Latin American M&A’s Set Record

BY CHRONICLE STAFF

Latin America set a new record in merger and acquisition activity last year. The $16 billion spin-off of the international operations of Mexican fixed telephony provider Telmex was the largest deal in the region, according to the latest ranking of Latin Americas Top 100 M&As from Latin Business Chronicle and Thomson Reuters.

Other top deals included the $12.3 billion purchase of Brazilian bank Unibanco by Brazilian bank Banco Itau, the $10.3 billion purchase of the Sao Paulo stock exchange Bovespa by the commodities exchange BM&F and the $5.5 billion sale of Brazilian mining company IronX Mineracao to UK-based Anglo-American.

Latin America was also indirectly involved in the largest M&A deal worldwide last year - the $52 billion sale of U.S. brewing giant Anheuser-Busch to Belgium-based InBev.  InBev has Brazilian investors and its CEO, Carlos Brito, is a Brazilian. He will also head up the new Anheuser Busch-InBev company.

"That a Brazilian-controlled company could acquire such an American icon, and assemble $50 billion of financing to pay for it in the midst of the worst global financial crisis in 80 years -- theres no question that Latin American companies are lead players on the global M&A playing field," says Paul Schnell, an M&A lawyer who is head of the Latin America practice at U.S.-based law firm Skadden, Arps, Slate, Meagher & Flom, which represented Anheuser-Busch in the deal. "The InBev/Anheuser-Busch deal had it all -- the largest cash hostile deal over for a U.S. target, which turned into a win-win friendly merger."

TOTAL DEALS

All in all, there were 1,610 M&A deals announced in Latin America last year worth a combined $146 billion, according to a Latin Business Chronicle analysis of Thomson Reuters data. That represents a 5.5 percent decline in the number of deals, but a 19.7 increase in their combined value.

"In past global slowdowns, Latin America always fared far worse than the U.S. and Europe," Schnell says.  "This time around, I think things in Latin America are actually stronger than in the U.S.  This is really an extraordinarily positive development that testifies to the strength and maturity of the region."

Brazil again dominated Latin Americas M&A activity, accounting for 61 percent of the total value and 48 percent of...



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