Category: M&A

Brazilian manufacturer Lupatech, which makes valves for the oil and gas industry, has closed its acquisition of two Argentine firms – Válvulas Worcester and Esferomatic – in deals worth $55.6 million. Lupatech has been on a buying spree this year, acquiring five companies in the region since May, when it raised $210 million (452.7 million reais) from its IPO on Bovespa.

Bunge Fertilizantes, Brazil’s leading fertilizer retailer and part of industrial conglomerate Bunge, is to merge with local fertilizer producer Fosfertil, both companies announced. The merger aims to create a company – to be called Fosfertil Fertilizantes – to compete against the global players for domestic market share. Brazil is the fourth-largest fertilizer market in the world, according to Fosfertil. Bunge currently owns a 12% stake in Fosfertil. In July, Norwegian Yara International, the world’s largest mineral fertilizer producer, become the second-largest player in Brazil’s fertilizer market after it paid $126 million for local firm Fertibrás.

Brazilian steelmaker Companhia Siderúrgica Nacional has terminated a merger agreement with US steel company Wheeling-Pittsburgh, CSN announced Friday. The two companies had agreed to a merger at the end of October but the move was strongly resisted by shareholders and metalworkers’ unions of the US company who favored a bid by Chicago-based firm Esmark. The announcement by CSN and Wheeling-Pittsburg had been widely expected by the industry. CSN is currently in a bidding war with Indian steelmaker Tata to win control of Ango-Dutch steelmaker Corus, with a sweetened bid worth $9.6 billion.

Colombia’s Compañía Nacional de Chocolates, the country’s largest food retailer, has agreed to buy Peruvian company Good Foods for $36 million. The acquisition will be carried out via Chocolates’ Peruvian unit and the company hopes to close the sale by February of next year. Chocolates aims to make its presence felt in the Peruvian market with the acquisition, which is the fifth in the region this year. The company plans to finance the acquisition via a bank loan.

Colombian retailer Almacenes Exito has secured a loan worth $300 million to finance its acquisition of rival retailer Carulla Vivero. The syndicated loan was arranged via a group of foreign banks led by JPMorgan Chase. Earlier this year, Exito agreed to buy a 77.5% stake in Carulla Vivero for $433 million.

Mexican operator Telmex has agreed to buy another two Colombian cable TV companies: TV Cable and Cable Pacífico. The acquisitions will add a further 195,000 subscribers in Bogota, Cali and Medellin. In September the Mexican operator paid over $30 million for Colombian cable operator Superview, which brought with it 125,000 subscribers.

Axtel, the Mexican telecom, is out with a $518 million financing for its acquisition of Avantel through Citigroup and Credit Suisse. A $208 million five-year term loan to refinance Avantel debt and a $310 million 18-month bridge are out to MLAs and the transaction should close early in 2007. The acquisition is slated to close this year. Citigroup is the indirect controlling shareholder in Avantel and is taking up to a 10% equity stake in Axtel.

Colombia’s Davivienda is out with a $250 million three-year acquisition facility through Credit Suisse, JPMorgan and Wachovia. The margin is 87.5bp in year one, 100bp in year two and 112.5bp in year three. Davivienda is buying Granbanco for around $900 million. Amortizations start in month 24.

Brazilian steelmaker Gerdau, via its Spanish subsidiary Sidenor, is to buy Spain’s GSB for $143 million from CIE Automotive. The acquisition is expected to close by year end. The move to buy GSB comes hot on the heels of an equity increase last week by Gerdau in Peru’s Empresa Siderúrgica del Perú (Siderperú). The Brazilian firm spent $40.5 million to buy a further 32.85% share and take control of 83.27% of Peru’s largest steelmaker. Earlier this year, Gerdau handed over $103 million for Sheffield Steel Corp of the US.

Brazilian steel producer CSN has jumped on the Latin M&A bandwagon with an $8 billion cash offer for British steel group Corus, trumping a bid made last month by India’s Tata Steel. The cash offer of 475 pence per ordinary share will be covered by existing resources and new debt facilities underwritten by Barclays, Goldman Sachs Credit Partners and BNP Paribas, CSN said. Otavio de Garcia Lazcano, CSN’s chief financial officer, said a large part of the financing would have no recourse to CSN. Lazard is lead financial adviser to CSN, while Goldman Sachs is financial adviser and joint broker, and UBS is joint broker. The combined CSN-Corus would create a top five global steel producer, according to the Brazilian acquirer. CSN indirectly owns 34 million Corus ordinary shares or 3.8% of the issued ordinary share capital of Corus. The CSN announcement follows a $12 billion Cemex bid for Rinker and CVRD’s $18 billion acquisition of Inco. M&A bankers say there is more to come in the short term from Latin America and predict a bumper 2007.