Peru’s Credicorp has laid another stone in its plan to build a trans-Andean platform, agreeing to a deal giving it 60.6% of Chilean investment bank IMTrust. The parent of Banco de Credito del Peru is paying a price equal to 3.5% of its equity, around $122m, according to a Credicorp investor relations official. Almost all of the transaction is to be paid for in cash, with a small portion in shares as a retention mechanism. The deal follows the acquisition of 51% of Colombia’s Correval, and positions BCP well in the race to capitalize on the growing economies in Colombia, Peru and Chile, and their market integration through the MILA initiative. BTG acquired Celfin last year with the same motive, and others are eyeing these markets. IMTrust is to maintain its existing organization, and its executives will remain in their current roles, Credicorp says. Credicorp did not use an external advisor in the deal, the official says. Separately, Fitch upgraded BCP’s credit rating to BBB+ from BBB. The outlook is stable.
Category: M&A
Tenaris Clinches Confab Delisting
Tenaris is to spend BRL1.31bn ($697m) to acquire outstanding shares of Brazil’s confab, reaching the amount it needs to delist its Brazilian subsidiary. The steel tube maker is paying BRL5.90 per common or preferred share to holders of 216.27m shares that accepted a tag along offer, Tenaris says. Outside of the auction, Tenaris also acquired 6m additional Confab shares in the market at the same price.
HK Investor Unloads Peru Mine Stake
Peru’s Minsur has agreed to acquire a 70% stake in the Marcobre project from Hong Kong’s CST Mining, for $505m, it says. Marcobre is developing the Mina Justa copper mine in Peru’s Nazca province. The deal, done through the Cumbres Andinas unit, includes a $60m initial payment. The stake in the project comes as a part of Minsur’s expansion plan. Morgan Stanley advised CST on the sale process, which began in January.
JBS Makes Independencia Offer
JBS has presented a formal offer to acquire fellow Brazilian meatpacker Independencia for around BRL268m ($144m), it says. The amount would include a BRL135m in JBS shares, at a value of BRL7.91 per share, and BRL133m in cash. JBS would not assume any debt in the deal. The proposal must be approved by the creditors of Independencia, which has been under bankruptcy protection since 2009.
Limited Argie Nationalization Risk: Fitch
Following Argentina’s decision to nationalize oil producer YPF, a worst-case nationalization scenario appears manageable for large LatAm, European and US companies in the context of diversified global operations, and would be unlikely to drive rating changes, Fitch says. “We see limited credit risk related to prospective nationalization for rated multinational companies operating in Argentina, but we do foresee increased regulatory uncertainty, growing diplomatic isolation, and the potential continuation of unorthodox government policies. We expect this to curtail foreign direct investment (FDI) in key sectors such as energy, utilities, and telecom,” the agency says. For oil firms including Total, BP, Exxon Mobil, and Shell, as well as large miners like Vale, Fitch regards the expropriation risk as manageable, when viewed relative to global production. Argentina is said to be courting additional investors for the oil sector, and Fitch says possible investment shortfalls in the oil and gas sector could in part be addressed by increased investment by Chinese companies such as Sinopec, which has already invested heavily in Latin American energy projects. The nationalization drama of YPF continued to unfold following last week’s announcement, and much remains unclear. The Eskanazi family, holder of 25%, now faces payments on a $2bn loans with several banks from 2008 without the dividend income on which it relies. An agreement between Eskenazi and Repsol states that Repsol would buy Eskanzi’s shares and take over its loans in the event that Repsol loses control, though Repsol countered last week that the agreement is not valid under nationalization. The government has also included YPF Gas in the nationalization package.
Atlantia Sells Chilean Road Stake to Canadians
The Canada Pension Plan Investment Board (CPPIB) has agreed to buy a 49.99% stake in Atlantia’s Chilean toll road unit Grupo Costanera for CLP560bn ($1.15bn), the two say. The sale provides needed funding for Costanera’s toll roads, and culminates a process stretching back to last year when the Italian road operator examined several options to raise funds. Atlantia had considered floating part of its position publicly last year, before buying the 45.465% it did not own in February for EUR565.2m. It then solicited the interest of at least 10 bidders earlier this year, according to remarks made by company officials at the time, before the agreement to sell to CPPIB, an owner of several private equity investments in several sectors worldwide. Credit Suisse and Goldman Sachs advised Atlantia, according to people familiar with the sale, while Evercore is heard to have advised CPPIB. Atlantia could not be reached for additional information, and CPPIB did not respond to a request to comment. Costanera owns 5 toll roads in Chile, spanning 188km.
Canadian Pharma Adds Mexican Assets
Valeant Pharmaceuticals International has agreed to acquire certain assets from Mexico’s Atlantis Pharma for $71m cash, it says. The Canadian company, which has existing Mexican operations, picks up branded generic products sold in Mexico, a spokeswoman says, without elaborating further. Atlantis’ portfolio includes brands in the gastro, analgesics and anti-inflammatory therapeutic categories. The transaction is expected to close in the second quarter, subject to certain closing conditions including regulatory approvals, and is expected to be immediately accretive, Valeant says. Valeant does not typically use advisors in its deals, the spokeswoman says.
Swedes Get Remainder of Chilean Tissue Maker
Swedish hygiene and paper company Svenska Cellulosa (SCA) has agreed to buy the 50% it does not already own in Chile’s Papeles Industriales (Pisa), for about SEK520m ($77m), it says. SCA bought the first piece of SCA in 2003, and has since been expanding in LatAm, most recently with the $70m purchase of Pro Descart in Brazil last year. Pisa specializes in tissue and hygiene products, and distributes incontinence care products under SCA’s Tena brand. SCA has a presence in Mexico and several Andean countries.
AmBev Boosts Expansion with Dominican Buy
Companhia de Bebidas das Americas (AmBev) has agreed to spend $1.24bn to acquire a 51% position in Cerveceria Nacional Dominicana (CND), the largest brewer in the Dominican Republic, it says, through 2 deals seen as AmBev gaining another local brand with expansion potential. AmBev has agreed to pay $1bn cash to form a joint venture with CND parent E Leon Jimenez (ELJ), which owns 83.5% of CND, giving the international group a 41.76% indirect stake in the brewer of the iconic Presidente brand. Separately, AmBev has agreed to pay Heineken $237m for the Dutch brewer’s 9.3% interest in CND, giving AmBev a total 51.06%of CND. “This isn’t cheap, but it is focusing on the potential of the market, plus synergies. There is a potential to take the brand to other markets,” says a New York-based beverage analyst, noting the implied13x enterprise value/Ebitda given by Ambev is at the high end of the range but not expensive. Though the Dominican Republic is not a large market, the analyst also points to AmBev’s strong track record at capturing synergies and taking local brands regional or global. Analysts point to a 12x-13x average multiple for EM M&A deals in the sector, noting that LatAm assets tend to be at the expensive end due to strong growth potential. “This is a defensive move, to keep other international companies from taking LatAm market share,” says a Brazil-based analyst. AmBev says the transaction should be earnings per share accretive in the first year of operations. CND will continue to operate under its own name, with Franklin Leon as president and Alexandre Medicis as CEO. The parties will enter into a shareholders’ agreement, in which Ambev will nominate 5 members to the holding company’s board and ELJ will nominate 4, among other provisions. The combined operation will sell beer, malt and soft drinks in the Dominican Republic, Antigua, Saint Vincent and Dominica, as well as export drinks to 16 other countries. Deutsche Bank and Lazard advised AmBev, while Bank
Canadian Mines Mexican Gold Assets
Endeavour Silver has agreed to acquire 100% of the El Cubo mine and the Guadalupe y Calvo project in Mexico from Aurico Gold, for $250m. In the deal, Endeavour is to pay $100m cash and issue $100m in shares upon completion of the acquisition. In addition, Endeavour will pay $50m upon the occurrence of certain events over a period of 3 years from the date of acquisition. El Cubo is a 8,144 hectare gold and silver mine 10km from Endeavour’s existing project in the Guanajuato mining district in central Mexico. Guadalupe y Calvo is an advanced exploration gold and silver project in Chihuahua state. The transaction value implies $8.04 per inferred resource of silver and $409.8 per inferred resource of gold, Endeavour says. Koffman Kalef advised Endeavour and Dundee Capital Markets and Fasken Martineau DuMoulin advised Aurico.