Mergers and acquisitions in Latin America are agreed deals
by necessity because few companies have enough shares in the
public markets to allow for hostile bids. Electricidad de
Caracas, the city's listed electric utility, was an exception.
It had no controlling shareholder and in April 2000 became the
target of the first and only successful hostile takeover in
Latin America. For owners of Latin America's closely held
corporations, EDC's fate is an object lesson in the perils of
life in the equity markets. For foreign investors, AES's saga
in Venezuela highlights the thrills and the dangers of
investing in Latin America.
Before the takeover,...
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