Category: M&A

Ternium’s acquisition of IMSA, announced Monday, is expected to yield between $3.7bn and $4bn in long term bank loans. The acquisition of IMSA shares will cost Ternium, a unit of Techint, $1.7bn, which will be raised in the loan market. Separately some of the existing debt held by IMSA, heard at $1.5bn, and by Hylsa, which Ternium acquired in 2005 for $1.3bn via a 3-part loan, will likely be refinanced too. The disparate loans are also expected to be consolidated into a single Mexican entity farther down the line. Calyon is the global-coordinator with Citi as joint lead.

The final lineup of banks looking to participate in Telemar’s acquisition financing package of BRL11bn ($5.45bn) is still in flux, according to loan market bankers. While some local press and rumors have suggested a final lineup of five banks, participants on the deal say there are slots still up for grabs. Lenders like JPMorgan, Credit Suisse and UBS appear consistently as mandated firms, while others, like ABN AMRO, Banco do Brasil and Citi, one of Telemar’s relationship banks, have also appeared, though with less consistency.

As predicted, LatAm M&A business remains brisk across a variety of countries and sectors. Deals worth a total $1.9bn are expected to close this week and smaller transactions dominate, including LT Triangulo, Banco Cacique, Arapinaca and Durman Esquivel, according to Dealogic. Societe Generale is buying Brazil’s Banco Cacique for $430m in cash, in a deal advised by Citi/UBS, while Spain’s Grupo Isolux is acquiring private utility LT Triangulo for $262m, using ABN as advisor. Meanwhile, Canada’s Aura Gold is buying the Arapinaca Copper and Gold Project in Brazil for $227m in stock, and Belgium’s Aliaxia is buying Costa Rican chemicals concern Durman Esquivel for $200m cash in a deal advised by ABN, according to Dealogic.

Brazilian telecom company Telemar is heard to be close to making a decision on a $2bn plus loan financing to pay for its leveraged acquisition of Telenorte, a competitor. The loan will be taken out at the holding company level, according to bankers away from the process. Telemar is heard to have mandated ABN AMRO for a $300m portion to be taken out at the operational company level.

Mexican broadcaster Televisa says it is evaluating an acquisition of local satellite operator Satélites Mexicanos (Satmex). The company successfully restructured last year to position itself as a target in the consolidating satellite communications sector. It appointed Morgan Stanley to advise on the sale to a strategic buyer. The restructuring, which has been praised for its fair treatment of foreign creditors, left 78% of the company’s equity in the hands of the debt holders. The remaining 22% is held by the Mexican government (20%) and jointly by local telco Principa and US operator Loral (2%).

With Cemex’s $15.3bn acquisition of Australian cement maker Rinker approved, market participants expect the Mexican company to launch the financing, heard in the $14bn size area. The deal has already been syndicated out at the top level, but is expected to go out to retail in the coming days. Citi is leading.

Brazilian holding company Itaúsa, which owns Bank Itaú, is to buy the international private banking business of ABN AMRO in Miami and Uruguay for $150m. The acquisition gives Itaú assets under management of around $3.3bn, taking its total up to $23bn. Itaú began expanding its private banking business outside Brazil in 1995. Last year, the São Paulo-based bank bought the BankBoston operations in Chile and Argentina from Bank of America for around $630m.

Brazilian low-cost airline Gol is to increase its share capital by $255 million (518 million reais) to pay for its acquisition of rival domestic carrier Varig. The company will issue of 8.519 million preferred shares at a price of 60.81 reais per share. Last month Gol announced it had agreed to buy the rescued airline in a deal worth $320 million. It said then it would finance the acquisition through cash and shares and would take on Varig’s debentures.

A $1.5 billion acquisition loan for Tenaris to acquire US tube maker Hydril is set to be flexed down thanks to strong investor interest. According to the deal terms, if oversubscribed by 25%-50%, pricing falls 2.5 basis points, for 50%-75% oversubscription, it drops 5 basis points, and 75%-100% excess demand results in a 7.5 basis point reduction, according to a banker not on the deal. A doubling of the book or more will result in a 10 basis points drop. Demand is heard already exceeding the first bracket. The deal has three tranches: a $1 billion 2-year at 40 basis points over Libor for Tenaris, a $200 million 5-year at 50 basis points over Libor; and a $300 million Hydril loan, also at 50 basis points. Citi is the lead arranger.