Category: M&A

Brazilian energy company Cemig has increased its investment program by 37% to BRL2.13bn from an original BRL1.56bn approved in 2007. The increase is aimed at the acquisition of transmission assets on the second half of 2008, Cemig adds.

BGC Partners, the UK-based broker dealer, has acquired Brazil’s Liquidez DTVM for an undisclosed amount. Local press estimates the deal was worth some BRL500m. The acquisition is seen as part of a broader trend in Brazilian broking, driven by numerous factors, including the country’s ascendance as a regional liquidity center. “Strong GDP growth has made Brazil a key driver of global economic expansion, which is reflected in the tremendous volume growth in the country’s over-the-counter and exchange traded products over the past several years,” says Lee Amaitis, co-CEO of BGC. A trading linkup between the BM&F and the CME, set to start in September, is also fueling an increased drive for access to a market whose secondary liquidity could surge. Following a big payday from the IPO of the BM&F and Bovespa, many local brokers – threatened by a wave of technological innovation – seek a final cash-out in the form of a sale to foreigners looking for direct access to BM&FBovespa. “Others are definitely looking at selling,” says a Sao Paulo-based broker. Recently, Citi bought Intra, Bradesco bought Agora and Colombia’s InterBolsa took a majority stake in Finabank.

Mexican retailer Soriana has filed to sell up to MXP4.8bn in floating-rate bonds, the second long-term piece of its refinancing of a bridge that funded the $1.35bn December acquisition of rival Grupo Gigante. It has not yet indicated the maturity of the offering, rated AA on a national scale. Inbursa, JPMorgan and Banamex will manage the transaction. In June, Soriana placed MXP5.5bn in 2013 bonds at TIIE plus 43bp through the same trio of banks. The remainder of the bridge is expected to be repaid using commercial paper.

Shareholders of Totvs and Datasul have approved the Brazilian software makers’ merger. Totvs will issue 4.46m shares, a 14.3% stake, to Datasul shareholders, and will also pay them a BRL480m dividend. To help fund the transaction, Totvs has secured a BRL205m 6-year loan from development bank BNDES at TJLP plus 150bp, and plans to sell BRL200m in 2019 debentures, also paying TJLP plus 150bp. UBS says in a report it views the deal as accretive to Totvs, and finds the two companies’ customer bases – Datasul mostly sells to larger customers than Tovts’ – to be complementary.

Citi’s Honduran unit Banco Citibank de Honduras has begun operations. The bank is the result of the merger between Banco Cuscatlan and Banco Uno. “In Honduras, we see a financial system that has evolved in the right direction, that allows free competition among global and local institutions and that allows that competition to bring benefits to the clientele,” Edgardo del Rincon, the executive in charge integrating Citi’s operations in Central America, tells LatinFinance. “We see Honduras … as an important player in the context of Central American integration,” he says. Citibank de Honduras will have $400m in assets, engaging in micro lending, retail, commercial and corporate banking operations, as well as a credit card unit called Cititarjetas de Honduras.