Latin 500: Big Means Really Big When it Comes to the Top Companies in Latin America

Brazilian Merger At a May 2009 news conference to announce that two food giants were joining forces, Nildemar Secches, chairman of Perdigão, left, and Luiz Fernando Furlan, chairman of Sadia, display the new jersey for the Corinthians soccer club, originally sponsored by Perdigão. The merger of the former rivals created Brasil Foods, which ranked No. 39 on this year’s Latin 500.

Taking into account a presumed drastic revenue decline at Petróleos de Venezuela in 2009 — whose official financial report had not been released at press time and therefore is not ranked — the top three state-run oil companies generated some $264 billion in sales. This figure  equals the combined revenue of the next 18 companies on the Latin 500 list of largest corporations in Latin America. And no private-sector company is likely to come close to these oil firms in the near future.
Although energy and mining companies loom large on this year’s list, the top 25 corporations include firms in the telecommunications, retail and food sectors as well as foreign automakers, much like the Fortune 500.
The Latin Trade list has expanded over the past decade. In 1999, only the top 100 companies traded on regional stock exchanges were ranked. Nearly all those 100 companies are still operating, even though many have changed hands and names.
Some of the big industrial players of the 1970s, 1980s and 1990s have become units of even larger corporations.  Mexican steelmakers Hylsamex and Grupo Imsa, for example, listed in 1999, were acquired by the Argentine-Italian Techint Group and later merged into its steelmaking unit, Ternium. The iron mining company Belgo Mineira is now part of AcelorMittal Brasil, a subsidiary of the largest steel company in the world.
Mexico’s Grupo Gigante, an independent supermarket chain, outranked Organización Soriana in 1999. Today Soriana (No. 59) owns Gigante. Meanwhile, Chile’s Cencosud, No. 33 in 2010, has acquired Argentina’s Disco supermarket chain, No. 53 in 1999.
Brahma, the Brazilian brewer that ranked 29th in 1999, is today a core unit of global beer giant Anheuser-Busch InBev. Sadia, a Brazilian food manufacturer that was No. 45 on the 1999 list, was merged into Perdigão and later became Brasil Foods, No. 39 in 2010.
Few companies from the 1999 list have closed down altogether. “In mergers and acquisitions, it might be perceived as companies are disappearing,” said Ricardo Ernst, a professor at the McDonough School of Business at Georgetown University in Washington. “Is the company disappearing? Not necessarily. It’s a different game.”
Latin America is a different place compared to 1999. With economic growth forecast to reach 4.5 percent this year, government deficits tamed and inflation under control — for the most part — the region is looking at “the Latin American decade,” predicts Luis Alberto Moreno, president of the Inter-American Development Bank.