Petrobras buy of Argentine giant stalled
<a href=www.zwire.com>United Press International. April 04, 2003
RIO DE JANEIRO, Apr 04, 2003 (United Press International via COMTEX) -- Brazil's state-run oil company is facing new hurdles in its proposed purchase of an Argentine energy firm, which would be one of Latin America's largest acquisitions in the past year. The Argentine government -- including President Eduardo Duhalde -- has been opposed to the deal, and the fight is taking on political undertones.
A ruling by an Argentine antitrust body regarding the majority-stake, $1.03 billion sale of Perez Companc to Brazil's Petrobras has been delayed and is now not expected for weeks.
But Duhalde and his team have been clucking ever more loudly in the past week, raising concerns of a Brazilian monopoly of key sectors within Argentina's borders.
A government spokesman told reporters that Duhalde informed top Perez Companc officials during a Thursday phone call that he disapproved of the sale.
Of particular concern to Duhalde and other members of government is a 32.5-percent share of the electricity distributor Transener that Petrobras would take if the deal went through as is.
Transener -- Argentina's largest supplier of high-voltage electricity -- is vital within "a strategic sector for the development of national industry," Duhalde told the company officials, according to presidential spokesman Luis Verdi.
A cynical Argentina watcher -- of whom there are a few -- might also note that this battle for national industrial pride is coming just three weeks before a presidential election.
Duhalde, not wanting to see yet another huge domestic company fall into the hands of foreigners, might just be drawing a line in the sand, at least one that won't blow away until after he sees his hand-picked successor elected on April 27.
Additionally, critics of Duhalde say his posturing is hypocritical, considering that more than 30 percent of Transener is already controlled by the U.K.'s National Grid.
Anibal Fernandez, Argentina's minister of production, told the La Nacion newspaper Friday that the government will emit a strong statement against the sale of the Transener stake next week.
He hinted that the government may expand its opposition to the deal as a whole, again citing control of a vital sector being in the hands of foreign company which is itself controlled by a foreign government.
It was last October that Petrobras announced it would pay $1.03 billion in cash and debt for a 58.6 percent share of Perez Companc.
The sale would transfer to Petrobras control of Perez Companc's vast holdings in the gas, oil and electricity sectors within Argentina, as well as Brazil, Venezuela and Ecuador.
Argentine officials also point out that Perez's 38 percent stake in natural gas distributor Transportador de Gas del Sur would also end up in Petrobras' hands.
Duhalde has criticized the Petrobras deal before.
He registered concerns during a January visit to Brazil when he met with then newly elected President Luiz Inacio Lula da Silva.
But Lula rejected arguments against the deal, according to Argentine officials, saying that the sale of Perez Companc shouldn't have restrictions placed on it.
But with the Argentine elections so close and growing political voices crying foul on the Petrobras buy, it is clear that Duhalde's team would like to see the deal disappear for some time, analysts say.
Fernandez told La Nacion that government officials are working hard to find a legal way to block at least the Transener part of the deal, which would make Petrobras Argentina's leading electricity distributor, according to the government.
Or alternatively, Fernandez said, Perez Companc could sell the stake in Transener to a domestic company.
Which likely gets a bit closer to the heart of the matter.
There has been speculation in the Argentine press that officials from other domestic energy companies -- Techint, Pescarmona, and Roggio & Cartellone -- are pressuring Duhalde to force Perez Companc to sell Transener to one of them.
None of those three companies has officially voiced any interest in Transener.
For now, the Rio de Janeiro-based Petrobras and Perez Companc officials are remaining silent on the troubles their deal is facing.
But Eloi Rodrigues de Almeida, president of Grupo Brasil, which represents Brazilian business interests in Argentina, said he thought the deal would win out in the end.
He chalked up Duhalde's opposition to the Petrobras deal as being payback for other business battles between Argentina and Brazil, namely recent scrapes over the trade of sugar and wheat.
"If a company wants to sell, who can stop it?" he said.
By BRADLEY BROOKS, UPI Business Correspondent