Last week, Colombia’s financial regulator approved the takeover of Nutresa, the country’s largest processed food producer by Nugil, a company controlled by Grupo Gilinski and the Royal Group. Nugil aims to acquire between 50.1% and 62.6% of Nutresa.
A partner at a Colombia management consultancy commented, “Nutresa’s shareholders are very conservative, making it a stable share, but the business margins are low. The company has been widely criticised for some costly investments, such as Hamburguesas del Corral; however, it continues to be a successful business.”
Nugil is formed by Grupo Gilinski, a holding company of the Colombian banker and real estate developer Jaime Gilinski, and Royal Group, a UAE conglomerate. The Emirati interest was key for the First Abu Dhabi Bank to provide a USD 1.08 billion guarantee which has received the green light from the Colombian Securities Exchange. Sheikh Tahnoon Bin Zayed Al Nahyan, a brother of Abu Dhabi’s Crown Prince Mohammed bin Zayed, is the chairman of First Abu Dhabi Bank.
A Senior Executive in the banking sector in Medellín commented, “Gilinski’s investments are usually supported at a high-level with important business groups, investors and politicians, which should make the transaction easier.”
“Gilinski’s investments are usually supported at a high-level […] which should make the transaction easier.”
Senior executive, banking, Colombia
However, Grupo Argos and Grupo Sura, two of Nutresa’s largest shareholders, with a combined stake of 45%, claim that Nugil has not provided complete documentation in relation to its takeover offer, creating uncertainty and making it impossible to perform a comprehensive analysis of the deal.
“Entering Medellín is very difficult,” explained a former special advisor to President Duque, “and acquiring one of the big companies there is not easy, they will defend themselves. You have to understand the local context, Nutresa, Argos, Bancolombia, Suramericana, they are like a syndicate, they are all tangled together, all the executives sit on each other’s boards and entering this group as an outsider won’t be simple.”
“Entering Medellin is very difficult and acquiring one of the big companies there is not easy, they will defend themselves. You have to understand the local context.”
Former special advisor to President Duque
Gilinski also has history with the syndicate, “It has Gilinski’s lawyer, Nestor Humberto Martinez, who had a part in the President of Bancolombia going to jail. This made Gilinski look like an enemy of the Antioqueño Syndicate and it took him 10 years to recover that relationship although some discomfort still exists.”
The offer came as a surprise to Nutresa’s current ownership which will now have the opportunity to make a counteroffer. Grupo Sura is in conversations with minority shareholders of Nutresa to encourage them to prevent Nugil from taking over the food group.
The proposed transaction, which could amount to USD 2.2 billion, is part of a planned expansion of UAE’s interests in Latin America. Gilinski said that the transaction will bring a major global investor to Colombia that will benefit all companies in the country and, more specifically, in the Antioquia region where Nutresa is based. Gilinski claimed, “it will be a breakthrough in the Colombian capital markets, enabling a significant change, which I think is needed.”