Category: M&A

Luxembourg-based steelmaker ArcelorMittal has acquired a 70% share in Brazilian steel processor Manchester Tubos e Perfilados. The acquisition will reinforce ArcelorMittal’s downstream position in Brazil, following the April acquisition of a 50% stake in Brazilian steel processor Gonvarri Brasi, Arcelor adds. Terms of the transaction were not disclosed. Manchester was founded in 1989 and serves the construction sector, which represents 50% of its activity, as well as the industry and automotive segments. Its capacity is 240,000 tons per year for end products, and 60,000 tons per year for processed products. Net sales were BRL270m in 2007, Arcelor says.

Brazilian software maker Totvs is in talks to acquire rival Datasul for BRL480m and 4.6m Totvs shares. Based on Totvs’ BRL50.10 closing price Tuesday, the total value of the deal could reach BRL710m. The 4.6m shares would be new shares and represent 14.3% of Totvs’ capital. The two boards may sign a formal agreement in the next three days, with shareholder approval meetings expected within 30 days after that, say the companies.

Chile’s securities regulator (SVS) says it has fined several executives and investors in retailers Falabella and D&S for using insider information during their proposed merger. Several executives purchased stocks of the then merging companies through their spouses and partners, SVS says, as information on the proposed merger was leaked. The regulator fined Hans Eben Oyanedel, director of D&S approximately $16,600, Ana Maria Laguna Galasso, external communications manager of the same firm $4,150 and Maria Luisa Solari Falabella, one of the main stock holders of the Falabella group, for approximately $41,479. In March, Falabella filed a statement with the SVS, Chile’s market regulator, saying it terminated talks with D&S for a deal, which was estimated at $4.5bn in size. In February, Chile’s antitrust regulator voted unanimously to bar the merger, saying the deal would impact competitiveness.

Brazil’s Telemar Norte Leste has obtained BRL4.3bn in 8-year CCBs, or bank credit certificates, from Banco do Brasil to help fund its acquisition of Brasil Telecom. The facility expires in 2016 and pays DI plus 1.30%, beginning May 2010. The CCB can be registered at Brazil’s clearing house Cetip and reoffered to other bank lenders in the secondary market. Telemar would retain its debtor status to Banco do Brasil, but the latter would be able to offload the risk by transferring ownership of the CCBs to third-party lenders, a likely scenario given the size of the transaction. The company, known now as Oi, is expected to fund the balance of the Brasil Telecom purchase, signed in April, by tapping different points on its yield curve. Total cost will be at least BRL12bn. Earlier this month Telemar approved the sale of BRL3.6bn in 1-year promissory notes to help fund the acquisition.

Mexican satellite communications operator Satelites Mexicanos (Satmex) has tapped boutique US investment bank Perella Weinberg Partners, headed by legendary M&A banker Joe Perella, to help it explore strategic alternatives including a sale or a merger, the company said Monday. Through its satellite network, Satmex offers radio, telephone and telecommunication services to 46 countries in the continent, including the United States and Mexico.

Vale said last Thursday it would seek a listing on Euronext Paris as part of a $15bn equity follow-on it was launching on Friday. The move will permit it to pursue acquisitions in Europe with greater ease by putting it under the French and European regulatory jurisdiction, say exchange experts. “One of the reasons companies seek a Euronext Paris listing is to pursue M&A opportunities in Europe,” says a person close to Euronext. “Having a local listing enables the regulators [in Europe] to fast track your documentation,” adds the executive. Because of the different regulations between jurisdictions on items such as shareholder rights and dividend requirements, making cross border acquisitions can involve potentially slow and as a result costly paperwork, says the person. Vale has said acquisitions are one of the uses of proceeds from its forthcoming offering. The company sought to acquire Xstrata earlier this year using Bovespa shares as part of the acquisition currency. It may still attempt to acquire the Swiss company, speculate market participants, and if it does, it will be far better equipped with a European listing. “They’re raising a huge amount of equity, which will enable them to take on much more debt. What do you think they want to do with all that money?” asks one head of capital markets away from the transaction, adding he believes the cash being raised is almost certainly an M&A war chest. Other reasons for listing on Euronext include gaining exposure to a European investor base and increasing visibility in those markets.

Online retailer B2W, the result of a merger between Brazilians Submarino and Lojas Americanas, is has started a road show supporting the sale of BRL350m in 2013 debentures, it said. Presentations will last until Tuesday, with the transaction set to finish by the end of the month. The notes rated A on a national scale are expected to pay 200bp over the DI rate. Unibanco is managing the sale.

Telemar has approved plans to issue BRL3.6bn in one-year promissory notes to help finance the acquisition of Brasil Telecom, it said. The notes would pay 160bp over the DI rate. Telemar is expected to hit up various points on the yield curve to obtain more than BRL12bn in financing needed for the purchase. The sale of BRL1.61bn in two series of debentures was also approved by regulators this week. A 1.15bn 2013 tranche will pay DI +140bp and a BRL460m 2015 piece pays DI+155bp.

Canada’s Brookfield Renewable Power has completed a $120m financing to fund the acquisition of the Itiquira hydroelectric generating facility in Mato Grosso, Brazil, it said Monday. Brookfield – part of Brookfield Asset Management – bought the 156MW facility on the Itaquira river from NRG Energy for $288m in December. The facility’s output is contracted until 2014. Calyon and EDC led the financing.