Latin American M&A activity went into full swing in June with a string of deals across the region, highlighting strong appetite for assets from oil and gas to food production and power generation.
Mexico’s Grupo Alfa and Canada’s Harbour Energy agreed to buy Pacific Rubiales in June in a deal that values the oil company at 2.05 billion Canadian dollars ($1.68 billion). The deal faces strong opposition from a group of minority shareholders said to have a 19.82% interest in the company.
CorpBanca’s shareholders approved a revised deal to merge their bank with Itaú Chile, putting an end to a dispute over the terms of the transaction. The pair agreed to merge their banking businesses in Colombia and Chile last year, but they had to modify the terms of deal in June after CorpBanca complained that the original agreement overvalued the size of Itaú Chile.
The food sector has been particularly active. JBS bought UK-based chicken producer Moy Park from Marfrig for $1.5 billion. The transaction is part of JBS’ drive to increase its geographic diversification, as it gives it greater access to the European market. The divestment will allow Marfrig to strengthen its capital structure and to focus on beef exports to Asia and the US, its core markets.
Grupo Alfa has complete ownership of Spain’s cold-cut meat producer Campofrio after buying 37% of the shares from WH Group for $354 million, while Mexico’s Grupo Bimbo inked a preliminary agreement to buy breadmaker Panrico, which operates in Spain and Portugal, from private equity firm Oaktree Capital.
Activity in Brazil also picked up. Saraiva sold its education and content editorial business, Saraiva Educação, to Abril Educação for 725 million reais ($237 million), in a bid to improve its capital structure. Spain’s Ezentis bought 100% of Ability Tecnologia e Serviços for €55.4 million ($62 million). Cemig’s subsidiary Renova Energia sold 1.61 billion reais ($533 million) in assets to SunEdison’s TerraForm Global.
The US energy company also bought Globeleq Mesoamerica Energy, a Central American renewable energy producer for $326.4 million from two private equity funds. Actis, a global EM energy-focused private equity fund and Mesoamerica Power were the sellers of 70% and 30% stakes, respectively.
Colombian conglomerate Grupo Argos bought 25% of Odinsa for 465 billion Colombian pesos ($183 million), following a heavily-subscribed tender offer. Argos had offered to buy between 20% and 25% of the engineering company for 9,500 Colombian pesos per share, after acquiring a 24.8% stake in mid-April.
Canada’s Aecon signed an agreement to sell its 45.5% interest in Quito International Airport (Quiport) to Colombia’s Grupo Odinsa and Brazil’s CCR for $233 million. The deal leaves the buyers with 50% each of the airport project.
Mexican equity shines
In Mexico, equity markets came back to life, with four transactions pricing in the country in May and June.
Unifin raised 3.14 billion pesos ($206 million) through the first IPO from a Latin American company in 2015, pricing the deal slightly above the mid-point of the target range. The financial company sold 112 million shares at 28 pesos each, after issuing a target range of 25 to 30 pesos. The deal was said to be strongly oversubscribed.
Gicsa followed suit when it raised 7.2 billion pesos ($464 million), in an all-primary listing that was priced at the lower end of the 17 to 21 pesos price target. The company sold 368 million shares, as planned in the base deal.
Real estate investment trust Fibra HD raised 1.57 billion pesos ($100 million), including overallotment options, in the third Mexican IPO this year. The real estate investment trust sold the certificates at 10 pesos apiece, in line with price indications issued ahead of the transaction. The offering was for Mexican investors only and was very well subscribed, LatinFinance heard.
An IPO for autopart maker Nemak came in at the lower end of the 20 to 23 peso target range, raising 12.36 billion pesos in the primary transaction. LF