Latin American Economy & Business - July 2016 (ISSN 1741-7430)

Region: Corporate Radar

Liverpool buys Ripley stake: Mexican department store chain Puerto de Liverpool said it had signed an agreement with the Calderón family, majority shareholders of Chile’s Ripley chain, under which it would launch an IPO to acquire a 25.5% stake in the Chilean company. Ripley has a network of 69 retail outlets in Chile and Peru. Liverpool said it would pay 420 Chilean pesos per share, which would place an overall value of CLP813.14bn (US$1.23bn) on the Chilean company. If the IPO is successful, Liverpool and the Calderón family will seek to agree joint management of Ripley.

Venezuela seizes Kimberley-Clark: On 11 July the Venezuelan government said it was taking control of the local subsidiary of US personal and health care products company Kimberley-Clark. The company, which has operated in Venezuela for over two decades, had earlier said it was shutting down production because it could not secure supplies of raw materials or access the foreign exchange it needed to operate. Labour Minister Oswaldo Vera said the takeover was to protect jobs and re-start production at the Kimberly-Clark facility in Maracay, which manufactures a range of products, including toilet paper, sanitary towels, nappies and tissues. “Kimberly-Clark will continue operating under workers’ control”, the minister said. Since the Venezuelan economic crisis intensified, other companies have also been seized by the State, but widespread shortages of consumer goods have continued.

Graña y Montero wins Metro deal: Graña y Montero, Peru’s largest construction company, said it had won a US$410m contract to expand the Lima Metro system. Company president Gonzalo Ferraro said the contract would allow the purchase of new trains, the expansion of the total number of stations, and improvements to the electric power grid. The system currently has the capacity to carry 320,000 passengers a day, but this would increase to 500,000 with the number of operating trains to be increased from 24 to 44, he said. The new trains would be delivered in 2017-18. Ferraro said the Metro was experiencing a “crisis of success”, meaning that passenger numbers had increased much faster than anyone had expected. Graña y Montero participates in a range of sectors, including real estate, infrastructure, maintenance and oil and gas. It operates mainly in Peru, Chile and Colombia, and is seeking to start up in Mexico, so as to have a presence in all four Pacific Alliance countries.

Monsanto and Microsoft target Brazilian agro-tech: The US agricultural and biotechnology company Monsanto, together with computer software giant Microsoft, said they were launching a cooperative venture in Brazilian agriculture. Monsanto will invest BRL300m (US$92m) in a Microsoft fund set up to support and assess the application of digital technologies to Brazilian farming. The fund offers up to BRL1.5m (US$459,000) at a time to support start-up farm technology projects. After three years, the start-ups can treat the money as a loan, by paying interest, or give the fund a corresponding equity stake in their venture. “We want to promote new ventures in the agricultural sector. There is a vast area for investigation and development,” said Rodrigo Santos, chief executive of Monsanto Latin America.

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