M&A: Asia’s Resource Play

Nov 1, 2010

Mexican telecoms and Brazilian oil pump up the deal volume numbers claimed by advisors, but flow is still up year-on-year, even after stripping out distorting Telmex and Petrobras trades.

As of October 11, LatAm M&A flow topped reached $216 billion, according to Dealogic. In the same period in 2009, deal volume totaled only $74 billion, a little over a third of this year.

However, without Telmex and Petrobras – which most M&A specialists do not class as true advisory – total volume comes in at only $126.9 billion, still a significant increase, but somewhat less dramatic.

LatAm M&A specialists are most excited by the ramp up in Asian-led natural resource plays. One of the largest deals recently announced was the acquisition of a 40% stake in Repsol’s Brazilian assets for $7.1 billion by China’s Sinopec, giving the Chinese government access to Brazil’s offshore non-performing assets.

Spain’s Repsol had been considering spinning the assets off via an IPO before Sinopec came through with...

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