LatinFinance - March/April 2014 - 12

NEWS
M&A

Itaú advanced its expansion bid in Latin America through a merger
with Chile's CorpBanca, while CFR Pharmaceuticals pulled a chunky crosscontinental bid. By Katie Llanos-Small

Itaú branches out
after months of negotiation,
Brazilian lender ItaúUnibanco and chile's
CorpBanca finally agreed a
merger in late January that
has given the Brazilian bank
a stronger hold in andean
markets. itaú will merge
its chilean and colombian
operations with corpBanca,
partially owned by chilean
billionaire Álvaro Saieh's
corpGroup, in a deal that will
make itaú the fourth largest
bank in chile, and give it a
strong position in colombia.
the deal follows extended
conjecture over a possible deal,
with BBVa thought to also be
bidding for the corpBanca
assets. for the Brazilian bank,
the deal is an important legup, Ricardo marino, executive
vice president and head of itaú
latin america, said.
"We have the vision of
becoming a global latin
american bank and with the
partnership with the Saieh
Group we can explore together
opportunities of increasing
market share, not only in
colombia and chile, but also in
Peru and central america," he
told LatinFinance.
once the merger deal is
approved, itaú would consider
further acquisitions in chile
and colombia, marino said.
Under the shareholders'
agreement, which forms the
basis of the merger between
itaú and corpBanca in chile
and colombia, the Saieh Group
also has the option to take a

stake in itaú's Paraguayan and
Uruguayan operations. But
marino said a foray into mexico
would only take place under
the domestic brand: "if we
go to mexico, we'll go as itaúUnibanco only."
He was clear that itaú would
not seek to raise capital from
shareholders or the market as it
advances its expansion plans.
latin america's other longbrewing, large-scale acquisition
- a bid for South african
drugmaker Adcock Ingram by
chile's CFR Pharmaceuticals
- was not to be, however. the
chilean formally abandoned
its offer in early february
after a drawn-out negotiation
process since it first proposed
the acquisition in July. a
consortium led by South
african conglomerate the
Bidvest Group bought 34.5%
of adcock at 70 rand ($6.33)
per share in January and finally
ended the prospect of a chilean
takeover. cfR would not have
the 75% majority needed for its
bid to go through, the chilean
firm said. cfR had raised its bid
twice in response to Bidvest's
advances.

Isagen bidding
heats up

meanwhile, competition for
colombian power generator
Isagen intensified in february,
as the second round of its
privatization advanced.
the government is selling a
57.7% stake in the firm, with
domestic and international

12 l atinfina nce.com -March/April 2014

M&A rank by volume announced, Jan-Feb 26, 2014
Itaú dominates
Rank

Advisor

1
2
3
4
5
6
7
7
9
10

itaú BBa
morgan Stanley
Bofa merrill
credit Suisse
Goldman Sachs
Rothschild
RBc capital markets
centerview Partners
BtG Pactual
JPmorgan
Total

Value $m

# Deals

6,859
3,110
2,977
2,928
2,323
1,780
1,655
1,655
890
852

11
4
4
3
2
2
1
1
4
1

15,818

186

Investment banking fees revenue, Jan-Feb 26, 2014
Credit Suisse takes most
Rank

Bank

1
2
3
4
5

Credit Suisse
Itaú BBA
Citi
BTG Pactual
Bofa merrill
Total

Revenue $m

% Share

21
13
12
12
10

13.8
8.3
7.9
7.8
6

152

100.0

Source: Dealogic; Includes M&A, ECM, DCM and loans fee revenue

energy firms understood to be
bidding. Empresa de Energia
de Bogotá criticized what
it said were "exorbitant and
unprecedented" requirements
for it to make a bid.
another colombian,
Grupo Argos, pulled out of
the bidding, saying that, at the
3,178 peso ($1.55) per share
price the finance ministry is
seeking, the returns on offer
would not be high enough.
international firms including
Duke energy and GDf Suez are
understood to also be looking

at bidding for the isagen stake.
in the first privatization round,
6% of isagen was offered to
retail investors, but drew scant
interest.
in Brazil, Rumo Logistica, a
subsidiary of local conglomerate
Cosan, agreed a merger with
América Latina Logística
(all) after several months
of negotiations. Rumo
shareholders will hold 36.5%
of the new company and all
shareholders, 63.5%. cosan
will appoint the majority of the
board of directors. LF

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LatinFinance - March/April 2014

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