Latin Finance - March/April 2012 - 10

M&A

Brazilian Banks Lead Charge

Brazil’s ﬁnancial sector led the charge on the M&A front in February after the conclusion of two large acquisitions at home and abroad. Itaú Unibanco arguably made the largest splash after paying $8.85 billion to buy 49.985% of Redecard, the stake it didn’t already own. Although Barclays Capital noted that the deal’s return was less than the Selic’s 9% to 12% rate, it fell in line with the bank’s strategy of upping the competition with peers for a larger M&A Rank by Volume, Year to February 17 Meanwhile, Mexican corporates share of a sector that caters to small Itaú leads the pack continued to seek opportunities and medium sized businesses in the abroad. In early February, Mexican Rank Advisor Value $m # Deals region’s largest economy. chemical company Mexichem ﬁnally 1 Itaú BBA 7,623 5 This came as Brazilian investment closed the acquisition of Dutch pipe 2 JPMorgan 1,701 2 bank BTG Pactual ﬁnalized its much maker Wavin, for €531 million ($704 3 UBS 852 2 anticipated purchase of Chile’s Celﬁn million), after a tough negotiation. 4 BTG Pactual 841 6 in exchange for 2.42% of BTG and Mexichem, advised by Barclays and $245 million in cash, creating a 5 Credit Suisse 814 4 Citigroup, had to raise its o er twice ﬁrm with $69 billion in assets under 6 HSBC 801 1 to €10.5 per share with promises of management and a $28 billion 6 Goldman Sachs 801 1 no layo s before the Dutch agreed wealth management business. The 8 Banco Bradesco 777 3 to let Wavin go. The sale closed at bank is expected to continue its 9 Wells Fargo Securities 706 1 an implied enterprise value of 8.3x purchases in South America with an estimated 2012 Ebitda. 9 Stephens 706 1 eye on Argentina and Colombia. Mexico’s marketer of over-theTotal 17,295 229 Meanwhile, Santander, a Spanish counter pharmaceuticals Genomma, Source: Dealogic bank seeking to meet capitalization also made headlines by purchasing requirements at home, transferred US healthcare and cleaning products a 4.41% stake in its subsidiary M&A Rank by Fees, Year to February 17 company Prestige Brands Holdings Santander Brazil to the Qatari Credit Suisse excels in proﬁts for $891 million or $16.6 per share, government through a voluntary Rank Bank Revenue $m % Share and assuming $891 million in debt, a conversion of its $2.72 billion in 1 Credit Suisse 10 7.0 23% premium to the share price and bonds held by the Qataris. 2 UBS 9 6.0 an implied enterprise value of 9.5x Through the transaction, the Ebitda. 3 Itaú BBA 7 5.0 bank reduced its debt load as it looks Fresh from a number of 4 JPMorgan 4 3.0 to meet the EU’s 9% core capital ratio independent bottler acquisitions 5 BTG Pactual 4 6.0 requirement. Santander’s decision in a bid to gain scale and cut costs, to pare down assets in Latin America Total 49 34.0 Mexico’s Coca-Cola Femsa (KOF) came just weeks after the bank Source: Dealogic signed an exclusivity agreement with downsized 15 executives from its Coca-Cola to analyze the possible purchase of a Coke bottler in New York o ces. the Philippines. Though nothing has been signed yet, Moody’s Brazilian natural resource-related companies also ﬁgured analysts were not impressed by KOF’s eagerness to venture so prominently in M&A activity during the earlier part of 2012, far aﬁeld and warned that, metrics aside, a di erent geography, with Companhia Siderúrgica Nacional purchasing German steel culture and market dynamics could hurt KOF’s credit. producer Stahlwerk Thuringen from Spain’s Alfonso Gallardo Further south, Colombia’s Davivienda, one of the largest for €482.5 million ($636.6 million), enhancing its footprint in banks in the country, in late January purchased HSBC’s network Europe. of 136 bank branches in Costa Rica, Honduras and El Salvador for In the oil sector of South America’s largest economy, Chinese $801 million, or a 1.4x price to book, well below the levels seen energy companies continued to take advantage of opportunities in Colombia M&A deals over the previous 12 months. The deal in the Brazilian energy sector. In early January China’s Sinochem highlighted the strength of the Colombian ﬁnancial system which signed a farm-out agreement to buy a 10% stake in ﬁve Brazilian continues to attract buyers for banks and brokerage houses. LF o -shore blocks operated by Anglo-French oil company Perenco. The transaction allows Perenco to retain a 40% stake in the > UPDATE venture, with Brazil’s OGX Petroleo e Gas holding a 50% share of the project, while Sinochem provides the ﬁnancing to propel For daily M&A news, see www.latinﬁnance.com well investments forward.

On Brazil’s consumer front, the retail pharmacy business saw Brazil Pharma’s acquisition of Sant’Ana Drogaria Farmacias putting a price on the company of $288.3 million. The three-step acquisition involved the Sant’Ana purchase by Brazil Pharma’s subsidiary Farmais and an eventual absorption of Farmais into the larger company. The transaction meant a further expansion by the retailer after it acquired rival Big Ben for $259.4 million in late 2011.

Mexicans Venture Abroad

10 LATINFINANCE

March/April 2012
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Latin Finance - March/April 2012

Table of Contents for the Digital Edition of Latin Finance - March/April 2012
