Category: M&A

Grupo Mexico SA, the country’s largest copper producer, could spend as much as $6 billion on new acquisitions as high world copper prices fill its treasury, according to Chief Financial Officer Eduardo Gonzalez. The company plans to use a mix of new debt, cash and shares to finance any purchase. The copper producer defaulted on $450 million in debt in 2001 because of low world prices and currently has an outstanding debt of $1.72 billion. Gonzalez, however, stressed the company will be very careful with its purchase that could be for as little as $500 million.

Colombian Cementos Argos, Latin America’s fifth-largest cement producer, has agreed a third acquisition in the US market. Argos has agreed to buy Ready Mixed Concrete Company (RMCC) from US private equity firm Audax Group for an enterprise value of $435 million. The deal represents the largest investment into the US by a private Colombian company. Last year Argos bought two US companies – in Texas and Arkansas. RMCC is the leading provider of ready-mixed concrete in North Carolina, South Carolina, and southern Virginia, producing approximately three million cubic yards of concrete annually. It was acquired by Audax in 2004. Cementos Argos is owned by Colombia’s largest conglomerate, GEA. Argos currently supplies 9% of all cement imported into the US. Citigroup Corporate and Investment Banking acted as exclusive financial advisor to Audax and RMCC.

Canadian Scotiabank yesterday, Thursday, completed its acquisition of Peruvian bank Sudamericano when it bought 65% of Sudamericano’s shares for $62.4 million in a block trade on the local stock exchange to give it 100% control of the institution. It also got the nod from Peruvian regulators to take over the country’s third-largest bank, Banco Wiese Sudameris, from Italy’s Banca Intesa for $265 million. Scotiabank plans a merger to create a new bank with 80% held by the Canadian bank and the remaining 20% by Banca Intesa.

Grupo Primex, the leading Mexican manufacturer of PVC resins and subsidiary of mining, chemical and petrochemicals group Mexichem has completed the acquisition of US chemicals company Bayshore Group based in New Jersey. The purchase of the US company, which focuses on PVC compound manufacturing for the construction industry, means that Primex will become a US producer and will be able to grow its North American business through further acquisitions.

Camargo Corrêa, one of Brazil’s largest industrial conglomerates, has raised $453 million in the syndicated loan market towards financing its $1 billion acquisition of Argentine cement maker Loma Negra. Bank Boston, HVB and WestLB successfully arranged the standby letter of credit facility (SBLC), placing it with a consortium of 11 banks. The SBLC guarantees an annual payment obligation from Camargo Corrêa to Loma Negra’s sellers. The transaction marks the first time Camargo Corrêa has issued debt in the international syndicated loan market.

Peruvian energy generators Edegel and Etevensa, both controlled by Spanish utility company Endesa SA, have agreed a merger to form a new entity with assets worth $1.4 billion. Edegel is the country’s largest private electricity producer; Etevensa is the first combined cycle plant in the country, using natural gas from the Camisea project.

The shareholders of Colombian finance group Corporación Financiera Colombiana (Corficolombiana) have approved a merger with rival investment banking company Corporación Financiera del Valle (Corfivalle) to form a new entity with $2 billion worth of assets. The majority shareholder of both groups will be Colombian businessman Luis Carlos Sarmiento. The country’s financial sector has undergone extensive restructuring since the banking crisis of 1998 to 2001.

Cemex, the Mexican cement giant, posted a 125% increase in sales in the second quarter to $4.4 billion. The rise was attributed to the acquisition of RMC of the UK earlier this year. Operating income rose 60% to $751 million. However, EBITDA margins decreased to 22.6% from 32.6%, pressured by higher energy costs and charges at RMC.