Hidden Dangers, Proceed With Caution

Hidden Dangers, Proceed With Caution


Investing in Latin America is not for the faint-hearted, even at the best of times and with the best of partners. The recent experience in Argentina of Dutch Royal Ahold is a perfect example of what not to do. In 1998, Ahold created a 50-50 joint venture with Velox Retail Holdings, the banking and financial a company owned by Uruguay's Peirano family, to run a chain of supermarkets in the region. The Peiranos had built a small financial empire in Latin America controlling banks in Argentina, Uruguay and Paraguay. The joint venture with Ahold included Disco, a chain of Argentine grocery stores. In August 2002, after Velox declared bankruptcy, Ahold was forced to take over its partner's st

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