Latin Finance - September/October 2009 - 10

M&A Chinese companies have also been on the lookout for LatAm energy assets. For instance, industry bankers conﬁrm that Chinese The cement industry has taken center stage in M&A activity, oil companies China National Petroleum Company and China with local players buying exiting European ﬁrms’ assets. In National O shore Oil Corporation have been after a 75% stake in late July, France’s Lafarge sold its Chilean cement, aggregates Repsol’s YPF unit in Argentina. It is rumored that they have o ered and concrete assets to Peru’s Brescia Group for $555 million up to $17 billion for the stake, but the parent company in Spain enterprise value, equal to 7.4x 2008 Ebitda. Chile-based denies the reports. analysts say the price paid for the package 84% owned by One deal that is going through is Sinochem’s acquisition of Lafarge Chile is fair to cheap. UK-listed Emerald Energy for 750 pence per share, or £532.1 A Santiago-based equity analyst covering similar million, in cash. The acquisition will industries, who asks not to be identiﬁed, says that a 2004 sale of M&A Rank by Volume, Year to August 18 give Sinochem Emerald’s Colombia operations, which include more than 10 Chile’s SQM’s 14.05% share in Lafarge BofA-Merrill joins top 10 onshore ﬁelds. London-based Harland predecessor Empresas Melon for Rank Advisor Value $m # deals Capital is advising Emerald. $69 million, was about 7.2x Ebitda. 1 UBS 11,232.70 12 Elsewhere, in mid-July Philip Morris However, another Chile-based 2 Morgan Stanley 10,983.50 9 International, the maker of cigarette analyst notes that other recent LatAm 3 Credit Suisse 10,504.80 15 brands including Marlboro, said it is transactions in the construction acquiring Productora Tabacalera de industry have been done at closer 4 JPMorgan 9,898.75 19 Colombia (Protabaco) for $452 million. to 8x-10x Ebitda. In May, Lafarge 5 Citi 8,744.44 11 A Philip Morris spokesman says the o er announced it sold similar assets in 6 Bradesco 7,271.49 12 is in cash and declines to disclose names Turkey for €163 million, or 10x Ebitda. 7 BofA-Merrill 5,894.08 5 of ﬁnancial advisors. Celﬁn advised Brescia and 8 Rothschild 5,021.05 6 Protabaco, says the buyer, has a Rothschild worked with Lafarge, which 9 Santander 2,820.69 5 31.8% market share and net revenues of has been in Chile since 2001 through 10 Deutsche 2,522.60 5 about $107.6 million in 2008, making it Lafarge Chile and Immobiliaria San Subtotal 31,181.69 68 the second largest tobacco company in Patricio. The assets sold include the La Total 49,221.48 518 Colombia. Its brands include Mustang, Calera cement plant, located around Source: Dealogic Premier and President. 100 kilometers from Santiago with a This is not Philip Morris’ ﬁrst foray capacity of 1.5 million tonnes, along into Colombia. In 2005, it bought with the Puerto Montt grinding station M&A Rank by Fees, Year to August 18 Coltabaco from Grupo Empresarial in southern Chile, which has a capacity Credit Suisse makes the top Antioqueño for about $400 million. It of 300,000 tonnes. Rank Advisor Revenue $m % Share had a 48% stake in the local market at Lafarge is also selling 54 ready-mix 1 Credit Suisse 30.14 19.29 the time. concrete units, ﬁve aggregates quarries, 2 Citi 21.22 13.59 an import terminal and a mortar 3 JPMorgan 15.72 10.06 production unit. The transaction is part 4 Morgan Stanley 13.42 8.59 In early August, São Paulo-based vehicle of Lafarge’s announced 2009 €1 billion parts maker Iochpe-Maxion agreed 5 Rothschild 12.50 8.00 divestment program, which was 75% to acquire the Brazil, Mexico and US complete as of July. 6 BofA-Merrill 10.90 6.98 wheels business of Michigan-based About a week later, Colombia’s 7 UBS 7.77 4.97 autoparts supplier ArvinMeritor for $180 Cementos Argos acquired Holcim’s 8 Banco Itaú 7.06 4.52 million. The deal is being ﬁnanced with assets in Panama, the Dominican Subtotal 156.21 100.00 a loan of up to 400 million reais from Republic, Haiti, St. Thomas, St. Total 156.21 100.00 a group of banks that includes Banco Maarten, Antigua and Dominica for Source: Dealogic Votorantim, the lead on the ﬁnancing, as $157 million in cash, according to well as Itaú, Bradesco, Banco do Brasil Ricardo Sierra, Argos’ ﬁnance vice and Santander, according to a person familiar with the trade. president. “We don’t require ﬁnancing. We had already raised The company declined to specify terms of the ﬁnancing to enough cash through divestments made early this year,” the analysts, but characterized the facility as long term. Closing o cial tells LatinFinance. is expected on or before September 23, says Iochpe. “This He adds that the deal was handled in-house and that it used is an important acquisition, as the acquired assets reached, no external advisors. The price Argos paid was about 1.6x net in ArvinMeritor’s most recent ﬁscal year . . . net revenues of 2008 sales. Holcim says that the assets had net sales of $98.4 approximately $325 million, compared with $990 million net million in 2008. Tobias Woerner, an analyst at London-based revenues for Iochpe in 2008,” says Itaú Securities. JPMorgan MF Global, says that what Argos is paying is “reasonable.” He advised ArvinMeritor. Iochpe appears not to have engaged an adds that when Cemex sold its Australian assets to Holcim, the outside advisor. LF buyer paid 1.1x net sales. Cement Firms Gel Chinese Lurking Wheeling and Dealing 10 LATINFINANCE September/October 2009

Latin Finance - September/October 2009

Table of Contents for the Digital Edition of Latin Finance - September/October 2009