Latin Finance - March/April 2009 - 10

M&A acted as financial advisor to Centenario. Elsewhere, Brazilian toll-road operator CCR has agreed to acquire a 45% stake of vehicle inspection company Controlar for LatAm M&A has been most active in the energy and mining industries, with some deals even surpassing the $1 billion mark. 121 million reais from the family-owned CS Participações. The majority of transactions are being done in cash or stock, Controlar operates the vehicle-in-use inspection and maintenance and most sellers are seeking to pay down debt with proceeds. In program in São Paulo through 2018, which CCR says it expects to addition, companies in the telecom, retail and banking be expanded to other cities. industries have also indicated they are working on deals to sell In a move that further consolidates Brazilian homebuilding, or acquire assets. Agra says it will acquire alongside its co-investor Veromonte Colombia’s Ecopetrol and Korea National Oil Corp (KNOC) Participações, a 62.13% stake in competitor Abyara. The all share have acquired Offshore International Group, a Houston-based deal is estimated at some 38 million reais. IPU Participações, the company whose main asset is Petro-Tech Peruana, for $900 million venture 70% held by Veromonte and 30% by Agra, will buy 31.6 in cash. Each buyer is acquiring a 50% stake. Ecopetrol and KNOC million shares in Abyara at 1.20 reais per share to own 62.13% of say they intend to double Petro-Tech’s the target. production in three years. Petro-Tech “This represents a sharp discount M&A Rank by Volume, Year to February 20 produces 12,000 barrels of oil per day. (41%) to Abyara’s current share price,” Three-way tie at the top Ecopetrol, with BHP Billiton, has according to Itaú Securities. Abyara also increased its stake in offshore has also had to restructure its debt Rank Advisor Value $m # deals blocks Fuerte Norte and Fuerte Sur, at with local banks. Of the company’s 430 1 Rothschild 2,000.00 1 undisclosed terms. As part of the deal million reais debt load, 300 million 1 JPMorgan 2,000.00 2 BHP will assign to Ecopetrol 25% of its reais come due this year. The plan is to 1 Deutsche Bank 2,000.00 1 stake in the blocks, resulting in each lower that amount to some 180 million 4 UBS 1,931.13 2 company having a 50% share. reais and extend duration. 5 Banco Fator 1,851.40 1 Ecopetrol could also end up taking 6 BofA-Merrill Lynch 228.05 1 over Glencore’s 51% stake in a 7 Bulltick 130.00 1 Cartagena refinery, according to an Many other deals are in the works. 8 HSBC 92.56 1 announcement by Colombia’s ministry Brazil’s TIM Participações has 9 RBC Capital Markets 79.72 1 of mines and energy. The expansion confirmed in a letter to the CVM that it 10 Credit Suisse 65.48 2 plan is estimated to cost about $4 is in preliminary talks with Intelig Subtotal 4,447.22 9 billion. The ministry says Glencore will Telecomunicações regarding a Total 9,342.00 100 not be able to finance its part of the potential acquisition of its assets, but Source: Dealogic deal and may have to pull out. says that no deal has yet been reached. Ecopetrol says it has the option of first Credit Suisse says that buying Intelig, refusal to acquire Glencore’s stake, but that no decision has been which has a fiber optic backbone that reaches the main cities in made. Glencore says it paid $656 million for its stake in the refinery Brazil, could be a positive move for TIM, depending on price. in 2006. Brazil’s Petrobras offered $595 million for the stake. “If we assume net revenues of 600 million reais and Ebitda of Elsewhere, Brazilian builder Camargo Correa has agreed to 120 million reais for Intelig, then we believe the price for Intelig buy the 50% it does not already own in VBC Energia from Grupo could be around 500 million reais,” the shop says. However, it adds Votorantim for 2.56 billion reais. VBC is a holding company which that the market may have misgivings about TIM increasing its leverage under current market conditions, as it had net debt of 2.7 has a 28% stake in electric generator CPFL. Votorantim has been selling assets and maneuvering to cut costs since writing down 2.2 billion reais at the end of September. billion reais last year in derivatives losses. And Colombia’s leading retailer Almacenes Exito says it is in conversations with Colombian supermarket, school supply and pharmacy chain Caja de Compensación Familiar (Cafam), Brazilian miner Vale is paying $1.6 billion for two assets belonging regarding a potential alliance. In Venezuela, the government seized the local offices of to Rio Tinto. It will pay $750 million for an iron ore open pit operation in the state of Mato Grosso do Sul, called Corumbá, and Stanford Bank and says it will quickly sell the operations in an auction that as of press time did not have a set date. It does say, $850 million for a potash mining project in Argentina’s Río however, that several potential buyers have shown interest. The Colorado region. The assets are being paid for with cash. Completion of the Corumba transaction is subject to regulatory SEC in mid-February accused Allen Stanford of presiding over an $8 billion fraud, which has reportedly had a significant impact on approvals, but none are required for the potash transaction, Rio Venezuelan investors. LF says. Rio has been selling assets to reduce debt by $10 billion by the end of this year. Meanwhile, Canada’s Quadra Mining is buying Centenario UPDATE > for about $57 million Canadian dollars. Macquarie Capital For daily M&A news see www.latinfinance.com Markets was financial advisor to Quadra. Canaccord Capital Energy and Mining Focus In the Works Miners Go Shopping 10 LATINFINANCE March/April 2009

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Latin Finance - March/April 2009

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