Brazilian Tech Bets
Internet deals are dominating merger and acquisition activity in South America's biggest market. But value remains for investors in slow-growth, capital intensive businesses that need restructuring.
Brazil has lately become a hotbed of deal making. Latin
America's largest and possibly most promising new technology
market is drawing in foreign companies willing to pay
surprisingly high prices for choice assets. In a landmark deal
in June, Telecom Italia paid $810 million for a 30% stake in
globo.com, valuing the Internet portal owned by
Organizações Globo, the country´s largest
media group, at $2.7 billion.
This seems a lot even for a country expected to see
substantial growth. A survey by the consultants KPMG in
São Paulo found that Internet and information technology
deals dominated mergers and acquisitions activity in the first
quarter of 2000, with 14 transactions. A year earlier, it
counted just three information technology-related deals. And
the size of deals has been growing all year.
In January, iG, an aggressive free-access portal, raised
$100 million from investors for 14% of its equity,...
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