suisse, tells LatinFinance. He explains that in 2013 slowing in Brazil was balanced somewhat by an improvement in Mexico and in the rest of LatAm – compensating nicely in terms of volume, if not in fees. Cavalli expects the financial and natural resources sectors to be among the most important in 2014. A return to US growth and the end of cheap financing should not have a profound effect on LatAm M&A, as it didn’t when growth slowed in the US. “We continue to be focused and invested in Brazil as we see good prospects in the medium term. Mexico will be stronger as a consequence of the reforms being passed this year, also better spending from the government will translate into better prospects in 2014. This will trigger more M&A both cross-border and local-to-local. We are sure to see more Mexicans entering Europe and North America,” Lisandro Miguens, co-head of corporate and investment banking for Latin America at JPMorgan, tells LatinFinance. Miguens sees global M&A volumes increasing next year, driving LatAm to more activity than in 2013, though not necessarily as much as 2011 or 2012. Announced M&A activity reached $139.39bn through Monday from 1,437 deals, according to Dealogic data. This is down from $163.51bn from 1,795 deals in the corresponding period in 2012. Credit Suisse led the LatAm league tables with $30.39bn volume, followed closely by BTG Pactual ($30.02bn) and Bank of America Merrill Lynch ($27.69bn).
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CFR African Vote Pushed to January
Shareholders of South Africa’s Adcock Ingram have postponed a vote on CFR Pharmaceuticals’ takeover offer to January from this week, the drugmaker says. The move follows a recent increase of the Chilean’s cash and stock takeover offer by 1.6% to ZAR12.8bn ($1.23bn). The offer was up from ZAR12.6bn. CFR’s bid comes at ZAR74.50 per share, up from ZAR73.51, and contemplates ZAR6.4bn-ZAR8.2bn in cash, and ZAR4.6bn-ZAR6.3bn in CFR shares. CFR claimed the support of shareholders holding 53% of Adcock as of last month. The acquirer needs to reach 75% for success, and a pension fund holding 19% has come out against the deal. CFR says it has a $600m bridge loan ready to go from BBVA, Santander Chile, Bancolombia and Bank of America. Credit Suisse is advising CFR, with IMTrust providing an evaluation of Adcock shares. Deutsche Bank is advising Adcock, with JPMorgan providing a fairness opinion. The deal is expected to generate revenue and cost synergies of up to $440m, would see Adcock delisted from Johannesburg, where CFR would have a secondary listing. In addition to the bridge funds, CFR is preparing a $750m equity capital raise.
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BdB to Unload Genco Stake
Banco do Brasil has authorized the sale of a 19% stake in Itapebi Geracao de Energia to Neoenergia, it says. The bank expects a BRL175m ($75m) gain from the sale of the position in the generation company. Neoenergia owns 42% of the hydroelectric generator, located on the border of the states of Minas Gerais and Bahia.
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Braskem Makes Plastic Acquisition
Braskem has agreed to buy control of Solvay Indupa, the Argentine-Brazilian unit of Belgium’s Solvay, spending up to $290m, it says. The Brazilian has agreed to buy 70.59% directly from controllers, and will tender on the Buenos Aires stock exchange for the remainder of the plastics maker. The transaction is subject to various approvals.