French oil firm Total has sold off its Colombian affiliate TEPMA to China’s Sinochem, marking one of three such sales that in total were valued at $1bn . Total’s TEPMA holds a stake in the 7,000-barrels-of-oil-equivalent a day Cusiana field as well as the OAM and ODC pipelines, Total says. The deal comes after the company sold a 5% stake in the Ocensa pipeline to Petrominerales and another 5% to Cepsa. Officials at Total declined to offer additional details about all three transactions and did not say if any advisors were involved. Sinochem officials could not immediately be reached for comment. Total has said the sale falls in line with its recent approach to selling off pipelines in other locations. Despite the asset sale in Colombia, however, Total expects to continue its exploration activities and ownership stakes in the Nicosta (50%) and Mundo Nuevo (55%) blocks.
Category: M&A
BTG Pactual Seals Celfin Acquisition
Brazilian investment bank BTG Pactual has finally closed its much anticipated purchase of Chile’s Celfin Capital in exchange for 2.42% of BTG equity and $245m in cash. The merger creates a firm with $69bn in assets under management and a $28bn wealth management business, the companies say. Currently Celfin has $4.5bn in its asset management division and $5bn in wealth management. As part of the deal’s financials, the parties value BTG Pactual’s total equity at roughly $5bn but they expect this to triple once the bank goes public, given that some of LatAm’s largest banks are trading at three times book value, say people close to deal. Under those assumptions, a 2.42% stake of $15bn in equity would be worth $363m. Officials at BTG Pactual could not comment further on the deal and officials at Celfin declined to offer more details, but said the parties did not retain any financial advisors for the transaction. Merger talks began last August, but details were closely held from public view. BTG is seeking to expand its footprint outside Brazil and Celfin has been seeking a way into the Brazilian market. BTG CEO Andre Esteves told LatinFinance in early 2011 that moves into Colombia, Chile and Argentina were natural next steps for the bank. BTG recently filed initial registration with the CVM, the first step towards an IPO. Founded in 1988, Celfin is owned by 6 partners, including Juan Andres Camus and Jorge Errazuriz.
Mexichem Finally Clinches Wavin Buy
After several failed bids, Mexico’s Mexichem has finally managed to seal its purchase of Dutch plastic pipe maker Wavin by offering to pay EUR531m ($704m) for the company. The move creates the world’s largest player in the plastic pipe market with EUR4bn in sales. Mexichem upped its offer to EUR10.5 per common share, or a 177% premium to the EUR3.79 per share close on November 18, the date originally used to mark Mexichem’s first offer, the company says. The Mexican company originally offered EUR8.5 per share in late November, later increasing it to EUR9 per share on December 9 and to EUR10 per share in early January. Taking Wavin’s 50.58m outstanding shares, the final EUR10.5 per share offer values the company at roughly EUR531m or an implied enterprise value to Ebitda of between 8.2x and 8.3x, according to data from people familiar with the deal. Such calculations assume net debt between EUR300m and EUR330m and an estimated 2012 Ebitda between EUR100m and EUR105m. Mexichem is financing the acquisition with EUR520 from its own cash and the rest with several credit lines. Mexichem retained Barclays Capital and Citigroup as advisors, while Bank of America Merrill Lynch was retained by Wavin. The deal became possible after the parties resolved lingering issues surrounding employee rights and pensions of Wavin’s Dutch workers. The companies have announced there will be no layoffs as a result of the merger.
PDVSA Misses New Petrobras JV Deadline
Venezuela’s PDVSA missed a January 30 deadline to finalize its participation in the Abreu e Lima refinery joint venture with Brazil’s Petrobras after failing to secure a $10bn loan from development bank BNDES to pay for the transaction. Failing to offer BNDES the required loan guarantees, the Venezuelan company was unable to secure the financing for its 40% stake in Abreu e Lima located in Brazil’s northeastern state of Pernambuco, a $13.36bn joint venture that was formalized in December 2005, Petrobras says. At the time of the original signature, PDVSA and Petrobras expected the project to be completed in 2011. Late last year, PDVSA said it would secure loan guarantees from its Chinese partners to finalize its participation, but it is unclear whether that ever happened. Officials at PDVSA and BNDES could not immediately be reached for comment. Petrobras has said it plans to move ahead with the project with or without the participation from PDVSA. The project has on occasion been a stone in the shoe of diplomatic relations between both countries. Venezuelan President Hugo Chavez has often publicly complained about the slow pace of the transaction, blaming Petrobras executives and at one point denouncing the BNDES loan guarantees as unnecessary.
Brazil’s Braskem to Absorb Ideom
Brazilian petrochemical company Braskem is moving to absorb the operations of its fully-owned subsidiary, technology company Ideom. The move will require approval by shareholders and is part of Braskem’s attempt to reorganize the company. All of Ideom’s 24.4m shares are owned by Braskem so the merger transaction will not involve any cash or new issuance. The company hired PricewaterhouseCoopers which has valued Ideom at BRL20.8m. Officials at Braskem could not immediately be reached for additional comment. Braskem has been present in the fixed income markets of late, issuing $250m in 5.75% 2021 bonds in late January.
Itau Nabs Remaining Stake in Redecard
Brazil’s largest private bank, Itau Unibanco, has made a bid to acquire the stake in card payment firm Redecard that it doesn’t already own for BRL11.77bn ($6.85bn). Itau is offering to purchase 336.4m Redecard shares, or 49.985% of the company, in exchange for BRL35 per share, the company notes in a filing to Brazilian regulators. The acquisition would involve the delisting of Redecard from the Novo Mercado. A Redecard spokeswoman redirected inquiries to Itau. Officials at Itau in turn point out that Itau itself acted as advisor and intermediary in the tender offer, but they declined to offer additional valuation details. The deal offers some promising prospects for Itau in terms of additional businesses that the bank could generate through the Redecard network, says Barclays Capital in a recent note. By investing BRL12bn in exchange for BRL750m in additional profits, Itau’s returns on the Redecard acquisition may be less than investments returning the Selic rate of between 9%-10%, the shop notes. But the purchase of the remaining 50% stake has added value as it is also seen as part of Itau’s strategy to compete with its peers for business in the small and medium sized enterprises category.
Mexico Opens Window to Televisa- Iusacell Deal
Mexico’s anti-trust regulator has opened a window of opportunity for the potential approval of Televisa’s $1.6bn acquisition of a 50% stake in wireless provider Iusacell after saying it would reconsider its decision to block the transaction. “If the companies present agreements that resolve some of the competition problems” in the television advertising market that would result from the tie up, regulator (Cofeco) said it would authorize the merger. The announcement came just days after the regulatory agency officials voted 3-2 in favor of blocking the merger arguing that an incentive would exist to fix advertising rates. Iusacell is owned by billionaire Ricardo Salinas Pliego, who also controls TV Azteca, the second largest broadcaster in the country after Televisa. Iusacell’s deal with Televisa is seen as part of the company’s strategy he company to build its strength to compete with corporate titan Carlos Slim who controls roughly 70% of the telecom business in the country. In the acquisition as structured, Televisa has invested $37.5m in Iuscacell equity, and another $1.565bn in Iusacell convertible debt paying 2% with a December 2015 conversion date. Iusacell, Mexico’s third largest cellular services company, has already begun using the invested funds. At the time of the transaction, Barclays estimated the deal came in at a pricey 21x EV/Ebitda multiple, using Iusacell’s 2009 Ebitda of $150m. The Televisa’s ADRs remained unchanged on Tuesday at $19.88 following the regulatory announcement.
Cemex Ups Bid For Ireland’s Readymix
Mexico’s Cemex has increased its bid for a stake in Irish company Readymix that it doesn’t already own. Cemex has decided to increase its offer to EUR0.25 per share of Readymix from a previous EUR0.22 per share cash bid, the company says. Cemex currently owns 62% of the company, a Cemex spokesman adds, and is currently seeking to acquire the 38% stake remaining. Company officials could not immediately provide additional details. Officials at Readymix could not be reached for further comment. Cemex’s offer values the company at approximately EUR27.4m ($36m), as estimated using the company’s 109.6m shares outstanding. On Monday, Readymix shares trading on the Irish Stock Exchange closed at EUR0.22 per share or an implied market cap of roughly EUR24m.
France’s Rexel Acquires Brazilian Electrical Supply Cos
French electrical equipment company Rexel has acquired two electrical material suppliers in Brazil in a bid to cement its presence in the country. Rexel acquired Delamano, a Sao Paulo-based company that posted EUR60m in sales last year, and Etil, also Sao-Paulo based and with EUR40m in sales in 2011. A Rexel spokesman declines to give a total figure for either acquisition, but says the company retained Ernst & Young Terco as a financial and tax advisor, and Pinheiro Neto Advogados as a legal advisor for the transactions. Delamano hired PwC as financial advisor as well as lawfirm Dessimoni & Blanco, while Etil used Grant Thornton for financial advisory and Nelson Wilians for legal counsel. Rexel estimates that the acquisitions turn it into a leading electrical material supplier in the Sao Paulo region.
Brazil Auctions $14.2bn in Airport Concessions
Brazil managed to generate BRL24.53bn ($14.2bn) from investors in a licensing auction that opened the door for the private sector to modernize the country’s key airports. Brazil’s Investimentos e Participacoes em Infraestructura, Invepar, a construction company holding, and its partner Airports Company South Africa (ACSA), secured the concession for Sao Paulo’s Guarulhos airport by bidding BRL16.213bn. The 20-year concession with a year extension will be operated by a company 51% owned by Invepar and ACSA with the remaining 49% to be held by Brasileira de Infraestrutura Aeroportuaria, Infraero. The concession for the Viracopos airport in Campinas went to the group led by Triunfo Participacoes, with a BRL3.821bn bid, for a project that will require a roughly BRL8.7bn investment. The airport of Brasilia was won by Brazilian construction firm Engevix together with Argentina’s Corporacion America by bidding BRL4.5bn. The companies are expected to pay the initial installments of these investments next year and to pay the government a fee over the life of the concessions. It remains to be seen how the partners choose to finance their capital outlays for the projects.