Chilean quake spares economy, as do tax reforms 2 Apr 2014 Tuesday’s huge tremor has brought blessedly limited loss of life and property. That’s good for all involved, including investors. President Bachelet’s tax plans, unveiled on Monday, also avoid harm to Chile’s prospects. Falling copper prices remain the biggest risk.
Itaú schools investors on minority rights in Chile 12 Mar 2014 The Brazilian bank’s $3.7 bln deal to take control of CorpBanca shafted public shareholders, including the Bank of Chile and the World Bank’s IFC. A U.S. fund is making a stink. But the best it’s likely to come away with is a useful, if painful, lesson in governance.
Brazil’s banking bigwigs samba their way north 30 Jan 2014 Itaú is buying control of a Chilean bank just as investment bank BTG Pactual sallies into Mexico. With Brazil wobbly, regional diversification makes sense. But succeeding in new markets may require toning down Brazilian bravado, on display in Itaú’s treatment of Chilean investors.
Will the real Michelle Bachelet please stand up? 18 Nov 2013 After navigating Chile through the 2008 crisis she now wants another shot as president. But on education, tax and the constitution she wants to reverse factors that have allowed Chile to stand out from its neighbors. Striking a balance between business and students will be key.
Brazil’s wasteful state bank can learn from Chile 23 Oct 2013 Most of the $80 bln BNDES lends every year goes to big firms like Vale or Petrobras, which could easily borrow from private sector lenders. The OECD thinks that’s bad policy. CORFO, Chile’s development bank, does a better job directing resources where they’re actually useful.
Latin America has more to fear than Fed itself 16 Sep 2013 Declining growth rates present the worst contagion problem. An interactive Breakingviews analysis suggests Venezuela and Brazil are most vulnerable, with Mexico and Argentina less so. The region’s politics and more homogenous profile than Asia leave it exposed in other ways.
Latam can rely on masses for next phase of growth 31 Dec 2012 A few key people like the world’s richest man and showy political leaders have epitomized the region for years by spearheading the commodity-led, export economies. In 2013, a burgeoning middle class, helped by low interest rates, will make a mark powering Latin America’s future.
Latam minority investors strike back against Enel 21 Dec 2012 The Italian utility tried to foist overvalued assets onto shareholders of Enersis, its Chilean unit, as part of an $8 bln capital hike. Minorities rebelled and with regulatory help forced Enel to restructure the deal. It’s a small but significant victory for Latam shareholders.
Chilean lender gets tasty-looking Colombian rollup 10 Oct 2012 CorpGroup is building on its purchase of Santander’s Colombian business with a $1.3 bln offer for Helm Bank, probably the last bank of any size available in the hot market. Though the headline price is no steal at 1.7 times book value, possible synergies make it look a bargain.
$4 bln Santander IPO puts Mexico bulls to the test 26 Sep 2012 That’s a handy sum for the Spanish bank’s coffers. And at 2.2 times book value it might look reasonable for a Mexican retail finance business churning out 20 pct returns. But fervent competition, newbie borrowers and rising default rates could soon put that under pressure.
Anglo finds satisfactory end to Chilean quarrel 23 Aug 2012 The London-listed miner has buried the hatchet with Codelco, selling Chile’s copper producer 25 pct of a disputed mine for $1.9 bln. Anglo American’s other problems will be harder to solve, but here CEO Cynthia Carroll can reasonably claim she’s protected shareholder value.
Enel squeezes its Latam minority shareholders 27 Jul 2012 The troubled Italian utility is using an $8 bln capital hike at its Chilean unit Enersis to grow in the region. While Enel’s Spanish arm Endesa kicks in assets to cover its 60 pct portion, minority holders must stump up cash. They may be powerless but the reaction speaks volumes.
Jilted Air Products gets only a consolation prize 19 Jun 2012 Since the U.S. hydrogen producer’s hostile bid for Airgas failed last year, it has lagged rivals. Its former prey’s dramatic outperformance exposes the $5.8 bln offer as too stingy. A smaller deal in Chile may help Air Products revive growth but is a poor Airgas substitute.
World’s new air giant taking off at turbulent time 18 Jun 2012 The marriage of Brazil’s TAM with Chile’s LAN has taken nearly two years to consummate and will create the most valuable airline in the world. The promise of greater regional integration is fueling big expectations that will be difficult to meet given economic headwinds.
Brazilian banking star puts $15 bln value to test 1 Mar 2012 In three short years, André Esteves has dealt his way to a six-fold increase in the price of his BTG Pactual. Wall Street can only dream of such riches. Former owner UBS must be quietly weeping. But the planned IPO will reveal just how solid the investment bank’s foundations are.
Anglo American risks reaping a Chilean whirlwind 4 Jan 2012 The London-listed miner may think it can win a $2 bln dispute with state-owned Codelco over a prized mine. Still, the stakes are high and the case would be heard in Chile. Defeat would be a big blow for Anglo and CEO Cynthia Carroll. But a face-saving compromise looks possible.
Latin America gets closer even as Europe cracks 8 Dec 2011 Cross-border deals among South American companies, like Chilean CorpBanca’s purchase of Santander Colombia, set a new record in 2011. A single Latin currency seems remote given the euro’s woes. But as the region’s private sector consolidates, it can’t be ruled out for ever.
Chilean Winter tests the country’s economic model 28 Sep 2011 Mass protests over education mask a deeper divide over the post-Pinochet preference for market-based, rather than state, solutions. The Chicago Boys got it mostly right, but not on education. Resolving the current dilemma may require fundamental philosophical reform - and money.