TTR Dealmaker Q&A – Sergio Díez (Cariola Díez Pérez-Cotapos & Cía Abogados)


TTR Dealmaker Q&A

August, 2015

EPM acquires Aguas de Antofagasta from Inversiones Punta Rieles

USD 965m

Sergio Díez
Cariola Díez Pérez-Cotapos & Cía Abogados

Sergio Díez, partner at Santiago, Chile-based Cariola Díez Pérez-Cotapos & Cía Abogados led the local legal team that advised EPM on its USD 965m acquisition of Grupo Luksic’s water production and treatment company, Aguas de Antofagasta (ADASA), held by Inversiones Punta Rieles.

Q: What did this transaction represent for the firm?

A: This transaction had special importance due to the many angles of interest that had to align to close the deal. Initially we had to provide assistance to EPM on an efficient acquisition structure, from legal, tax and regulatory standpoints, especially considering the acquisition was of a regulated entity. In parallel, an extensive legal and financial due diligence process took place in connection with a complex and huge corporation and its business. Finally, we should point out that between the date EPM presented its binding offer and the date in which the SPA was signed, only a short period of time elapsed, and consequently, it presented a very challenging scenario for our lawyers due to the complexity of the different areas involved and the lack of information and time.

Q: What made this deal stand out from other M&A mandates?

A: Each transaction is unique and has its own complexities. In this particular case, the transaction distinguished itself from others, firstly, for its USD 965m value. The fact that EPM had a complete staff of advisors was also impressive. Finally, the variety of angles from which the acquisition had to be deeply analyzed also generated a special complexity not seen in every transaction.

Q: What challenges did the deal present for the firm?

A: As a relevant consideration, the organizational, regulatory and environmental analysis of ADASA was very complex due to the fact that its business is linked with the prior operation of a public company, is heavily regulated under an agreement with public concessions company, ECONSSA, and supervised by various regulators. Also, the transaction involved all kinds of assets, rights and permits, owned by ADASA and by ECONSSA. Finally, ADASA’s operation is governed by both regulated and non-regulated agreements, and affects services rendered in different locations.

Q: How did the deal demonstrate the firm’s competencies?

A: Cariola was able to adivise EPM through a considerable group of lawyers, with different specializations, such as corporate, regulatory and environmental, sanitation, tax, labor, real estate, financial and intellectual property, among others. This coordinated work allowed EPM to obtain a complete overview of the company from its different scenarios. Working together with other EPM advisors and with the seller’s consultants, we were able to find and provide solutions for different situations in order to move forward and close the acquisition.

Q: What does this transaction represent for the sector itself?

A: We think this transaction is positive for the sector, especially considering EPM is one of the most important companies in Colombia, and moreover, the most important utility in the country. Also, EPM has investments in many countries of Latin America in water, sanitation, energy and telecommunications, among other sectors, and has always distinguished itself for great service and management.

Q: What foreign ownership limits were relevant to this transaction?

A: In Chile, there are no ownership restrictions for foreigners in connection with this type of resource. Nonetheless, we were able to coordinate presentations for EPM in order to explain the regulations currently in place governing water resources and water rights, while also anticipating future amendments to the water code.


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