Too Tantalizing to Refuse
Argentina's financial crisis has yielded fine pickings for predatory companies. In July, Brazil's Petrobras snatched up the beleaguered Pérez Companc but the deal significantly raised its risk profile.
Argentina is going through hell, but there are a few
opportunities around that are just too good to turn down. In
July, Brazil's national oil company, Petrobras, could not
resist an offer to buy Pérez Companc, then Argentina's
largest independent oil producer. Pérez was one of
Argentina's most admired companies, but January's 70% peso
devaluation wrecked its finances. Its market capitalization
plummeted to $1.09 billion in August from $3.68 billion at the
end of last year. Its debt-to-equity ratio hit 199% in June,
against 89% a year earlier. Francisco Gros, president of
Petrobras, agreed to pay $1.13 billion for the company, making
this the largest acquisition by far in Argentina this year. "We
did this deal because it was a deal you cannot refuse," says
Gros. "Generally this is not the time to go on an acquisition
binge and instead look after cash, but we all thought...
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