Kinea, an investment firm controlled by Itau, has agreed to buy 20% of Grupo ABC for BRL170m ($84m), ABC says. Brazil’s largest indigenous communications player plans to use proceeds to make acuqisions and organically grow the various companies ABC operates. Kinea is to have representation on ABC’s board. Goldman Sachs advised the target, according to Dealogic data. ABC is among those tipped as a candidate for a public equity sale.
Category: M&A
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AB InBev Close to Modelo Solution
Anheuser-Busch InBev (AB InBev) says it has reached “an agreement in principle” with the US Department of Justice to resolve the lawsuit seeking to block the purchase of Grupo Modelo, it says. It has asked to have until April 23 to finalize the details. The agreement is substantially in line with the plan in announced last month to sell a Mexican brewery and control of the Corona brand in the US to Constellation Brands for $2.9bn. The government filed the lawsuit on concern that the combination of Ab InBev and Modelo would control too much of the US beer market. Analysts expected that the $20.1bn deal agreed last year to buy the remaining 50% of the Mexican Brewer would be able to proceed following the Constellation deal.
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Chilean Telco Enters Peru as Nextel Pulls Back
NII Holdings has agreed to sell its Nextel del Peru unit to Chile’s Empresa Nacional de Telecomunicaciones (Entel) for $400m cash, Entel says. Entel plans to reserve funds for the acquisition partly by reducing its dividend payout to 50% percent of profit, compared to levels of 80% in the past. The sale follows months of discussion and represents an expansion into new territory in LatAm for Entel. The move “bodes well for future growth for the company as the Peruvian telecom industry is less developed than the Chilean one and therefore, we see an opportunity in terms of penetration and higher data use,” IM Trust says in a report. Peru has only two large competitors, units of America Movil and Telefonica, while most other LatAm countires have three or more. IM Trust notes an implied paid multiple of 1.2x EV/sales, which it calls attractive compared to Entel’s trailing 2.0x level. However, the shop notes that Entel faces “major challenges” to recover profitable margins in Nextel Peru’s operation, with Ebidta margins below those of Entel. NII plans to use proceeds from the sale to invest more in Brazil and Mexico, it says. It is also contemplating the sale of businesses in Chile and Argentina, as well as wireless towers in the region. The transaction is expected to close in the second half of this year. Asset Chile and BNP Paribas advised Entel. Deutsche Bank advised Nextel.
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Copeinca Reels in Higher Bid
Norway’s Cermaq has agreed to buy control of Copeinca in a deal valuing the Peruvian fishmeal exporter at NOK3.49bn ($610m), allowing the target to thwart a $550m hostile takeover from China Fisheries (CFG) and command a higher price. Copeinca had been seeking strategic alternatives since CFG made its offer in February, which the Peruvian found to low. State-controlled fish farmer and fish feed producer Cermaq has agreed to buy 11.7m shares, or 17.9% for NOK59.70 each, and has entered into binding agreements with owners led by Dyer Coriat Holding and Weilheim Investments for another 23.0m shares, or 32.8%, at the same price, it says. After spending this initial NOK2.07bn amount, the white knight plans to launch a cash tender at the same price for the remaining 49.3% later this month. The price beats CFG’s NOK53.85 per share offer and compares to a NOK60.00 close in the session prior to the deal. Shares closed at NOK62.00 Friday. Cermaq will fund the deal using 40% cash and 60% shares, and plans a NOK1.6bn rights offering to raise funds. The buyer also plans to tap existing and future credit facilities. The deal gives Cermaq assets that are more upstream in the fish production process, offers NOK250m-NOK270m per year in synergies, and should be accretive to earnings per share this year. Large integrated players from fish-importing nations, including Asians and Europeans, are seen by many as likely catalysts for consolidation in Peru’s fragmented fish export industry. Copeinca booked sales of $314m last year and operating profit of $75m. Cermaq plans to keep the current Copeinca management in place and operate it as a separate business unit, according to remarks from company officials in a conference call. The Dyer family will own 7.5% of Cermaq. UBS, DNB Markets and Carnegie advised Oslo and Lima-listed Copeinca, and were hired last month following the CFG bid. ABG Sundal Collier advised Cermaq.
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Bladex Sells Asset Management Unit to Managers
Banco Latinoamericano de Comercio Exterior (Bladex) has agreed to sell its asset management unit to members of its own asset management team, it says. The buyer is a newly-formed company, Alpha4X Asset Management, majority-owned by CIO Manuel Mejia-Aoun and other members of Bladex’s asset management team. The multilateral lender does not disclose the value of the unit, which was founded in 2006 with an initial investment of $100m. A spokeswoman declined to provide additional information. Also reinsurer XL Group has agreed to acquire a minority stake in Alpha4X. Bladex will continue in its role as anchor investor of the flagship fund for a period of up to three years, with an investment amount reducing until it exits. Bladex will also enjoy certain revenue-sharing rights during the three years. The sale of the unit is expected to close in the second quarter of 2013.
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Canadian Clinches Panama Mine
First Quantum Minerals has received 92.74% acceptance in its tender offer for Inment Minig, it says, as of an April 1 close. The $5bn offer gives First Quantum control of Canada-listed Inmet’s main project, the $6.2bn Cobre Panama mine in Panama, of which Inmet owns 80%. The remaining 7.26% of Inmet shares will be acquired compulsorily. Inmet had at first urged its shareholders not to accept the unsolicited offer, first announced in December, saying it did not reflect the upside of Cobre Panama. For each Inmet share, First Quantum offered CAD72.00 ($70.00) in cash, or 3.2967 First Quantum common shares, or a combination of CAD36.00 in cash and 1.6484 common shares.
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M&A off to Slow Start: Dealogic
Latin America-targeted M&A volume was $18.2bn in 1Q, according to Dealogic, representing the lowest first quarter since 2005. The total, from 309 deals, was down 41% from 1Q 2012. The LatAm share comes out of a $690bn global total that was up 18% from 1Q 2012. Mexico was the most targeted nation with $6.1bn, followed by Brazil with $5.1bn. Goldman Sachs leads the league tables, booking $4.40bn from five deals, followed by Bank of America Merrill Lynch ($4.90bn from two) and JPMorgan ($3.75bn from six).
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Germans Increase MPX Stake
Germany’s E.ON has agreed to pay at least BRL1.78bn ($886m) to increase its stake in Brazil’s MPX, MPX says, through a direct purchase of shares from controller Eike Batista and participation in a planned equity follow-on. Batista has agreed to sell 142m shares, or 24.5%, of the power generation company to E.ON, at BRL10.00 each, a price adjustable to as much as BRL11.00 each depending on certain conditions. The move takes E.ON to a 36.2% position. MPX plans to follow this with a public follow-on sale of primary shares, in which E.ON has committed to exercise its rights for at least BRL367m, at the same BRL10.00 per share price. BTG Pactual has been hired to manage the sale, for which the timing remains to be set. MPX and E.ON have signed a shareholder agreement establishing E.ON’s voting rights. The two parties’ existing joint venture is also to be folded back into MPX.
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Gerdau Unit Cuts Forest Assets
Gerdau subsidiary Seiva Florestas e Industrias has sold its 46% stake in Maco Holdings to Acoter Participacoes for BRL104.9m ($52m), it says. Seiva exits its reforestation assets in southern Brazil with the Maco sale, in order to focus on steel operations. Seiva plans to use the proceeds to distribute dividends to its shareholders, including Gerdau, which would use the cash received to tackle amortization of its debts, according to a spokesperson. Apsis Consultoria e Empreendimentos and Mynarski & Associados advised Seiva.
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Mexichem Makes US Buy
Mexichem continues to grow beyond its home market, with the $250m purchase of the base resin assets of PolyOne, the companies say. The US seller is divesting its vinyl dispersion, blending and suspension resin assets in order to shift its focus to specialty chemicals. For Mexichem, the deal boosts its US footprint, especially in the niche market for custom products. The assets booked revenues of $147m in 2012. The transaction is subject to regulatory approvals. The companies did not respond to requests for additional comment.