15 September, 2011

Billionaire Cisneros Seeking to Buy Spanish Assets Amid Crisis

Bloomberg.com by Leon Lazaroff Venezuelan billionaire Gustavo Cisneros said hes looking to buy Spanish companies as the European debt crisis drives down asset valuations. Cisneros, the chairman of Cisneros Group of Companies, said hes considering purchasing exporters, manufacturers and media companies in Spain, where he sees immense opportunities. Ive been wanting to do a lot of things in Spain for a long time, but the price has been too high, Cisneros, 66, said yesterday at the Bloomberg Markets 50 Summit in New York tied to the magazines ranking of the most influential leaders in global markets, finance, business and government. As the crisis deepened, Cisneros said he decided to look at Spain again. Its a natural market for us. These are good companies, especially companies that export to Latin America. Spains IBEX 35 Index (IBEX) of stocks dropped 22 percent in the past 12 months as concerns mounted that Europes sovereign debt crisis was cutting off banks access to wholesale capital markets. Spain, the euro regions fourth-largest economy, has a 21 percent unemployment rate and posted a budget deficit equal to 9.2 percent of gross domestic product last year, the regions highest after Greece and Ireland. Spain is going to be fine. We know Spain quite a bit and we can relate to the culture very well, Cisneros said. Media obviously in Spain for us would be a natural, but I dont discard manufacturing companies. Im not interested in banking. The Cisneros Group, which took in $1.5 billion of revenue in 2010 and has its headquarters in Miami, provides Univision, the leading Spanish-language broadcaster in the U.S., with 40 percent of its content.

Chinese Investment
Cisneros said Chinese companies are outdoing U.S. competitors in partnering with Latin American firms as leaders in the worlds fastest growing major emerging economy seek to expand their presence in the region. China is making inroads into Latin Americas agricultural, infrastructure and mining industries because its foreign policy has emphasized economic cooperation and outreach to the region. Its more difficult to get U.S. companies excited about going to Latin America, he said. China has a foreign policy which is directed toward cooperation with business, and the government has directed that toward investment in Latin America, Cisneros said. In the United States, the private sector forgot about Latin America investment.

Joint Ventures
Cisneros is setting up joint ventures with Chinese banks to carry out investment in Latin American commodities industries. China accounts for 9 percent of foreign direct investment in Latin America, trailing only the U.S. and Holland, according to the United Nations Economic Commission for Latin America and the Caribbean. Cisneros, who first traveled to China in the 1980s, is expanding into deals with the Chinese after shedding beverage and consumer-goods companies and America Online Latin America since the early 1990s to focus on his Venevision television network. Cisneros inherited the company from his father in 1970 and took over a fortune built by expanding Venevision and representing U.S. brands such as Studebaker, PepsiCo and Burger King in Venezuela. Cisneros and his family are worth $4.2 billion, according to Forbes magazine. The 58-year-old company employs about 8,000 workers.