LatinFinance - November/December 2016 - 10

NEWS
EQUITY/M&A

After a long wait, some of the region's largest equity and M&A
trades have finally arrived. By Aaron Weinman

Mexico, Brazil take off
Equity capital markets came
back to life in September, giving
observers hope that a backlog
of deals might finally start to
clear.
Brazil's change in
government was understood
to offer confidence for several
equity issuers to push ahead
with long-awaited plans.
Brazilian software provider
Linx raised 444 million reais
($137.8 million) in a follow-on
offering, while meatpacker
BRF Foods is poised to list its
Sadia Halal unit in London and
the United Arab Emirates.
"Brazil's had this pipeline
sitting and waiting patiently for
so long now," a São Paulo-based
banker says. "Now that market
conditions are in place - the
new government is favorable to
investors - expect these deals
to come through."
Brazilian transmission line
company Taesa was due to sell
shares in October as controlling
shareholder Companhia
Energética de Minas Gerias
looked to lower its stake.
"A lot of the Brazilian
public sector units want to
decrease debt," the banker
adds. "Raising capital and
placing it into different areas
of investment is now a viable
option."
In Mexico, IEnova finally
moved ahead with an equity
follow-on offering that could
raise over $1 billion. The energy
infrastructure company met
investors in October in the US
and Latin America, with pricing

scheduled for late October.
It hasn't all been smooth
sailing however. Becle, the
holding company that makes
José Cuervo, pushed plans to
list its tequila company to late
November.
Becle filed in late September
for a global equity offering,
but delayed the listing in early
October because it needed to
refile its financial statements
with the Mexican regulator.
Investors were also said to be
spooked about a capital raising
just before the US Presidential
election, with heightened
uncertainty over policy if
Republican candidate Donald
Trump were to win.
"If things go south with
a Trump victory, then this
offering may not pan out the
way the company may have
liked," says one observer.

The big ticket

In mergers and acquisitions, US
power company Duke Energy
agreed to deals to sell its LatAm
holdings for around $2.4 billion
in early October.
China Three Gorges
Corporation agreed to take
Duke's Brazilian holdings
for $1.2 billion cash and
assumption of debt. I Squared
Capital, a specialized energy
investor, meanwhile, paid
the same amount for Duke's
businesses in Peru, Chile,
Ecuador, Guatemala, El
Salvador and Argentina.
Despite not reaching the
$3 billion price tag some

10 L ATINFINA NCE.COM - November/December 2016

M&A rank by volume, year to October 11
Itaú steps up
Rank

Advisor

1
2
3
4
5
6
7
8
9
10

Itaú BBA
BofA Merrill Lynch
BTG Pactual
Bradesco BBI
Credit Suisse
Morgan Stanley
Deutsche Bank
Santander
JPMorgan
Tyndall Group
Total

Value ($m)

# Deals

28,571
23,226
19,426
18,253
16,408
14,578
11,917
11,848
11,362
10,504

34
13
23
17
14
11
6
13
11
4

88,211

819

Source: Dealogic

speculators had suggested
ahead of the deals' agreement,
the sales still constitute some of
the region's biggest this year.
In another pair of hotly
awaited trades, Citi reached
a deal to sell its retail banking
operations in Argentina and
Brazil.
Itaú Unibanco agreed
to buy Citi's Brazilian retail
portfolio, with the equivalent
of $2.8 billion in assets, for 710
million reais ($220 million). In
Argentina, Banco Santander
Rio has agreed to buy Citi's
retail business, with $1.4 billion
in assets, for an undisclosed
price.
Both deals
remain
subject to For daily news on
equity and M&A, visit
regulatory latinfinance.com
approval.

Citi is also heard to be close
to reaching a deal on the
sale of its Colombian retail
business. The divestments
represent the tail end of a
strategy first announced in
2014 for the US bank to exit
many of its retail businesses
in LatAm in a bid to focus on
corporate and investment
banking and its Mexican
operations.
Elsewhere, Brazilian energy
firm Petrobras in September
went a long way to meeting its
ambitious $15.1 billion 20152016 asset divestment target,
making its biggest sale yet.
The company agreed
to sell pipeline system
Nova Transportadora do
Sudeste to a consortium
led by Brookfield for $5.19
billion. LF


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Table of Contents for the Digital Edition of LatinFinance - November/December 2016

Contents
LatinFinance - November/December 2016 - Cover1
LatinFinance - November/December 2016 - Cover2
LatinFinance - November/December 2016 - Contents
LatinFinance - November/December 2016 - 2
LatinFinance - November/December 2016 - 3
LatinFinance - November/December 2016 - 4
LatinFinance - November/December 2016 - 5
LatinFinance - November/December 2016 - 6
LatinFinance - November/December 2016 - 7
LatinFinance - November/December 2016 - 8
LatinFinance - November/December 2016 - 9
LatinFinance - November/December 2016 - 10
LatinFinance - November/December 2016 - 11
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