Interconnected in LatAm: Changing role of the banking partner
December 6, 2019Interconnected in LatAm: Changing role of the banking partner
Udi Margulies, Managing Director and Head of Latin America Investment Banking, examines how Scotiabank’s enviable corporate and investment banking footprint in the Pacific Alliance has enabled sizable transactions in diverse sectors, that reflect the region’s attractiveness to foreign direct investment.
Scotiabank’s investment banking platform fuels Pacific Alliance investment
While current geopolitical and market uncertainty might cloud the immediate growth prospects of today’s globally entwined continents, significant inbound cross-border and intra-region investment is evident in Latin America’s leading economies. This is especially true among the Pacific Alliance nations of Chile, Colombia, Mexico and Peru, where recent transactions have been fueled by sound local economies, promising demographics, and the connectivity of Scotiabank’s Latin American Investment Banking-M&A team.
Scotiabank’s enviable corporate and investment banking footprint in the Pacific Alliance has enabled sizable transactions in diverse sectors – from toll roads, power plants, telecom towers, shipping terminals to amusement parks – that reflect the region’s attractiveness to foreign direct investment.
A regional vision based on historic ties
With Scotiabank’s history in Latin America and the Caribbean dating back more than 50 years, the Canadian-headquartered bank has gained considerable perspective, essential for observing major trends and anticipating changes in this dynamic landscape.
Scotiabank has made the Pacific Alliance an area of strategic focus since this regional integration initiative was established in 2011.
Today, this formidable trade and investment bloc has a combined gross domestic product (GDP) of approximately US$1.9 trillion, represents the eighth-largest economy in the world and accounts for 40% of the GDP of the Latin American/Caribbean region.1
Alongside the steady rise of Pacific Alliance members, Scotiabank has expanded on its legacy presence in the region, creating top positioning among its personal, commercial and corporate banking operations. Specifically, Scotiabank has earned its place among the largest investment banking firms active in the Pacific Alliance, the only Canadian bank in the top 10.
During 2019, Scotiabank also initiated an Investment Banking and M&A effort in Brazil by hiring an experienced team of Investment Bankers in Sao Paulo to complement the Pacific Alliance effort.
Pacific Alliance M&A League Table 2
January 1, 2017 to September 30, 2019
Udi Margulies, Managing Director, Head of Latin America Investment Banking, notes that Scotiabank is advisor to national companies, regional multi-latinas and foreign strategic and financial sponsors investors with interests in Latin America: “Our clients are increasingly focused on cross-border transactions and we provide critical connectivity, through our on-the-ground capabilities and comprehensive industry and sector expertise as well as technical M&A product capabilities and professionals.” He adds, “They trust us for timely insight on opportunities, local connectivity, one stop shop M&A and acquisition finance capabilities, and seamless top quality execution.”
Transactions span cargo ports to toll roads and roller coasters
Scotiabank’s role in regional investment is highlighted by several landmark transactions. Among them, Scotiabank was the sole financial advisor to DP World on the recent US$715 million acquisition of Chilean port operator Puertos y Logistica S.A. (Pulogsa).
With Scotiabank’s counsel and executional support, DP World – a leading global port operator and trade enabler on six continents – successfully acquired 71.3% of Pulogsa from the aggregate holdings of the controlling shareholder the Matte Group, and the balance via a tender offer process. By completing this transaction, DP World is solidifying its dominance on the west coast of the Americas, enabling it to serve cargo owners and shipping lines in five key gateways in Chile, Ecuador and Peru that serve major industrial, population, agricultural and fishery hubs.
Scotiabank also demonstrated its advisory expertise as the M&A advisor to Brookfield Infrastructure Partners when it sold a 33% stake of its Chilean toll road Autopista Vespucio Norte, an urban express highway, and Tunel San Cristobal, a 4-kilometer (2.5 mile) toll tunnel expressway, to Frontal Trust and an additional 33% interest to CMB Prime and Ardian this year.
The Bank also advised The Carlyle Group on its 100% acquisition of Family Entertainment Centers (FEC) from Peruvian media conglomerate Empresa Editora El Comercio S.A. and minority shareholders.
Sums up Margulies, “Scotiabank’s proven connectivity in the Pacific Alliance is enabling significant cross-border M&A activity. With our long history of commitment to the region throughout the cycles, we have unique market knowledge and client relationships, combined with our global industry expertise and transactional M&A and acquisition financing capabilities, to add value to our clients.”
For more information on Scotiabank’s investment banking solutions and opportunities in the Pacific Alliance, please contact:
Managing Director, Head of Latin America Investment Banking
1. “Pacific Alliance Business and Investment Guide, 2018/2019,” EY, September 2018.
2. Bloomberg League Tables, January 1, 2017 to September 30, 2019.