23 junio, 2020 Perú

M&A league table 2019: Peru

Derecho Corporativo / M&A

Latin Lawyer gathered data on M&A activity across Latin America during 2019. Here, we present which firms scored a place on the most M&A work in Peru.

According to Latin Lawyer’s data, Miranda & Amado Abogados and Muñiz, Olaya, Meléndez, Castro, Ono & Herrera worked on more M&A transactions that closed in 2019 than any other Peruvian firm, completing 12 deals each.

They were closely followed by Philippi Prietocarrizosa Ferrero DU & Uría (Peru), which closed 10 transactions, while Rodrigo, Elías & Medrano Abogados and Rebaza, Alcázar & De Las Casas closed nine and eight deals each.

Excluding those deals for which the value is confidential, our data shows that Rodrigo Elías had the highest combined value for the closed M&A deals it worked on; they were collectively worth US$4.7 billion. Estudio Echecopar member firm of Baker McKenzie International’s deal count totalled US$3.3 billion and Miranda & Amado’s was US$2.7 billion.

Of those deals that were signed or announced during 2019, Rodrigo Elías worked on 11 deals, according to our data. PPU came in second, with five transactions.

Counting only the values that were made public, Payet, Rey, Cauvi, Pérez Abogados had the highest combined deal value for deals that were signed or announced in 2019 – totalling US$12 billion. Rodrigo Elías followed on US$4.5 billion and Muñiz on US$3.1 billion.    

Payet Rey’s high deal value can be attributed to the firm’s role as counsel to US private equity group Carlyle on its US$12 billion acquisition of a significant minority stake in Spanish oil and gas company CEPSA. The deal was signed in April 2019 and also drew counsel from Brazil and Colombia. International firms Latham & Watkins LLP, Ropes & Gray and Linklaters also advised on the transaction.

Our findings are based on deals that closed or were signed or announced in 2019 and were submitted to Latin Lawyer by law firms.

Lawyers describe Peru’s M&A market in 2019 as active, underpinned by the country’s economic growth and macroeconomic stability, which attracted investors. “Private equity continued making inroads in the Peruvian M&A market with more players active in it,” says Rodrigo Elías’ Luis Enrique Palacios.

However, Palacio says 2019 was not as good as the year prior. “Political uncertainty was mounting around the closing of Congress,” he says, referring to Peru’s constitutional crisis at the start of the fourth quarter. President Martín Vizcarra dissolved Congress to end a year-long battle with opposition lawmakers over his anti-corruption campaign. They responded by suspending Vizcarra from the presidency and voting in the vice-president instead. After a brief period of protests and confusion, Vizcarra called snap congressional elections, which were held in January this year.

M&A activity was spread across industries, agree lawyers. “The Peruvian market benefited from a healthy diversity of deals in terms of size, industry and players,” says Muñiz’s Mauricio Olaya. PPU partner Rafael Boisset confirms no single industry stood out as containing more deal-making than the rest. “But we saw many higher education and agroindustry deals that started last year and are expected to close during 2020,” he adds.

Rodrigo Elías’ Jean Paul Chabaneix points to important dealmaking in the agribusiness, education, healthcare and power sectors, and predicts “the trend should continue in 2020.”

Partners from several firms share the opinion that US energy company Sempra’s US$3.6 billion sale of its Peruvian assets to China Yangtze Power (CYP) was one of the year’s most important M&A deals in Peru. It was announced in September and was among the largest overseas M&A transactions by a Chinese company in 2019. Moreover, the transaction involved Peru’s largest power distributor Luz del Sur and represented the largest ever transaction in the local electricity industry. Baker McKenzie LLP and Muñiz helped CYP on the deal, while White & Case LLP and Rodrigo Elías advised the seller.

The transaction required approval from local antitrust body Indecopi (which it obtained in April 2020) as it was above the value threshold for the electricity sector set forward in the antitrust regulation. The electricity sector is the only industry in which Indecopi has a say over the approval of deals. However, this is set to change. A new merger control law was passed last year, which will expand the review to most sectors.

The law was set to be enforced in August, but the government decided in May to postpone its implementation. With the delay, the government intends to give the economy more time to recover following the public health emergency generated by covid-19. Instead, the law is likely to take effect early next year.

Once effective, Miranda & Amado partner Roberto MacLean believes Indecopi and Congress may focus on M&A deals taking place in sectors where there has been increased market consolidation recently, such as the food and pharmaceutical industries. “[They are] proposing legislation regarding supervision of distribution chains and pricing of goods, which, if enacted, could have an impact on future M&A deals,” he says.

Other lawyers think Indecopi will be more reactive across several industries. “As there is mounting public pressure around certain industries, [Indecopi] will most likely apply more restrictive criteria when the merger control rules enter into effect next year,” says Rodrigo Elías’ Jean Paul Chabaneix.

The covid-19 crisis is taking a tough toll on Latin America, and Peru is no exception. Muñiz’s Olaya says “transactions have been reduced to almost zero”, and the few deals that are ongoing are facing difficulties linked to the state of emergency and lockdowns. This is especially the case in due diligence processes, as the gathering and review of information becomes difficult with offices working remotely, meaning employees lack access to the same level of infrastructure and documents, he explains.

But, as the crisis deepens, companies are likely being forced to sell assets to survive, a development that may restart the M&A market. “There are many investors interested in these kinds of acquisitions, [who have] appetite for distressed M&As and value the know-how of shareholders and management,” says Olaya.

While lawyers are taking a wait-and-see approach to some sectors, as investors pause to see how they react to the crisis, other industries are expected to be reactivated more swiftly. “The agroindustry could probably become very active post-crisis,” says PPU’s Boisset. His opinion is backed by Miranda & Amado’s MacLean. “The world population needs to be fed and Peru’s agriculture potential is there to be developed,” he says, although he adds that the economic crisis generated by the pandemic leaves a question mark over the pricing of assets, especially due to its damaging effect on the income of the middle class.

To view all M&A deals that took place in Peru between March and December 2019, follow the link here. For transactions that took place in January-February, click here.

A record of multijurisdictional deals that took place in Latin America between March and December can be found through the following links for closed deals and for signed and announced transactions.

Latin Lawyer has also published M&A league tables for Brazil and Argentina, and will continue reporting on M&A activity in Latin America in 2019 in upcoming briefings. Follow links here to views M&A deals that took place between March and December in smaller markets in Latin America, including Central America, Panama and the Dominican RepublicEcuador and Paraguay.

To find out more about our methodology – including what types of deals we have included in our analysis and how we collect information on deals – click here.

Fuente: Latin Lawyer

Link Publicación