Anglo American and Codelco will ask for a second extension, to mid August, to finish discussions aimed at resolving a dispute over ownership of Anglo’s Chilean unit, Codelco says. The pair, fighting over the Anglo American Sur mine, had in May requested a pause in court proceedings to allow for talks, and pushed back the first June 22 deadline to July 17. Coldelco wants to exercise a decades-old option to buy 49% of Anglo American Sur. Anglo agreed in November to sell 24.5% of the unit to Mitsubishi for $5.39bn, which Codelco saw as an attempt to block it from exercising its option fully. “The negotiations between the two firms continue and there is still no deal between the parties,” Codelco says.
Category: M&A
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Itau and BMG in Payroll Tieup
Itau Unibanco and Banco BMG have agreed to form a BRL1bn ($492m) payroll lending joint venture, the two Brazilian banks say. The deal allows Itau access to the fast-growing payroll lending segment, and allows BMG – at a time when costs of funding for mid-size banks has shot up – to continue lending in the sector and worry less about capital. Itau is to hold 70% in the vehicle, to be called Banco Itau BMG Consignado, and BMG 30%. The joint venture’s portfolio of loans is expected to reach BRL 12bn in the next two years. Itau may provide BRL300m in credits, under the payroll deduction system, per month. Itau has an option to buy out BMG’s stake in the venture. “Given BMG’s successful operations in the direct payroll debt loan market, Itau expects to achieve leadership among private sector banks in this segment. This transaction is another step by Itau to operate with assets of lower risk and spread,” Itau says. The deal is expected to close in 90 days.
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Vale Unloads European Assets
Vale has agreed to sell its European ferromanganese assets to Glencore for $160m cash, it says. In the name of “optimization of the portfolio of assets,” the Brazilian miner parts with 100% of the Vale Manganese France and Vale Manganese Norway.
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American Electrical Supplier Makes Peru Buy
Anixter International has purchased Peruvian electrical wire and cable distributor Jorvex, it says, for $56.2m and the assumption of $10.5m in debt. The final price to be paid by the Chicago-based distributor of communication and security products, may also be subject to a net asset adjustment. Annual sales for Jorvex were approximately $115m in 2011, and Anixter expects the acquisition to be immediately accretive to earnings in the second half of 2012. Anixter is already active in Peru and several other Latin American markets. Anixter did not use an advisor, according to a spokesman.
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Modelo Deal Pushes Americans to M&A Lead
The $20.1 billion sale of 50% of Grupo Modelo agreed June 29 shook up the regional M&A league tables, placing JPMorgan and Bank of America Merrill Lynch at the top, according to Dealogic. Though BAML led at the midyear point, the numbers through Friday had JPMorgan at the top with $39.5bn volume through 23 deals, just ahead of BAML’s $38.0bn from 13. Lazard, also on the Modelo deal, stood third with $31.6bn from 13. Prior to the Modelo transaction, the largest deal in EM in 1H 2012 and sixth-largest ever in EM, Itau’s $22.1bn volume led the region. Modelo also pushed regional 1H volume to $133.5bn through Friday, ahead of the $74.5bn done in the corresponding period last year. Despite the AB InBev’s purchase of the remainder of the Mexican brewer representing more foreign entry to LatAm, European divestures should continue to drive the M&A market in the rest of the year, bankers say. “We have barely hit the surface of the available divestitures in the region,” notes a New York-based banker, noting that those foreigners who can will still opt to spend more in the region. M&A Fees in LatAm paint a different picture than the volume totals, with BTG Pactual leading the league tables with $62m through Friday, or 47% of the pool. Credit Suisse is second with $34m (30%), and Itau third with $26m (37%). EM-targeted M&A volume reached $377.2bn in 1H 2012, down 4% from 1H 2011, Dealogic says. However, EM?s share of global M&A rose to 30%, the highest share since 2H 2010.
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BTG Unloads Oil Stake
BTG Pactual has sold its stake in E&P operator STR Projetos e Participacoes, a holding company with assets in the oil and gas industry, for BRL700m ($345m). The sale was done through a public auction on the Bovespa. BTG’s private equity arm controlled the STR stake via its Stigma Participacoes vehicle.
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Edenred Adds in Brazil
Edenred has expanded in Brazil through the acquisition of food voucher issuer Comprocard, it says. The French corporate services provider is spending EUR24m ($30m) on the Brazilian, as it continues to target growth in the emerging markets. Comprocard issues around EUR100m in volume annually. Edenred has operated in Brazil since 1976, and is also present in Argentina, Chile, Mexico, Peru, Uruguay and Venezuela.
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Publicis Swallows Brazilian Ad Agency
Publicis Groupe has taken control of Neogama, a Brazilian advertizing firm, as part of a larger deal for a British player. The French communications group has agreed to acquire 66% of Neogama shares from founder Alexandre Gama and his partners, and will receive 34% through an agreement to acquire control of UK-based Bartle Bogle Hegarty (BBH). It does not disclose the value of the purchase, and a spokeswoman declines to comment. Neogama, which booked EUR42m ($52m) in revenue in 2011 and has been working in partnership with BBH since 2002, will keep its name. KPMG advised Publicis, while Estater advised Neogama.
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Mapfre Takes All of CentAm Holdco
Spain’s mapfre has agreed to buy the 35% that it doesn’t own in the holdco for its Central American business from Panama’s Grupo Mundial, it says. Mapfre Mundial, as the holdco is known, contains the insurer’s operations in Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama. It does not disclose the value of the transaction, and does not respond to requests for comment. Mapfre bought the initial 65% from Mundial in 2009.
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Cielo Expands with US Buy
Cielo has agreed to buy US payment processor Merchant e-Solutions (MeS) for $670m, it says. The Brazilian credit card payment processor was particularly drawn to MeS’s payment platform technology and its potential use in Brazil, rather than to the international expansion. The move offers Cielo diversification and better defense against increasing competition in Brazil’s credit card payment sector, which will remain its major focus. The deal was seen at a multiple of 11x Ebitda, according to remarks from Cielo’s CEO cited in local news and wire reports, and Cielo does not expect to put money into growing MeS in the US. MeS processes more than $14bn per year in transactions, with more than 250 financial institution clients, taking in $124m in revenue for the 12-month period through May 31. The transaction is being financed through Cielo’s own cash generation and prepayment of receivables from issuers, according to a spokesman. Goldman Sachs advised Cielo, and JPMorgan advised MeS.