MetLife and BBVA have put terms on the anticipated sale of the Spaniard’s AFP Provida Chilean pension unit to the American insurer, with the $2bn value generally seen as fair. In the deal, BBVA has agreed to sell its 64.3% of Provida for $1.52bn, and MetLife will tender publicly for the remainder, the two parties say. MetLife will offer holders $6.04 per share for each of the 118m shares making up the public float. Provida holders can also expect another $365m in dividends as a result of the sale. Overall the valuation is seen as fair, and lower than other recent deals in the sector. “The purchase of Provida will enhance MetLife’s business mix by increasing its exposure to faster-growing and higher-return emerging markets,” JPMorgan says in a report, calling the deal “fair” and a “strategic positive.” The shop finds that the deal values Provida at 4.4% of AUM and 11x 12-month earnings. This compares to the 4.7% of AUM and 13x earnings that Prudential Financial paid for AFP Cuprum last year in a $1.5bn transaction, the most recent previous sale of a Chilean pension. BBVA was seen selling its Mexican pension at around 14.5x in October, and selling its Colombian unit at around 13.5x in January. The US insurer says it expects to boost its earnings from EM to 17%, from 14%. As part of a shift to less capital intensive products, MetLife says the deal should be immediately accretive to earnings, at approximately $0.05 per share in 2013 and $0.15 per share in 2014. BBVA expects a EUR500m ($685m) post-tax gain from the sale. The transaction also includes a small asset management business in Ecuador. MetLife is paying cash. BBVA has sought buyers for its pension-fund assets in Chile, Mexico, Peru and Colombia since May of last year. It agreed in November to sell the Mexican operation to Banorte for $1.6bn and the Colombian operation to Grupo Aval in January for $530m. Its Peruvian business remains on the block. Bank of America Merrill Lynch and law firms Sakdden Arps and Prie
Category: M&A
Brazilians in Pharma Tie-up
Brazil’s Profarma Distribuidora de Produtos Farmaceuticos has agreed to buy 50% of peer Drogarias Tamoio for BRL105m ($53m), it says. The pharmaceutical retailer says the deal comes at a multiple of 7.5x EV/2013 Ebitda. Rio de Janeiro-based Tamoio specializes in medicine, personal hygiene products and beauty products, and booked BRL312m in revenue last year. The transaction is subject to regulatory approval.
Regulator Challenges Modelo Sale
The US Department of Justice has filed suit to block the $20bn acquisition of 50% of Mexican brewer Grupo Modelo agreed last year, buyer AB Inbev says. The challenge to the deal – LatAm’s biggest announced M&A transaction in 2012 – is mainly based on AB Inbev’s ability to charge consumers more if it controls both the Corona and Budweiser brands, two of the most popular in the US market. At the very least, it is a setback to the parties’ original plans to close the deal by the end of March. After four years of AB Inbev owning an initial 50% of Modelo and long discussions for the other half, the two sides agreed on the deal in July. Morgan Stanley advised Modelo, while Deutsche Bank, Lazard, Barclays, JPMorgan and Bank of America Merrill Lynch advised AB InBev. The move is “inconsistent with the law, the facts and the reality of the market place,” AB Inbev says, vowing to contest the action while noting that closing should be delayed.
BTG Buys Troubled Bank
BTG Pactual has agreed to acquire Banco Bamerindus do Brasil, it says, paying BRL418m ($210m) to the FGC deposit guarantee fund. The deal gives BTG 98% of the liquidated bank’s remaining assets. The deal includes debt, but excludes the bank’s brand name. The payments are to be made in five annual installments.
MetLife Negotiating with BBVA for Chile Pension
MetLife is in talks with BBVA to buy the AFP Provida pension business in Chile, it says. The timing of any deal is unclear. The US financial services company had been suspected as a buyer for the four LatAm pension businesses BBVA put on sale last year. Earlier this month BBVA sold the AFP Horizonte in Colombia to Grupo Aval for $530m, and last year sold its Mexican operation to Banorte for $1.73bn. Both the Chilean and Peruvian assets remain on the block. Goldman Sachs has been advising BBVA on the sale process.
Canadians Buy into Sura Unit
Grupo de Inversiones Suramericana (Sura) has agreed to sell 7.51% of the Proteccion pension fund to Alberta Investment Management (AIMco), it says, for a total of COP134bn ($75m). The deal includes the transfer of 1.9m shares to AIMco’s Cornerstone unit, at a price of COP70,000 per share. Upon completion, Sura will own 49% of Proteccion through direct and indirect holdings. Proteccion shares closed at COP69,980 Monday.
Totvs Adds Developer
Brazil’s Totvs has agreed to buy W&D Participacoes, a holdco for two retail-focused software developers, it says, for up to BRL95m ($47m). The acquisitive IT provider is to pay BRL80m, and will make an additional payment of up to BRL15m that is dependent on the target’s results this year. The deal remains to be approved by Totvs’ shareholders. W&D owns the PC Sistemas and PC Informatica brands. Totvs did not use an external advisor for the deal, which is to be funded with its own cash, according to a company official.
Axtel Exchange Reaches 65%
Mexico’s Axtel has received acceptance from holders of 65% of the debt it is targeting in a bond exchange offer, it says, following the completion of the early acceptance deadline. In the offer scheduled to expire today, the telecom is targeting its outstanding 7.625% 2017 and 9.000% 2019 bonds. It is offering $594.61 per $1,000 principal, comprised of $500 in senior secured 2020 bonds, $44.61 in peso-denominated dollar-indexed 2020s and $50 cash. Holders accepting before the early deadline receive an additional $116 per $1,000 principal. The 2020 notes start at 7.0%, stepping up to 8.0% after the first year and 9.0% after year two. Axtel is rated Caa2/CCC+/B minus. The company also announced it has agreed to sell 883 telecommunication towers to MATC Digital, a subsidiary of American Tower Corporation, for $250m. In the deal, Axtel is to lease back space on these telecommunication sites from American Tower for initial minimum lease terms of 6-15 years.
Japanese Insurer Adds in Brazil
NKSJ has increased its stake in Brazil’s Martima Seguros, it says, at a cost of BRL200m ($98m). The Japanese insurance group acquires 37% of Maritima’s common shares and 21.8% of its preferred shares, to bring its total holding to 87% of common shares and 92.1% of preferred shares. Through its Yasuda Seguros unit, it bought the shares from members of the Vidigal family. NKSJ first bought a position in Maritima in 2009. The deal is subject to regulatory approvals and expected to close by May.
Provida Sheds Peru Stake Ahead of Sale
Chile’s AFP Provida has approved the transfer its 15.87% stake in Peruvian pension fund AFP Horizonte to parent company Grupo BBVA. The move comes at a price of PES183m ($71m), and streamlines the Chilean asset for its eventual sale. BBVA is undergoing a process started last year to rid itself of pension fund operations in four LatAm countries. Earlier this month it sold the AFP Horizonte in Colombia to Grupo Aval for $530m, and last year sold its Mexican operation to Banorte for $1.73bn. Both the Chilean and Peruvian assets remain on the block. Goldman Sachs has been advising BBVA on the sale process.