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  • WHY LATIN AMERICA

  • Latin America in the world map

  • |

  • North America seems to be larger,

  • Source: Worldmapper

    Copyright SASI Group (University of Sheffield) and Mark Newman (University of

    Michigan).

  • Income per capita in the region is similar to the world average.

    More than 300 million of latinamericans have acquired a middle class standard

    with an approximate income of USD$ 20.000 per year. This represent from 50%

    to 60% of the regional population. (Our Time, Raul Rivera, p. 135)

    World Poverty

    Source: Worldmapper

    Copyright SASI Group (University of Sheffield) and Mark Newman (University of

    Michigan).

  • The region has important hydrological resources. Colombia is positioned as the first country with more water resources per km2

    Source: Worldmapper

    Copyright SASI Group (University of Sheffield) and Mark Newman (University of

    Michigan).

  • The region has the most important biological production capacity

    Bio-Capacity: crops, plain, forest and fishing.

    Source: Worldmapper

    Copyright SASI Group (University of Sheffield) and Mark Newman (University of

    Michigan).

  • 2,518

    1,185

    435

    321

    310

    243

    168

    65

    Brazil

    Mexico

    Argentina

    Colombia

    Venezuela

    Chile

    Peru

    Ecuador

    GDP 2011 (USD Billions)

  • Colombias GPD growth vs the Wolrds GPD 2002 - 2011

    2.5

    3.9

    5.3

    4.7

    6.76.9

    3.5

    1.7

    4

    5.9

    -4

    -2

    0

    2

    4

    6

    8

    GPD growth: Colombia vs. World (%)

    2002 2003 2004 2005 2006 2007 2008 2009

    2010 2011

    **Colombian growth Jan-Jun 2012: 4.9%

  • CIVETS: an opportunity for diversification

    ColombiaIndonesia VietnamEgyptTurkeySouth Africa

    CIVETS

    Leaders in the wolrd market

    CIVETS economies will have

    important GPD growth

    - Michael Geoghegan,

  • Global M&A Heat Chart

    *US million.

    Based on mergermarket companies for sale intelligence:

    *Merger Market. M&A Round-up for 2012

  • Global M&A Overview

    *Merger Market. M&A Round-up for 2012

  • Global M&A Overview

    *Merger Market. M&A Round-up for 2012

  • Global M&A Overview

    *Merger Market. M&A Round-up for 2012

    Private Equity Buyouts

    Asia-Pacific (excl Japan) saw US$ 27.9bn-worth of buyout deals, sliding 28.9% on 2011 (US$ 39.3bn). 2012 was the second highest year for buyouts in the region since 2007 (US$ 49bn).

  • Latin American M&A Overview

    *Merger Market. Latam M&A Round-up for 2012

    Telefnica SA acquires BrasilcelNV (50% stake). Deal value: US$ 9

    billion.

    Amrica Mvil(Mexico) acquires

    Carso Global Telecom SAB (99.4%). Deal value: US$ 28

    billion.

  • Latin American M&A Overview

    *Merger Market. Latam M&A Round-up for 2012

  • Latin American M&A Overview

    *Merger Market. Latam M&A Round-up for 2012

    Industry Analysis

    2010 2011 2012

    Latin American M&A Sector Breakdown 2010 Deal Value

    Latin American M&A Sector Breakdown 2010 Deal Count

  • M&A in the Pacific Alliance

    M&A Europe

    M&A US

    ChileColombia M&A EuropeM&A US

    *ISI Emerging Markets

  • M&A in the Pacific Alliance

    PeruMexicoM&A US

    M&A Europe

    M&A US

    M&A Europe

    *ISI Emerging Markets

  • Foreign Investment Pacific Alliance

    *www.banrep.com

    Mexico

    Peru

    Mexico

    Colombia

    Peru

    2010:

    2011:

    2012:

    US$ -623 million

    US$ 80 million

    US$ -1.6 million

    Chile

    2010:

    2011:

    2012:

    US$ 20 million

    US$ 650 million

    US$ 3,074 million

    2010:

    2011:

    2012:

    US$ 10.7 million

    US$ 19 million

    US$ 120 million

    2010:

    2011:

    2012:

    US$ 57 million

    US$ 15 million

    US$ 224 million

    2010:

    2011:

    2012:

    US$ 279 million

    US$ 3,877 million

    US$ 0

    2010:

    2011:

    2012:

    US$ 478 million

    US$ 0

    US$ 0

    * Foreign Investment Committee.

    Colombia

  • *www.proinversion.gob.pe

    Chile

    Colombia

    Peru

    Mexico

    2010:

    2011:

    2012:

    US$ 13 million

    US$ 205 million

    US$ 12 million

    2010:

    2011:

    2012:

    US$ 1.7 million

    US$ 0.3 million

    US$ 3 million

    Chile

    2010:

    2011:

    2012:

    US$ 73 million

    US$ 55 million

    US$ 28 million

    * www.economia.gob.mx

    Mexico

    2010:

    2011:

    2012:

    US$ 464 million

    US$ 464 million

    US$ 476 million

    Colombia

    2010:

    2011:

    2012:

    US$ 1,048 million

    US$ 1,057 million

    US$ 1,093 million

    2010:

    2011:

    2012:

    US$ 1,347 million

    US$ 1,381 million

    US$ 1,389 million

    Foreign Investment Pacific Alliance

    Peru

  • Multi-Latins in the Pacific Alliance

    *ISI Emerging Markets

  • Banks

    *ISI Emerging Markets

    Chile

    Mexico Colombia

    Peru

    00

  • Market Capitalization

    in Mila Markets

    March 2013 (US Million)

    Total Volume

    Negotiated Markets

    March 2013

    (Us Million)

    Total Issuers Mila

    March 2013

    Currents Intermediaries To report operations

    through Mila infrastructure.

    *Mila News. April 2013.

    Mila News

  • Ease on doing business

    *Doing Business 2013. IFC.

    Rank on the ease of doing business

    In the rank that qualifies countryas policy makers, Chile stands at37, Peru at 43, Colombia at 45and Mexico stands at 48.

  • Starting a new business

    Chile

    Starting a business

    requires 7 procedures, 8 days and costs 4.5% of income

    per capita.

    ColombiaHas reduced

    the time required from 60 days to 14, the cost from

    28% of income per capita to

    8% and procedures

    from 19 to 9

    Mexico

    Requires 6 procedures, 9 days and costs

    10.1% of income per

    capita.

    Peru

    Requires 5 procedures, 26 days and costs

    10.6% of income per

    capita.

    *Doing Business 2013. IFC.

  • Protecting investors

    *Doing Business 2013. IFC.

    How strong are investor protections?

    Colombia and Peru have ahigh score indicating strongerprotections. Chile stands inthe rank 32 and Mexico inthe rank 49.

  • *Doing Business 2013. IFC. Page 3.

    Business-friendly regulation

    Chile, Peru, Colombia andMexico are in the top 5ranking of Latin Americancountries on the ease ofdoing business thatmeasures the economieswith the most business-friendly regulation.

  • Ease of paying taxes

    *Doing Business 2013. IFC.

    Globally, Chile stands at 36,Peru at 85, Colombia at 99and Mexico at 107 in theranking of 185 economies onthe ease of paying taxes.

  • In 2007 Colombias government further institutionalized itscommitment to regulatory reform by establishing the Private Councilfor Competitiveness. The council is made up of business associationsand private sector players working closely with the government topromote sound, business friendly regulatory practices. Peru andMexico have advanced in regulatory practice as well.

    *Doing Business 2013. IFC. Page 27.

    Regulatory practices

  • *Doing Business 2013. IFC. Page 9.

    Colombia has achieved considerable success in improving businessregulation since 2005, along countries such as Georgia, Rwanda,China and Poland. Peru stands at 32 and Mexico at 39 in the globalranking

    Regulatory practices

  • Colombia: key principles for foreign investment

    Principles

    Equal treatment

    UniversalityAutomatic

    Nature

    Stability

    *Doing Business 2013.

  • Chile: key principles for foreign investment

    Principles

    Political and Economic Stability

    An efficient and high level

    of connectivity

    Important network of free trade

    agreements

    The legal transparency and stability for foreign investment

    *Foreign Investment Committee Chile

  • Mexico: key principles for foreign investment

    Principles

    Business friendly

    environment

    Competitive labor costs

    Network of free trade

    agreements

    Large logistics platform

    *www.promexico.com

  • Peru: key principles for foreign investment

    Principles

    Equal legal treatment (same rights as Peruvian

    investors)

    Non-discrimination based on the States

    ownership of a corporations equity

    Right to private property;

    protection against takings

    Right to engage in the economic activity of their

    preference

    Freedom of business or

    industry

    Freedom of foreign and local

    trade

    *www.proinversion.gob.pe

  • Colombia: Free Trade Agreements

    Canada

    United States

    Mexico

    Caribbean Community

    Free Trade Agreements

    EFTA

    Korea

    Japan

    European Union

    Mercosur

    Turkey In negotiation,

    concluded but not signed.

    Colombia has 19 agreements with 59 countries

    Cuba

    Venezuela

    Guatemala El Salvador

    Honduras

    Peru

    Panama

    Costa Rica

    Israel

    Pacific Alliance

    Signed and waiting toformalize

    Can

    *Foreign Trade Ministry

    Chile

    Bolivia

    Ecuador

  • Chile: Free Trade Agreements

    Canada

    United States

    Mexico

    Central America

    Free Trade Agreements

    EFTA

    Korea

    Japan

    China

    European Union

    Association Agreements

    Colombia

    Ecuador

    Bolivia

    Mercosur

    Venezuela

    Bilateral Trade Agreements

    India

    Partial Trade Agreement

    Malaysia

    Turkey

    In negotiation, concluded but not signed.

    Thailand

    Chile has 20 agreements with 56 countries

    Australia

    P4

    *Foreign Investment Committee Chile

    Pacific Alliance

    Peru

    Panama

  • Mexico: Free Trade AgreementsMexico has *49 agreements with 44 countries.

    * Mexico Economy Secretariat and Promexico

    Mercosur

    Canada

    Bolivia

    Costa Rica

    Colombia

    Chile(TPP)

    Israel Japan

    Brazil

    Paraguay

    Nicaragua

    Guatemala

    El SalvadorHonduras

    Panama

    EFTA

    Cuba

    Belize

    European Union Canada (APEC) (TPP)

    United States (TPP)

    Singapore (TPP)

    Australia (TPP)

    Malaysia (TPP)

    Vietnam (TPP)

    New Zealand (TPP)

    Brunei (TPP)

    Brunei (TPP) (APEC)

    Korea

    China

    Free Trade Agreements

    In negotiation, concluded but not signed.

    Signed and waiting toformalize

    Ecuador

    Pacific Alliance

    Peru (TPP)

    *(12 FTAs, 28 promotion agreements , 9 commercial agreements). Promexico

  • Peru: Free Trade Agreements

    Canada (APEC) (TPP)

    United States (APEC)

    (TPP)Mexico(APEC) (TPP)

    EFTA

    Japan (APEC)

    European Union

    Mercosur

    Peru has 19 agreements with 60 countries

    Cuba

    Venezuela

    Chile

    (TPP)

    Peru (TPP) (APEC)

    Bolivia

    Ecuador

    China (APEC)

    Costa Rica

    Guatemala

    Thailand (APEC)

    Singapore (TPP) (APEC)

    South Korea (APEC)

    El Salvador

    Australia (TPP)

    (APEC)

    TPP: transpacific agreement

    Malaysia (TPP) (APEC)

    Vietnam (TPP) (APEC)

    New Zealand (TPP) (APEC)

    Brunei (TPP) (APEC)

    Russia (APEC)

    *World Trade OrganizationAPEC: Forum Asia-Pacific Economic Cooperation

    Indonesia (APEC) Papua New

    Guinea (APEC)

    Philippines (APEC)

    Free Trade Agreements

    In negotiation, concluded but not signed.

    Signed and waiting toformalize

    ColombiaPacific

    Alliance

    Honduras

    Panama

  • Pacific Alliance

    *Eltiempo.com

    Mexico

    Colombia

    Peru

    Chile

    The four countries account more than:

    209 million of inhabitants.

    They represent:35% of Latin American GDP.

    They produce:2.7% of world GDP.

    They generate:50% of the Latin American

    commerce.

    They produce more than:49% of region exports.

  • The Pacific Alliance is a union of four countries (Colombia, Mexico, Chile, and Peru) that have coastlines on the Pacific Ocean and which have joined forces to enable them to act as a bloc on issues of trade and investment and to ensure full freedom of movement of goods, services, capital, and people.

    What is thePA?

    This new bloc will mean a breakthrough in the economic integration of Latin America, and it will be the opportunity to realize the commercial potential of the Member economies.

    Why is it significant?

    This initiative is intended to address the need to expand and diversify the political and economic relations of the region as a whole. It aims to deepen trade relations between the member countries, followed by those with Asia-Pacific, which is a region that shows great commercial, economic, and political dynamics.

    What is the purpose?

    *Mincomercio.gov.co (Colombian Minister of Trade, Industry, and Tourism Sergio Diaz Granados)

    Pacific Alliance

  • *Mincomercio.gov.co (Colombian Minister of Trade, Industry, and Tourism Sergio Diaz Granados)

    The initiative covers the following topics: the movement ofbusinessmen and workers and the facilitation of immigration,including police cooperation; trade and integration; aspectssuch as trade facilitation and customs cooperation; servicesand capital, which aim to integrate the stock exchanges;cooperation, and the establishment of dispute settlementmechanisms.

    What are the topics of

    integration?

    One of the issues proposed in this large integration project isthe freedom of capital markets and the integration of stockexchanges. This point has caught the attention of foreigninvestors and has sparked the desire of companies in eachcountry, in respect to accessing a group of homogeneousmarkets in terms of macroeconomic policy.

    What are the benefits for investment?

    Colombia will present a draft text covering the disciplines ofinvestment and services. In light of this proposal, the Membercountries will determine the need and desirability ofnegotiating an agreement on these matters. There are alsoplans for the iniciation of sessions of the Joint Committee onServices and Investment so as to identify barriers toinvestment in the countries of the Alliance.

    What is the proposed

    agenda for services and

    capital?

    Pacific Alliance

  • Foreign investment in Latin America

    Countries of the Caribbean and Central America received FDI in excess of 5% of GDP. Among the medium-sized and large economies, inward FDI in Chile accounted for as much as 7% of GDP, followed by Uruguay at 5%. For the largest economies in the region, FDI accounted for a far smaller proportion: Mexico and Argentina received flows equivalent to less than 2% of GDP.

    *Economic Commission for Latin America and the Caribbean.

  • Foreign investment in Latin America

    In 2011, FDI flows to the other economies of South America rose 33%, to US$ 54.658 billion

    *Economic Commission for Latin America and the Caribbean.

  • Foreign investment in the Pacific Alliance

    *CEPAL 2012

    US$

    million

    The Direct Foreign Investment in Colombia, Peru, Chile and Mexico represent approximately 40% of total FDI in the region.

    US$

    million

  • *CEPAL 2012 *Proinversion.gob.pe

    Foreign investment in the Pacific Alliance

    Direct Foreign Investment has a similar destination in Colombia, Chile and Mexico, although in the latter the manufacturing sector has a more relevant role in the FDI. In Peru the main sectors are mining, finance and communications.

  • Inflation rate in the Pacific Alliance

    The inflation rate in the Pacific Alliance has decreased progressivelyduring the last 11 years.

    *World Economic outlook

  • Imports

    *Dane.com *aduana.cl *economia.gob.mx *bcrp.gob.pe

    US M

    illion d

    ollars

    CIF

  • Exports

    US M

    illion d

    ollars

    CIF

    *Dane.com *aduana.cl *economia.gob.mx *bcrp.gob.pe

  • *DANE REPORT. Second quarter of 2012. - *National Infrastructure Agency (ANI).

    Colombia: Investment opportunities

    The two industries with the highest growth (related to

    the GDP) were mining and quarries (8.5%) and

    construction (18.4%)

    The National Government started the program The

    Fourth Generation (4G) of Road Concessions in

    Colombia. The goal is to achieve 3% of GDP in 2014 (US$10

    billion).

    Law 1508 (Public Private Partnerships), which

    introduces a new mechanism for introducing private

    investments in infrastructure projects, was approved in

    January of 2012.

  • *National Planning Department (DNP).

    The most relevant benefits of Law 1508 (Public PrivatePartnerships).

    1

    Private initiatives can propose and structure projects.

    2

    This law encourages the participation of institutional and financial investors.

    3

    Private equity funds can participate in infrastructure projects through a special regulation (1508 of 2012).

    Colombia: investment opportunities

  • *National Planning Department (DNP).

    Currently there is no exact data about all the private publicpartnerships, but the National Planning Department hasreports of some of the projects presented. These are someof the industries with approved projects.

    Construction (3)

    Early childhood care.

    Prisons

    Urban Renovation

    Roads (23) Railways (7)

    Airports (5)

    Colombia: investment opportunities

  • Agribusiness

    Energy Infrastructure

    Mining

    Chile: investment opportunities

    *Foreign Investment Committee Chile

  • Chile: investment opportunities

    *Foreign Investment Committee Chile

    Agribusiness is one of the countrys most important sectorsaccounting for 12% of Chiles GDP and 24% of exports in 2010.

    Chile is one of only fiveplaces in the world, witha Mediterranean climate.This type of climatefacilitates production offoods such as olive oil,wine, fruit andvegetables that are inline with an internationaltrend towards healthyeating.

  • Energy

    Gold and Metals

    IT Services

    Infrastructure

    Mexico: investment opportunities

    *JP Morgan

  • *Metals Economics Group

    Mexico: investment opportunities

    Location of significant gold and base metals drill results

    Latin America remained the most popular exploration destination, attracting 25% of global spending in 2011, with six countries Mexico, Chile, Peru, Brazil, Colombia, and Argentina accounting for the lions share of the regions total, boosted by strong growth in gold exploration in Mexico.

  • *Promexico

    Mexico: investment opportunities

    Service Providing Projects

    Concessions

    Asset Exploitation

    Public-private partnerships can take on differentmodalities. In Mexico, the following have been alreadyimplemented through different projects:

  • Mining

    Electricity Industrial

    Infrastructure

    Peru: investment opportunities

    *www.proinversion.gob.pe

  • Peru: investment opportunities

    www.proinversion.gob.pewww.proinversion.gob.pewww.proinversion.gob.pe

    *www.proinversion.gob.pe

    http://www.proinversion.gob.pe/http://www.proinversion.gob.pe/http://www.proinversion.gob.pe/

  • International Law Firms in the Pacific Alliance

    *Latin Lawyer

  • Top 5 deals of 2012 by value

    *Latin Lawyer. Table Leagues 2012.

    Deal US$ Firms Deal US$ Firms

  • Top positions regionwide

    *Latin Lawyer. Table Leagues 2012.

    By volume By value

  • *Latin Lawyer. Table Leagues 2012.

    Top positions regionwide

    Regional deal spread

  • *Latin Lawyer. Table Leagues 2012.

    Top positions regionwide

    Regional sector spread