RETAIL SECTOR STOOD OUT IN CHILE IN APRIL, WHILE IN COLOMBIA AND PERU THE ENERGY AND TECHNOLOGY INDUSTRIES EXHIBITED HIGH LEVELS OF ACTIVITY
M&A MARKETS IN CHILE, COLOMBIA, AND PERU SAW MODERATE ACTIVITY IN TERMS OF NUMBER OF TRANSACTIONS, NEVERTHELESS IT WAS A SIGNIFICANT MONTH IN DEAL SIZE. IN CHILE, AN IMPORTANT TRANSACTION IN THE RETAIL INDUSTRY WAS ANNOUNCED IN APRIL ALONG WITH OTHER INTERESTING AGREEMENTS THAT OCCURRED IN THE REAL ESTATE SECTOR. COLOMBIA SHOWED INTERESTING DEALFLOW INTENSITY, ESPECIALLY IN THE TECHNOLOGY AND FINANCIAL INDUSTRIES, WHILE IN THE PERUVIAN MARKET, THE ENERGY DISTRIBUTION SECTOR ANNOUNCED A US$ 3 BILLION TRANSACTION
In Chile, during the last days of April, low budget department stores La Polar and AD Retail/Abcdin, announced the integration of their financial and retail businesses. The transaction contemplates a capital increase and purchase of shares which aims at a 50/50 control by each group. La Polar and Abcdin’s consolidated combined annual revenues amount to ~US$840 million, and with this transaction, significant synergies are expected to arise in the merged company such as increasing gross leasable area of their physical stores, expanding their product mix and enhancing their financial business strengths.
In late March and early April, an agreement was executed in the Chilean real estate industry. Ripley Inversiones, a subsidiary of Ripley Corp, completed the sale of all of its shares in Nuevos Desarrollos to Plaza Oeste, subsidiary of Grupo Plaza. Nuevos Desarrollos is a holding company that owns shopping centers throughout Chile. Before this transaction was completed, Plaza Oeste controlled Nuevos Desarrollos through a 77.5% stake; now the transaction gives Plaza full control on the target company and becomes the sole owner of the shopping malls in Arica, Iquique and Copiapó, in addition to Mallplaza Los Dominicos, Egaña, Alameda and Sur, in Santiago. The US$ 207 million acquisition is for 22.5% of the shares. This acquisition represents a significant growth and consolidation strategy for Plaza in the market, where it currently operates 25 malls between Chile (17), Peru (4), and Colombia (4).
During the end of March and the beginning of April, the real estate asset manager Grupo Patio completed a capital increase in which Wildsur, Paola Luksic’s family office, increased its share from 11% to 16.7%. In addition, Gabriela Luksic, Paola’s sister, also became shareholder of the company, acquiring a 5.2% stake. Consequently, the Luksic family now holds almost 22.0% of the company’s shares, securing two seats on the board of directors. The US$ 78 million transaction was planned to raise capital to finance the company’s growth in Chile and abroad, enhancing its real estate business. This is the second capital increase made by the company within the past 12 months, following the previous made in June 2022 for US$ 42.3 million. To date, Grupo Patio accumulates ~US$ 2.5 billion of assets under management, 150 assets for rent, and over 890 thousand square meters of GLA for lease.
Another significant transaction that took place in the Chilean mining sector was the integration of Minera Meridian and Minera Florida into the operations of Pan American Silver Corporation. Minera Meridian operates the “El Peñon” mine, a gold and silver mine located in northern Chile, about 165 kilometers from Antofagasta. The mine covers an area of ~92,400 hectares of land where 170,000 ounces of gold and 4.2 million ounces of silver were extracted in 2022. Minera Florida mine is located 150 kilometers away from Santiago, and it extracts gold, silver, and zinc in an area that covers ~18,600 hectares of land, producing 90,000 ounces of gold in 2022. Pan American Silver Corp operates mines in Canada, Mexico, Peru, Bolivia, Argentina, Chile, and Brazil, with expectations to continue expanding its business in each country.
In the infrastructure sector, CMB-Prime, an asset management firm, has completed the acquisition of 50.1% of the shares of Terminales Maritimos de la Patagonia via the CMB-LV Infraestructura III Investment Fund, for an undisclosed amount. The transaction, which was announced last February, constituted a share purchase and capital increase that would give the asset manager control of the company. Terminales Maritimos de la Patagonia operates Puerto Chincui, located about 15 kilometers from the city of Puerto Montt. The company also operates a 33-hectare logistics center with back-up areas for logistics services, cargo storage and warehousing to support its import and export services.
In Colombia, KIO, a Mexican data center and digital infrastructure platform, acquired Zetta Data Center Complex for an undisclosed amount. Zetta Data Center Complex is a technological innovation project located in the Free Trade Zone of Bogota, developed by ZFB Group and TC Latin American Partners. TC Latin American Partners has invested more than US$ 700 million in the region since 2012, while Grupo ZFB has managed to consolidate its position as one of the most important data center developers in the country. Through this acquisition, KIO seeks to consolidate its presence in Colombia, following its expansion plans in Latin America.
Another important transaction that occurred in Colombia was made by Migrante, a Chilean company with operations in Chile, Colombia, and Peru, which announced the acquisition of Crediorbe. The latter is a fintech that covers more than 32 cities in Colombia that specializes in granting loans for motorcycle purchasing. Through this acquisition, Migrante, who will now adopt the name Galgo, seeks to expand and consolidate its presence in the Colombian market becoming one of the most relevant players in the motorcycle financing sector in the Andean region.
In Peru, China Southern Power Grid International announced the US$ 2.9 billion acquisition of Enel America’s subsidiaries in Peru: Enel Distribucion Peru and Enel X Peru. The Chinese company signed an agreement in which Enel Americas agrees to sell 83.15% of Enel Distribucion Peru and 100% of Enel X Peru. China Southern Power Grid International is a subsidiary of the state-owned China Southern Power Grid, which mainly builds and operates electricity grids in southwest China. In 2018, China Southern Power Grid International acquired a 28% stake in Transelec, a Chilean electricity distribution company, for a total amount of US$1.3 billion.
A Peru/Chile cross-border transaction was completed during April in the Andean Region. Agricola San Clemente, one of Chile’s largest fresh fruit exporters, with a broad product portfolio such as apples, cherries, tangerines, blueberries, and grapes, acquired Gandules, for an undisclosed amount. Gandules has presence in Jayanca and San Pedro valleys in the Lambayeque region, located in north Peru, and is the largest bell pepper exporter of the country. This acquisition will allow Agricola San Clemente to expand its production volumes, enhancing its fruit exports.
During the month of April, moderate activity in terms of the number of transactions was seen in the Andean region. Despite the political, economic, and social difficulties affecting Chile, Colombia, and Peru, a substantial capital flow of over US$4 billion was recorded. M&A markets in the Andean Region continue to show positive signs of stability for international investors, particularly in resilient sectors such as real estate, mining, energy, and agriculture.