Category: M&A

Brazilian low-cost airline Gol is to increase its share capital by $255 million (518 million reais) to pay for its acquisition of rival domestic carrier Varig. The company will issue of 8.519 million preferred shares at a price of 60.81 reais per share. Last month Gol announced it had agreed to buy the rescued airline in a deal worth $320 million. It said then it would finance the acquisition through cash and shares and would take on Varig’s debentures.

A $1.5 billion acquisition loan for Tenaris to acquire US tube maker Hydril is set to be flexed down thanks to strong investor interest. According to the deal terms, if oversubscribed by 25%-50%, pricing falls 2.5 basis points, for 50%-75% oversubscription, it drops 5 basis points, and 75%-100% excess demand results in a 7.5 basis point reduction, according to a banker not on the deal. A doubling of the book or more will result in a 10 basis points drop. Demand is heard already exceeding the first bracket. The deal has three tranches: a $1 billion 2-year at 40 basis points over Libor for Tenaris, a $200 million 5-year at 50 basis points over Libor; and a $300 million Hydril loan, also at 50 basis points. Citi is the lead arranger.

The proposed acquisition of an indirect capital stake in 12% of Telecom Italia by US telco AT&T and Mexican operators Telmex and América Móvil could cost the companies around $3.5 billion and $1.8 billion each, respectively, according to Moody’s Investors Service commenting on the announced stock purchase. On April 1, the companies revealed they had entered into exclusive negotiations with Italian firm Pirelli to acquire two-thirds of the share capital of Italian company Olimpia, which owns 18% of the ordinary shares of Telecom Italia.

Colombia’s largest financial institution, Bancolombia, has secured loans totaling $590 million as part of the financing for its acquisition of El Salvador’s Banagrícola. The loans, from foreign banks, will be used for the purchase of foreign currency loans of Bancolombia (Panamá), said the bank in a press release. Bancolombia bought Banagrícola last December for around $900 million. Earlier, the bank issued a statement saying that it had obtained all the necessary authorizations for the acquisition. The public tender offers are expected to be initiated in Panama and El Salvador in the next few days.

Colombia’s largest financial institution, Bancolombia, is planning to issue more ADRs in New York to help finance its acquisition of El Salvador Grupo Financiero Banagrícola. Earlier this year the bank proposed issuing 60 million preferred shares with non-voting rights to raise an estimated $440 million. Bancolombia bought Banagrícola last December for around $900 million.

Coca-Cola has added to its portfolio of Brazilian beverage companies with the acquisition of tea producer Leão Junior. The company is a leader in the ready-to-drink tea market with well-known brand Matte Leão. The purchase by Coca-Cola, for an undisclosed sum, follows the acquisition late last year of a 50% stake in juice-maker Del Valle, with Mexican bottler Femsa, for $470 million.

Brazilian telcoms regulator Anatel has blocked the acquisition of local cable and internet company Way Brasil by Brazil’s largest telco Telemar. Anatel said Telemar would contravene its fixed-line telephone concession contract if it offered cable TV services in the same regions. The purchase would have given Telemar a foothold in the country’s paid TV market. The telco offered $62.5 million via its mobile phone subsidiary Oi to outbid a subsidiary of Mexico’s Telemex in an auction on São Paulo’s stock exchange, Bovespa, last July. Telemar paid 65% over the asking price of $36.8 million.

Mexican autoparts supplier Nemak, a subsidiary of local conglomerate Grupo Alfa, has closed its acquisition of assets belonging to TKAluminum for $414 million in cash. The assets include six plants in Argentina, Brazil, Mexico and the US and gives the firm new clients in Europe. Italian-based TKAluminum will receive a 5.64% synthetic equity interest in the Nemak business as part of the deal.