How Do You Say Spinoff In Portuguese?

It seems the spinoff bug is even starting to spread a bit into the emerging markets, with Brazil being the latest country to catch the fever. Well…maybe more of a cough or a minor cold. JBS SA (JBSAY), once a potential player in the Sara Lee (SLE) sweepstakes, announced plans to spin off its dairy unit, Vigor Alimentos (what a name…in English at least). The company is the country’s fourth largest maker of yogurt, cheese and margarine while controlling ~7% of the country’s market share. With sales of just 1.5b reals though, Vigor is really a very minor piece of JBS, however JBS SA CEO Wesley Batista wants the unit to achieve 5b reals of sales by 2015. Gilberto Xando will remain CEO of the divested company. The company needs approval from its bondholders before proceeding with the spin and it also did not release the exchange ratio (I think you might have to swap shares of JBS).

Additionally, Brazilian power company MPX is planning to spin off its Colombian coal mining assets. The new company, CCX, will supply Colombian coal to MPX’s thermoelectric power projects in Brazil and Chile. CCX is developing a major compliance coal integrated mining system in Colombia, consisting of a deep-water port, a 150-km railroad and estimated resources to support a 35 Mtpa-production. Shareholders of MPX will receive 1 share of CCX for every one share of MPX owned. The company, like Vigor, will be listed on Sao Paulo’s Novo Mercado stock exchange. The split is expected to occur during Q2 and is tied to the planned JV between MPX and German power group E.ON. MPX also said that it will propose an extra payment to its bondholders of 3.45 reals per security if the CCX spin off is approved.

While I do wonder just how much (if at all) the investment ‘thesis’ behind spinoffs extends beyond the US, we are dedicated to bringing you all spinoff related news and analysis from around the globe.

Disclosure: Author holds no position in any stock mentioned.