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IG4 picking up Grana y Montero stake
Posted on Thursday, 28 November 2019 16:05
Brazilian private equity investor IG4 has signed on the dotted line to acquire a stake of up to 25.0 per cent in Peru-headquartered construction firm Grana y Montero.

The target said the shares being picked up are currently owned by its founding families and former executives.

No financial details of the transaction have been disclosed at this time.

Once completion has taken place and the relevant authorities in Peru have given their seal of approval, IG4 will submit a tender offer to minority investors in the business on the same terms.

The private equity company issued a statement to Reuters confirming the purchase was taking place, but stopped short of giving any further information on the transaction.

Grana y Montero employs more than 20,000 people and has developed projects in 13 countries throughout Latin America and the Caribbean.

It is active in the engineering and construction, infrastructure and real estate sectors.

The company generated revenue of PEN 2.83 billion (USD 834.92 million) for the three months to the end of September 2019, down from the PEN 2.91 billion recorded over the corresponding timeframe in the preceding year.

Grana y Montero recently hit the headlines for the wrong reasons, having been investigated over its relationship with Brazilian conglomerate Odebrecht, with executives from the latter having confessed to issuing bribes in exchanges for contracts being awarded.

Odebrecht has been fined around USD 180.00 million for its behaviour, according to Reuters, with prosecutor Jorge Ramirez telling the news providers the group’s partners, of which the Peruvian company is one, and other implicated parties will also have to repay the balance of the USD 370.00 million owed to the state for the resulting illegal cost overruns.

Two people in the know have told Reuters that IG4’s deal with the Lima-headquartered firm has a clause that would exempt the buyer from fines relating to the allegations.

According to Zephyr, the M&A database published by Bureau van Dijk, the most valuable deal targeting a construction company to have been announced worldwide during 2019 to date involved Alianca Transportadora de Gas Participacoes acquiring Transportadora Associada de Gas for USD 8.66 billion.

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