DURING AUGUST, M&A TRENDS IN THE ANDEAN REGION WERE PRIMARILY DRIVEN BY THE FOOD, LOGISTICS, AND REAL ESTATE INDUSTRIES
M&A MARKETS IN THE ANDEAN REGION REGISTERED TRANSACTIONS IN THE FOOD AND LOGISTICS SECTORS IN CHILE, AND HEALTH, ENERGY, INFRASTRUCTURE AND MINING SECTORS IN COLOMBIA & PERU
During August, Hapag-Lloyd completed a US$ 995 million acquisition of the terminal and associated logistics services business from SAAM, based on an agreement announced in October 2022. The latter is a Chilean multinational corporation, that provides international trade services across its primary divisions: port terminals, towage, air cargo logistics, and inland logistics solutions. It has operations in 14 countries in North, Central, and South America. Hapag-Lloyd is a global leader in container shipping, specialized refrigerated cargo, hazardous materials transport, and unique cargo undertakings. The transaction included the ownership of 10 port terminals spanning Chile, the United States, Mexico, Costa Rica, Colombia, and Ecuador. It also includes off-port warehouses and real estate assets where SAAM Logistics currently operates. With this acquisition, Hapag-Lloyd will increase its footprint in Latin America and build up a robust terminal portfolio, while the Chilean company plans to focus on its tugboat business.
In the food industry, the Brazilian company Minerva acquired 16 slaughtering and deboning plants and a distribution center from Marfrig, investing over US$ 1.5 billion to enhance its production capacity in Brazil, Uruguay, Argentina, and Chile, the latter being a new market for Minerva. Marfrig is a leading multinational company engaged in the production, distribution, and sale of meat. Its operations in Chile include the import and distribution of meat, as well as a lamb slaughter and a deboning plant, which is also part of this transaction. In contrast, Minerva is one of the main players in beef exports throughout South America. In addition to the lamb processing plant in Chile, the transaction includes eleven plants and a distribution facility in Brazil, an industrial unit in Argentina, and three other plants in Uruguay. This investment positions Minerva as the largest company in the region, boasting the highest number of certified plants for exports to China. The transaction will strategically position Minerva to effectively address the global surge in demand for meat products, while also expanding its production capacity by 44%. This expansion is expected to generate potential aggregate net revenues exceeding US$ 10 billion. Moreover, it empowers diverse synergetic benefits, including logistical efficiencies, distribution networks, geographical expansion, and amplified access to an international customer base.
In the infrastructure industry, BTG Pactual Infrastructure Investment Fund divested a 50% stake in the highway concessions network Central Interport to Penta. Penta is an insurance and financial services company that owns the “Las Americas Investment Fund”, the entity through which the purchase is being executed. The transaction is priced at US$ 48.1 million and includes concessions for the “Variante Melipilla” toll road and the Interport Highway of Talcahuano-Penco.
Another significant transaction was the merger between two health-tech companies, Medismart and TeleDoc. Medismart specializes in online healthcare services such as telemedicine, medical prescriptions, and tests, while it also sells pharmaceutical products. Meanwhile, TeleDoc is a telemedicine startup that offers 24/7 general medical assistance and specialty medical appointments, with operations across the Andean Region and Mexico. The merger aims to expand Medismart’s platform with inclusive tools like translation and sign language support, fostering growth in Latin American and Caribbean regions. The integrated company will retain the name Medismart, with two TeleDoc directors joining its board. This move is aligned with Medismart’s strategy of expanding its product range with a diversified healthtech ecosystem, which includes previous acquisitions like the majority stake in the medical marketplace Farmazon.
In Colombia, Beyond One announced the acquisition of Virgin Mobile Latin America, a mobile virtual network operator (MVNO) that specializes in providing voice and data services, with presence in Colombia, Chile, and Mexico. Virgin Mobile Latin America is part of the Virgin Group, a global and growth investment group that owns several companies in multiple industries and geographies. Beyond One is a digital services provider based in Dubai, United Arab Emirates that specializes in providing high-end customized digital experiences. This acquisition marks the second M&A transaction for Beyond One this year, following the purchase of Virgin Mobile Middle East and Africa in the first quarter of 2023. With this transaction, Beyond One consolidates its growth strategy to continue expanding its presence in Latin America.
In the real estate industry, Parque Arauco Colombia, a subsidiary of Parque Arauco, a Chilean developer and manager of multi-format commercial real estate assets in Latin America, announced an agreement to purchase 51% of the fiduciary rights of an investment vehicle that owns 19,000 m² of the gross leasable area (GLA) of the Titan Plaza Shopping Mall in Bogota, from Visum Rentas Inmobiliarias Collective Real Estate Investment Fund. The US$ 34 million (COP 138 million) deal contemplates a purchase option to acquire the remaining 49% for 30 months, after 24 months from the closing date of the transaction. Titan Plaza Shopping Mall is divided into a commercial space and a business sector and is located between the two most important thoroughfares of the country’s capital city, Bogota. Visum Rentas Inmobiliarias Collective Real Estate Investment Fund is operated by Visum Capital, a Colombian infrastructure manager, with long-term investment vehicles and a diversified portfolio of real estate assets. The vehicle in which Parque Arauco will invest is debt-free and recorded an EBITDA of approx. US$ 5.6 million in June 2023. Such EBITDA was generated by both the retail operation (80%) and the office area business (20%). Parque Arauco is currently searching to expand its operations in Colombia, and this announcement reinforces its growth strategy in the country.
In August, Fondo Ashmore Andino III and Ashmore Andean Fund III, part of Ashmore Group, an investment manager based in London with over US$ 57 billion in assets under management (AUM), acquired an 85% stake in Sociedad de Oncología y Hematología del Cesar (SOHEC), a Colombian Healthcare provider, for an undisclosed amount. Sociedad de Oncología y Hematología is a cancer institute that specializes in chemotherapy and radiotherapy treatments and focuses on providing reliable research studies of cancer and high-quality treatments, providing services to over 7,500 patients per year. Ashmore Colombia announced it will maintain SOHEC’s current management team and will start to foster the company’s growth and establish initiatives for cancer prevention and treatment in Colombia. This is the second transaction of Ashmore Group in Colombia in the last two months, including an acquisition in Concesionaria Ruta Bogotá Norte in July.
In Peru, Grupo Romero, one of the largest economic groups in Peru, with presence in industries such as food & beverage, agriculture, energy, industrial, logistics, and financial services, completed a tender offer to acquire 10% of shares of related company Alicorp for US$ 149 million. Alicorp is a leader in the food and beverage sector in Peru and reported revenues of over US$ 4 billion and an EBITDA margin of over 10% in 2022. With this transaction, Grupo Romero will increase its participation from 54% to 64%, consolidating its position as the controlling shareholder of Alicorp.
In the Peruvian mining sector, Rio Tinto and First Quantum Minerals completed a transaction to form a Joint Venture to fund the development of the “La Granja” mining project, one of the largest undeveloped copper deposits in the world. The mining project is in Northern Peru and has the potential to become a large mining operation with a total of 4.32 billion tons of copper. First Quantum acquired a 55% stake in the project for US$ 105 million and will invest an additional US$ 545 million in the newly formed Joint Venture to finance the capital and costs necessary to carry out the investment project. Rio Tinto acquired the mining deposit from the Peruvian Government back in 2006 and carried out several drilling programs and partnerships with indigenous communities in the area. With this transaction, First Quantum will become the controlling shareholder of the operation and will operate the “La Granja” mining project with an initial timetable that includes environmental impact studies and other legal procedures, according to the agreement signed with the Peruvian Government.
In Peru, another relevant operation was announced in the energy sector, where Celsia announced the acquisition of the Caraverlí Wind Project of 218 MW for US$ 240 million. Celsia is part of Grupo Argos, a Colombian holding company with extensive experience in road and airport concession projects, as well as investments in the infrastructure and concrete industries. The project in Peru is owned by Grupo Ibereólica Renovables, a Spanish renewable resources developer that specializes in the promotion, construction, and operation of electric power generation facilities, with relevant operations in Spain and Chile, and projects in Peru and Brazil. Celsia and Grupo Ibereólica Renovables expect to close the deal before the end of 2023, while the wind project is expected to begin operations in the second or third quarter of 2025.
The M&A markets in Chile, Colombia, and Peru showed a moderate level of dynamism, with the Food, Logistics, Real Estate, and Healthcare sectors leading the activity. As of August, both the number of transactions recorded and the combined total amount in millions of dollars were higher in Chile compared to Colombia and Peru. The Colombian M&A market registered multiple transactions in diverse industries, while the M&A movement in Peru resurfaced in August with the mining sector leading the activity. M&A activity in the Andean Region will still be influenced in the next months by global macroeconomic trends and the individual initiatives of each country.