Union Group, a major investor in real assets in emerging Latin American countries, has completed a capital increase with Dundee Corporation, a Canadian asset manager with a track record in resources investments.
The sale takes Dundee’s stake in the company to 40 per cent and proceeds will be immediately deployed in expanding Union's presence in Latin America, across its high-growth portfolio of assets and businesses.
The acquisition by Dundee increases its exposure to Union’s extensive network of rapidly expanding portfolio businesses, valued in excess of USD1 billion, which are focused across resources, commodities and infrastructure, currently primarily in Uruguay, but increasingly in Peru and Paraguay.
The proceeds of this transaction will be invested into the existing network of Union’s portfolio companies, across sectors including agriculture, energy, minerals and oil and gas.
The expanding partnership will also enable Dundee and Union to explore further opportunities including developing joint investment vehicles targeting the areas of expertise where Union Group operates. Combining Dundee's long term institutional record in asset management and Union's Latin American capacities and operational expertise will create a strong proposition to facilitate high quality investment flows into the region.
Earlier this year, Union Agriculture Group, a portfolio company of Union, acquired the Uruguayan assets of El Tejar, the second largest agribusiness in the country, for USD170 million. The additional cash injection by Dundee will enable Union to continue to diversify its reach beyond Uruguay, a process accelerated last year by its development of hydropower and oil and gas assets in Peru.
Juan Sartori, founder and president of Union Group, says: “We continue to see the opportunity of building a world class portfolio of assets and businesses in high-growth Latin American countries and are ready to continue expanding our long term presence in the region. This investment by Dundee is a significant vote of confidence both in our investment strategy and Latin American growth more broadly.
“The sale of this additional stake to Dundee underlines our position as one of the largest international investors in our target Latin American markets and allows us to further diversify our portfolio of assets. We are delighted to have deepened our partnership with the team at Dundee and look forward to continuing a successful working relationship, particularly as we evaluate the launch of joint investment vehicles in the near future.”
Ned Goodman, president and chief executive of the Dundee Corporation, says: “While many Latin American economies struggled with relatively weak growth in 2013, output is expected to pick up this year and accelerate through 2015 and 2016. Stronger export growth, combined with resurgent domestic demand, should drive economic expansion in key markets. Union Group has a proven track record of identifying and developing growth opportunities in the region, as evidenced by Union Agriculture Group’s acquisition of the Uruguayan assets of El Tejar.”
