Merger and acquisition volumes in Latin America plunged 75% in 2002. However, it was not a bad year for cross-border deals within the region involving Latin American bidders and targets. Indeed, a transaction of historic proportions took place in October 2002 when Petrobras, the Brazilian national oil company, paid $1.03 billion for 58.6% of Pérez Companc, Argentina's second-largest oil company. As Argentina's economy crashed and street protests threatened to topple the government, negotiators from the two sides hashed out a deal giving the Brazilians control of one of the country's largest companies. The acquisition, significant for its complexity and for Petrobras's audacity and strategic vision, is LatinFinance's M&A deal of the year.
Extreme risk frightened most investors away from Argentina...
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