Category: M&A

Monsanto has completed the acquisition of sugarcane biotech company Aly Participacoes for $287m. Aly is the parent company of CanaVialis and Alellyx. The legal advisor for the target was Shearman & Sterling, according to Dealogic. The deal was first announced early November.

As Merrill Lynch and Bank of America (BofA) shareholders cast votes on the proposed merger today, questions surrounding the extent of the post-vote carnage swirl both internally and among the banks’ haggard competitors. The deal is expected to go through, forming a temporarily bloated entity employing some 370,000 people, according to one internal estimate. News reports citing market speculation in the days leading up to the vote suggest up to 30,000 could be eliminated globally. For Merrill’s LatAm business, insiders express cautious optimism that its relatively high profitability compared to other regions covered by the bank will shield it from the worst of the layoffs. “LatAm is profitable. There aren’t any areas within the region that have lost money on a net basis,” notes a senior official at the firm. LatAm barely overlaps with BofA’s existing businesses, which is an additional plus, and BofA has said it wants to keep the Merrill’s international businesses, especially those exposed to higher growth regions. However, BofA’s interest in LatAm beyond Mexico has long been in doubt, and some Merrill businesses are likely to be shut or significantly downsized by merger-related redundancies. There is added pressure from forecasts of a dramatically reduced LatAm fee pool in coming years versus estimates made 12 months ago when Merrill was beefing up. Among more vulnerable sectors are lines that generate less profit. ECM is one business that appears more exposed to bearish public markets that have for months shunned new transactions, say internal executives. The shop’s Brazil office, heard employing some 200 people, may also be “right sized,” to use the polite term. “There will be cuts, though I don’t think they’ll cut to the bone,” notes the Merrill official. Thursday, Credit Suisse announced an 11% reduction in global headcount following a 10% cut only a month earlier. Morgan Stanley, Citi, Goldman Sachs and JPMorgan have also trimmed a minimum of 10% in the past 2 m

Brazil’s Cosan has completed a sale of BRL1.1bn in 1-year promissory notes at DI plus 3%. Proceeds will help fund the acquisition of Esso fuel distribution and service station assets it bought in April from ExxonMobil for $1bn. Bradesco is managing the sale. The sugar and ethanol producer announced Monday the completion of the Esso asset acquisition following the payment of $715m to ExxonMobil and the assumption of debt of $175m.

Mexico’s Grupo Simec has prepaid a $120m loan used to help finance its May acquisition of Corporacion Aceros. The one year loan was taken out at the time of the $850m acquisition, CFO Jose Flores tells LatinFinance, at a rate of Libor+145bp. He says the loan from Inbursa has been repaid using the company’s own resources. The steel products manufacturer and distributor says it and parent ICH are free of any bank liabilities, permitting them to invest in increasing capacity and seek opportunities for a new acquisitions. Flores says there are no immediate acquisition plans.

Moody’s has assigned a negative outlook to Marfrig, citing the risks associated with the company’s acquisitive growth strategy and the challenges of integrating the new acquisitions into the company while improving their margins without disrupting its other businesses, says Moody’s. The negative outlook also reflects Marfrig’s limited track record for generating positive funds from operations and its intensive working capital needs, which continue to drive negative cash flow from operations. Confirmed with negative outlook are the company’s corporate family rating of B1 and that of its $375m 9.625% senior unsecured notes due 2016, also rated B1.

A breakdown in merger talks between global mining concerns BHP Billiton and Rio Tinto Tuesday is marginally positive news for Brazilian iron ore specialist Vale, say analysts. “The threat to Vale’s title as the world’s biggest iron ore miner is gone for now,” says an analyst at Banif-Ixe who declined to be named. He adds that Vale also maintains leverage in determining price increases. A BHP-Rio union is seen as having added impetus to a nascent push within the mining and steel industries for price indexation that would have reduced Vale’s ability to dictate terms. Vale ADRs rose 1.87% Tuesday, in line with the Bovespa’s 1.83% rise.

Banco do Brasil’s announced acquisition of Nossa Caixa has spurred Moody’s to place on review for possible upgrade the target’s D+ financial strength rating and the global long and short term local currency deposit ratings of A3 and Prime 2, respectively. Moody’s says the review will focus on the benefits the bank will derive from being part of a much larger, diversified banking franchise, with a broader product offering that could well complement Nossa Caixa’s modest cross-selling capability. The review will also evaluate the effects of the integration process on Nossa Caixa’s operations and customer base, Moody’s adds.