Brazil’s Itau Unibanco Holding, Latin America’s largest bank in market value terms, has turned to Wachtell, Lipton, Rosen & Katz for counsel on a cash-and-stock bid for control of CorpBanca that Reuters values at nearly $3.7 billion. The target, Chile’s fifth-largest bank, has retained the services of Simpson Thacher & Bartlett and a pair of South American firms.
The transaction’s terms call for CorpBanca to merge its Chilean assets with Itau’s local affiliate, which will receive a $652 million investment from its Brazilian parent on the way to creating a new entity owned by the two banks, according to Bloomberg. The two banks had been in discussions for several weeks about a potential partnership.
David Williams, a New York–based M&A partner who heads Simpson’s Latin America practice, and corporate partner Edward Chung are leading the team advising CorpBanca on the deal. Other Simpson lawyers working on the matter include tax partner Robert Holo, executive compensation partner Gregory Grogan and associates Jacqueline Barbera, Linda Barrett, Mark Chorazak, Juan Naveira, Paula Querol, Marcela Robledo and Adam Wells.
Chung and Williams advised Santiago-based CorpBanca in 2012 on its nearly $1.3 billion acquisition of Colombia’s Helm Bank, according to our previous reports. Simpson worked closely with Colombian firm Posse, Herrera & Ruiz on that deal.
Bogota-based Posse is working with Simpson and Chile’s Claro & Cia in advising CorpBanca on its latest transaction, according to a press release issued by the company. Cristian Canales Palacios, a former interim CEO at CorpBanca, serves as the bank’s division manager for legal services.
São Paulo–based Itau is the product of a 2009 megamerger between Brazil’s Banco Itau and Unibanco, which yielded roles for Cleary Gottlieb Steen & Hamilton and Shearman & Sterling. The Am Law Daily reported last year on Cleary’s role advising the combined banking giant on its nearly $1.4 billion buy of Citigroup’s nonbanking Brazilian credit card and consumer finance unit.
CorpBanca, which is controlled by Chilean billionaire Alvaro Saieh Bendeck, has also turned to Cleary for corporate work. The firm handled the bank’s initial public offering more than a decade ago, and Cleary senior counsel Roger Thomas in New York is a longtime adviser to Chilean interests. (Thomas was named an “honorary Chilean” in 2011 at an event that also featured Saieh.)
Cleary capital markets partner Jorge Juantorena, M&A partners Paul Shim and Ethan Klingsberg and senior attorney Jennifer Bender are counseling BAML and Goldman Sachs as financial advisers to CorpBanca on its merger agreement with Itau.
Wachtell, which has handled its share of Latin American banking deals in the past, has its own ties to Itau. But the CorpBanca deal with Itau announced Wednesday is the firm’s first major transactional engagement for the Latin American banking giant.
M&A partners Richard Kim and Mark Veblen—the latter of whom was promoted to partner on Jan. 1—are leading the New York–based team from the firm advising Itau on the matter. The other Wachtell lawyers working on the assignment include corporate counsel David Adlerstein and associates Raaj Narayan, Brandon Price and Brett Shawn.
Santiago-based Claro & Cia and Colombia’s Brigard & Urrutia are serving as local counsel to Itau, whose general counsel is Claudia Politanski.
South America has undergone an economic revival over the past few years, although recent political uncertainty in some countries and differences over adopting free market reforms have given rise to concerns that the boom times could be fading.
Citing data compiled by Thomson Reuters, regional business publication Latinvex reported in December that Magic Circle firm Linklaters, Sullivan & Cromwell and Skadden, Arps, Slate, Meagher & Flom were the top three foreign legal advisers on Latin American M&A deals last year.
Other Am Law 100 and Global 100 firms are mining the continent for transactional opportunities. Simpson is a case in point. The firm, which established an outpost in São Paulo that opened in late 2009, also took the lead this week for Charlotte-based Polymer Group, a textile company owned by longtime private equity client The Blackstone Group, on its acquisition of Brazil’s Providencia for an undisclosed sum.