The Latin American market has become a fundamental pillar for multinational companies linked to the automotive industry, which are seeking to expand and strengthen their operations in the region.
Inchcape, one of the world’s leading automobile distributors, signed an agreement to acquire the Chilean company Derco. In this way, the British company will absorb the southern company, whose shareholders will become owners of the parent company.
Inchcape currently operates in more than 40 countries, with a broad portfolio of brands. It entered the Americas in 1993, selling new BMW vehicles and spare parts in Chile and Peru.
Derco is the largest automotive distributor in Latin America, with operations in Chile, Peru, Colombia and Bolivia. This will extend Inchcape’s distribution leadership in the region, which will generate significant additional revenues and cumulative margin gains for the Group.
Benefits and Scope
According to Inchcape, this merger significantly expands its position in highly attractive and fast-growing markets within Latin America.
The merger is also expected to generate significant value creation through enhanced growth prospects and the delivery of significant recurring synergies.
Inchcape looked to Derco because it represents a well-managed company, strongly aligned culturally and strategically with its vision. Notably, the Del Rio family, owners of Derco, will become a shareholder in Inchcape.
Inchcape’s CEO for the Americas and Africa, Romeo Lacerda, believes that the company’s scale and geographic diversification, along with its track record of successful integration, talent engagement and retention, and market-leading digital and data capabilities, provide a solid platform for continued profitable growth and superior value creation.
For his part, Derco shareholder and board member Juan Pablo del Rio notes that in addition to its established reputation for distribution excellence, Inchcape is the undisputed leader in digital and data in the Americas.
“This is an increasingly important area for automotive OEMs and one of the reasons they are so supportive of our proposed combination,” the executive added.
Deal Details
The deal is valued at just over US$1.5 billion and upon completion, Derco’s owners will become shareholders of Inchcape with a 9.3% stake.
The deal, which took place in London, was managed by JP Morgan, Bain & Company, Barros & Errazuris and White and Case, among others, who ensured strict compliance with the interests of their clients and that the deal complied with Chilean and British legal regulations.
