Category: M&A

Brazilian iron-ore producer Companhia Vale do Rio Doce (CVRD) announced Friday it now owns 100% of the common shares of CVRD Inco, the newly formed entity resulting from the amalgamation of Canadian nickel miner Inco. Under the amalgamation, which was effective on January 4, holders of Inco common shares received, for each such share held, one Class A redeemable preferred share of CVRD Inco. Inco’s common shares were de-listed from the Toronto Stock Exchange at the close of trading Friday and will no longer be traded on any stock exchange. “CVRD Inco has applied to cease to be a reporting issuer under Canadian securities laws and has suspended its reporting obligations under United States securities laws”, the company added.

Argentine infrastructure company Benito Roggio has completed its acquisition of a 51% stake in Aguas Cordobesas, the Córdoba province water company, from French utility Suez France and Spain’s Sociedad General Aguas de Barcelona (Agbar). As part of the deal Suez and Agbar will drop a $108 million lawsuit against the Province filed in the World Bank’s International Center for the Settlement of Investment Disputes.

Anglo-South African brewer SABMiller is reorganizing its businesses in Ecuador. On Thursday, the company announced the results of its tender offers for shares in its three Ecuadorian subsidiaries and the approval of a merger between two of the entities. SABMiller said that acceptances were received from 62%, 58% and 78% of the non-SABMiller holders of CCN, Andina and Agrilsa shares, respectively, following the company’s tender offers in late October to buy shares at $36.25 per share. This means that SABMiller’s effective interest has increased to 96% in CCN, to 85% in Andina and to 97% in Agrilsa. The total cash consideration paid to non-SABMiller shareholders as a result of the offers was about $54 million. The brewer now plans to merge CCN and Andina.

Colombia’s anti-trust regulator has approved the merger of the country’s top two retailers, Almacenes Exito and Carulla Vivero, although the newly merged entity must sell 11 of their 256 stores and comply with certain terms laid out by the regulator. In August, Exito agreed to buy a 77.5% stake in Carulla Vivero for $433 million. Exito subsequently became a target itself when Chilean retailer Cencosud announced, earlier this month, it had agreed to buy at least 24.5% of the Colombian retailer.

Commitments are due this week for CVRD’s $5 billion two-tranche pre-export loan, part of the takeout of an $18 billion financing for the acquisition of Inco. The deal via ABN AMRO, Credit Suisse, Santander and UBS had almost $10 billion in commitments as of December 20 and the borrower is considering an upsize. It is split 75% in a five-year paying 62.5bp over Libor, and a seven-year at 75.0bp. The deal will leave CVRD with around $3 billion left to take out of the two-year bridge, which has also been refinanced in the local and dollar bond markets. The margin on the $18 billion acquisition bridge was 40bp over Libor in year one and 60bp in year two on a ratings grid. The leads each ended up with $795 million tickets. Senior MLAs got $725 million allocations, scaled back from $1.5 billion commitments. They were Bank of Tokyo-Mitsubishi UFJ, BNP Paribas, Bank of America, Bradesco, Calyon, Citigroup, HSBC, JPMorgan and Scotiabank. Mandated lead arrangers (MLAs) ended up with $480 million versus $1 billion commitments. The deal wraps up a heavy year for the Latin American bank market. Bankers report a full pipeline for 2007.

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.