It took 14 months for the closing of the agreement for Grupo Gloria to acquire Soprole de Chile, for the sum of US$ 640.27 million.
The operation not only involves the acquisition of 100% of the company valued at US$210 million, which Grupo Gloria reported in the stock market, but also the debts that add up to the difference to reach US$640.27 million.
“The divestment process (from Fonterra) includes several transactions for a total amount of 591 billion Chilean pesos (US$ 640.27 million),” Gustavo Rencoret, manager of Legal and Corporate Affairs at Soprole, informed the regulator.
In the letter sent by Grupo Gloria, it details that Gloria Foods – JORB signed a contract for the purchase of 100% of the shares of New Zealand Milk (Latam) LTD, the remainder of investment shares Dairy Enterprises and all the social rights of Dairy Enterprises (Chile) making of Soprole Investments and its subsidiaries in the southern country.
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In order for this purchase to be completed -says the Peruvian- a series of precedent conditions stipulated in the contract must be met.
Among which is obtaining authorization from the National Economic Prosecutor’s Office (FNE) of Chile, an entity similar to Indecopi in that country, and launching a Public Offer to Purchase the Shares of Soprole Inversiones.
The acquisition considered an estimated price of US$ 210 million and the cancellation of debt with Fronterra of the companies upon acquiring the closing of the transaction.
At the time the transaction closes, Soprole will join Grupo Gloria with operations in Latin America and of which companies such as Pil Andina SA in Bolivia, Swiss Dairy Corporation in Puerto Rico, Gloria Colombia SAS in Colombia, Leche Gloria Ecuador SA in Ecuador, Gloria Foods del Uruguay SA in Uruguay, Gloria Argentina SA in Argentina, and Leche Gloria SA in Peru.
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The executive director of Leche Gloria, Claudio Rodríguez, indicated that this operation is a The opportunity to incorporate a company of the category of Soprole to our business portfolio will be a source of pride for our food holding company.
“In addition to its leadership in the Chilean market, the identification and professionalism of its human resources and its excellence in areas such as brand development, innovation and good practices, will build synergies both in the relationship and in the technical and nutritional evolution, which will not only strengthen our regional food platform, but will also allow us to contribute to socially responsible development with the communities we serve”, he indicated.
shopping path
The purchase operation began in September of last year, when Soprole’s shareholders informed the Chilean market of their interest in carrying out divestments in several countries, including Chile.
Thus, a week ago it was indicated that the Gloria group would be a potential buyer of Soprole de Chile.
JP Morgan is one of the investment banks that advise the New Zealand company and sources familiar with the business reveal thatthat the latter would have already drawn up a short list of potential buyers for Fonterra. Within that list would be the French Lactalis, the Canadian Saputo, the Peruvian group Gloria and a company of Chinese origin, whose name has not been confirmed.
In addition, UBS and Jarden participated were the investment banks that advised the New Zealander.
Gloria will be the second milk actor in Chile
The New Zealand company -which has more than 10,500 associates- controls 99.85% of the shares of Soprole Inversiones SA through Inversiones Dairy Enterprises SA, which will be transferred to Grupo Gloria.
“Soprole is a very good business, but it does not depend on New Zealand milk or its expertise (…) Fonterra is delighted to transfer the Soprole business to a new owner committed to a strong regional focus on growth,” Miles Hurrell wrote. , CEO of Fonterra.
Mauricio Olaya: “For Gloria it means confirming the desire to become a regional player”
Main partner of Estudio Muñiz and director of the Corporate Law and M&A area.
It is undoubtedly a relevant deal for a Peruvian company. There are not many Peruvian business groups that have decided to expand internationally in an inorganic way. In general, we would say more, in terms of activities and assets we are probably one of the countries in the region with the highest level of concentration of its entrepreneurs within its own market. The logic behind it is relatively easy to explain: a constantly growing market, clear rules of the game and especially known by local investors, low level of risk, a relatively large population size, among other factors. Thus, once once more seeing the Gloria group betting on its internationalization in a transaction that is also an important amount for a Peruvian company is undoubtedly worthy of congratulations and recognition. Even more so when not all the inorganic growth adventures of our entrepreneurs have been successful and in many cases have implied subsequent disinvestments or great challenges to maintain a competitive position in the new chosen market.
There have undoubtedly been important M&A transactions carried out over the years by leading Peruvian groups in markets in the region or even beyond it. The Brescia Group, the Romero Group, Enfoca (investment funds), Ferreycorp, and others have made major acquisitions in Colombia, Ecuador, Chile, Brazil, Mexico, and Central America. But I reiterate it has not been the prevailing rule. Peru has offered great investment opportunities for its local entrepreneurs.
For Gloria, it means confirming the desire to become a regional player with the benefits that this entails, to begin with, mitigation of risks derived from concentration in a single market. It is interesting and challenging for it to happen in a market like the Chilean one, which to date is experiencing levels of concern among its businessmen derived from the political shift and proposals to change the rules of the game. However, this is the context in which many times purchase opportunities arise that in other circumstances with less risk and growth would not have arisen. And in those cases there are those who decide not to let them pass.