Latin Finance - September/October 2014 - 10

NEWS
M&A

Bank and insurance company acquisitions grabbed attention
in a busy period for deal making. By Katie Llanos-Small

FIG deals surge
July and August proved busy
months for financial institution
acquisitions.
Some deals had been in the
works for a long time. ItaúUnibanco had been looking to
shift its major risks insurance
business for six months before
it announced a deal with New
York-listed Ace in early July.
Ace agreed to pay 1.52 billion
reais ($685 million) for the
acquisition of the property and
casualty insurance business for
large corporations in Brazil.
The deal, which is subject
to regulatory approval, will
make Ace the largest property
and casualty insurer in Brazil,
said Ace.
BTG Pactual, which first
signaled interest in buying
Generali's Swiss private bank
BSI in May, agreed the deal in
mid-July. The 1.5 billion Swiss
franc ($1.68 billion) acquisition
will nearly double the
Brazilian firm's assets under
management.
The deal came a few days
after BTG Pactual agreed to
buy property and casualty
reinsurer Ariel Re from Global
Atlantic. The price tag for the
London and Bermuda-based
property catastrophe reinsurer
was undisclosed.
The Brazilian bank
embarked on another
acquisition a month later,
saying it would buy the
insurance business of Banco
Pan for 580 million reais ($257
million). BTG Pactual owns
34.1% of Pan.

In Honduras, Banco
Ficohsa said it was considering
further acquisitions in
Central America after closing
the purchase of Citibank's
consumer banking business in
the country. The deal, agreed
in April, makes Ficohsa the
largest bank in Honduras with a
loan book of $2.7 billion.
In other sectors, US
healthcare firm Abbott
launched a tender offer
in late August for the
outstanding shares in Chilean
pharmaceutical company
CFR. Abbott has agreed to buy
around 72.62% of CFR's shares
directly from the controlling
shareholder, and said in May
it would launch a public offer
for the remainder. The public
tender offer could be worth as
much as $826 million.
The bid came shortly
after UK pharmacy operator
Alliance Boots closed
its public tender offer for
Farmacias Ahumada
(FASA) on the Santiago Stock
Exchange. Alliance Boots
bought 99.39% of the 1.5
billion shares outstanding at
5.5162 Mexican pesos ($0.42)
apiece, after striking a deal
with Mexico's Casa Saba, which
owned FASA.
Brazilian food producer
JBS has agreed to buy two
poultry processing plants from
Céu Azul Alimentos for 246
million reais ($111 million). It
is buying the plants through
Seara Alimentos, which is
owned by JBS Foods.

10 L ATINFINA NCE.COM - September/October 2014

M&A rank by volume, year to August 26, 2014
Goldman Sachs wins by volume
Rank

Advisor

1
2
3
4
5
6
7
8
9
10

Goldman Sachs
BTG Pactual
Citi
BofA Merrill Lynch
Credit Suisse
Itaú BBA
Deutsche Bank
Morgan Stanley
Rothschild
UBS
Total

Value $m

# Deals

20,200
18,780
18,289
16,374
14,438
14,274
11,988
10,319
9,063
7,188

13
27
11
11
17
45
6
15
8
2

100,371

931

Source: Dealogic

Singaporean sovereign
wealth fund GIC bought
18.5% of Brazilian education
firm Abril Educação.
The acquisition value was
undisclosed but is likely to have
come at around 600 million
reais ($265 million), based on
the company's share price at
the time.
Creditors to Lacteos
Brasil (LBR) approved a bid
from Parmalat to buy units
producing cheese and long-life
milk. Parmalat is to pay 250
million reais ($109.77 million)
for the LBR units which had
proforma revenues of 580m
reais in 2013. The deal comes
after years of negotiations:
the pair was heard to be in
discussion over a potential
merger in 2011. Parmalat said a
year ago that it would abandon
talks to acquire LBR, as the
"conditions for completing
this transaction cannot be
satisfied".

Grupo Bio Pappel, which
owns Mexico's largest paper
maker, agreed to buy rival firm
Scribe. The target is valued at
around $700 million, although
Bio Pappel said that sum did
not reflect the likely cost of the
acquisition.
Norwegian fertilizer firm
Yara is planning to expand
its production capacity in
Latin America organically and
through acquisitions, after
agreeing to buy a 60% stake in
Brazilian company Galvani
Indústria, Comércio e
Serviços, for $318 million.
"If you look at our most
recent acquisition, what that
potentially does is also grow
us on the upstream side, the
production side," Egil Hogna,
Yara's head of downstream,
said. "We have a strong wish
to develop and become an
integrated company, becoming
as strong in production as in
distribution." LF


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Latin Finance - September/October 2014

Table of Contents for the Digital Edition of Latin Finance - September/October 2014

Table of Contents
Latin Finance - September/October 2014 - Cover1
Latin Finance - September/October 2014 - Cover2
Latin Finance - September/October 2014 - Table of Contents
Latin Finance - September/October 2014 - 2
Latin Finance - September/October 2014 - 3
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