Brazilian Lender Banco Daycoval Plans to Raise Close to $1 Billion in IPO, Amazon's AWS to Invest $236M in Brazil to Strengthen Cloud Infrastructure, Mexico Aims to Boost Business With Brazil's 'Very Closed' Economy, and More
Other featured stories include: Harvard Business Review: How to Build Trust with Business Partners from Other Cultures, Mobile Banking Alternative BNext Expands into Mexico, Latin American Hotspots for German Software Player SAP, Ericsson to Launch LatAm 5G networks in 2020-21, Business Insider Moves into Mexican Market as Other U.S. Publishers Exit, Uber Suspends User Accounts of 240 Mexicans After Drivers Possibly Exposed to Coronavirus, and Henry Reyes: The Underdog Billionaire From Colombia.
Brazilian Lender Banco Daycoval Plans to Raise Close to $1 Billion in IPO
Brazilian lender Banco Daycoval SA is planning to launch an initial public offering in April, a strategic move that would re-list its shares on the São Paulo Paulo stock exchange three years after taking the company private.
The New York Times reports that the bank’s founders, Ibrahim and Sasson Dayan, and other family members have hired investment banking units of Itau Unibanco Holding SA, Banco BTG Pactual SA, Bank of America and Banco Santander Brasil SA to manage the IPO.
The offering could reportedly raise between $3 billion (545.7 million pounds) and $4 billion Reais ($956 million USD). Banco Daycoval, which lends to small and mid-sized companies in addition to consumers, plans to issue new shares and raise money to boost its business. According to sources close to the matter, the Dayan family also plans to sell existing shares.
This plan emerges after the Dayan family decided to delist the bank in late 2016, after the shares fell to roughly half the value of the first IPO in 2007. The family paid $9.08 Reias a share to take the bank private, a substantial discount to its debut price in 2007 of $17 Reais a share.
The family is now counting on a recovering Brazilian economy and high valuations for a series of financial startups to boost the shares’ value in the second IPO.
Daycoval will join a wave of Brazilian financial institutions that are listing their shares. Broker XP Inc. made its debut on Nasdaq in December, and is valued at more than $22 billion USD.
“Focused on both consumers and small- and mid-sized companies, Daycoval has roughly 32 billion reais in assets. It posted a net income of 647 million reais in the first nine months of 2019 and a return on equity of 24.6%” (The New York Times).
Amazon's AWS to Invest $236M in Brazil to Strengthen Cloud Infrastructure
On Wednesday, the São Paulo state government said the cloud computing unit of Amazon.com Inc. will invest 1 billion Reais ($236.18 million USD) in the Brazilian state over the next two years to strengthen its infrastructure in South America.
“With this major investment by AWS, Amazon’s cloud computing business, we will create more jobs, technology and also opportunities for startups,” governor João Doria said in a statement.
As reported by Reuters, this news emerges as the company strives to expand its in online retailing in the increasingly competitive Brazilian market, where well-established local players pose a challenge to international competition.
In December, almost a year after launching its first in-house fulfillment and delivery network in Brazil, Amazon announced plans to open a new distribution center in the northeastern state of Pernambuco.
Mexico Aims to Boost Business With Brazil's 'Very Closed' Economy
Last Friday, Economy Minister Graciela Marquez said Mexico is negotiating with Brazil to expand economic cooperation and believes it can find areas of mutual benefit.
For years, Mexico’s dominant automotive has been seeking to improve access to Brazil’s auto market, while Brazil has conversely sought to protect local industry. In March, the two reached a deal to liberalize trade of light vehicles.
“Brazil is a difficult country, it’s the opposite of Mexico… Mexico is a very open economy, Brazil is very closed,” she said at a government news conference.
Marquez said Mexico was talking to Brazil, in addition to its second-biggest Latin American trading partner, Argentina, to broaden existing economic cooperation agreements. Marquez added that she believed there were areas “ripe for growth” where the two economies complemented each other (US News).
“We’re sitting at the table with Brazil to expand (our) complimentary agreement and see the possibilities of making a broader, more ambitious agreement,” said Marquez.
Later on Friday, Brazil’s foreign trade secretary Marcos Troyjo said that the country is very interested to work on a broad deal with Mexico.
As reported by US News, Troyjo stated it was not in the interest of Brazil and its partners in the South American trade bloc Mercosur to work on a deal that targets only some specific sectors. Troyjo also said Mercosur will seek a post-Brexit deal with the United Kingdom.
“Total trade between Latin America’s two biggest economies was worth $14.7 billion in 2018, according to Mexican data. Bilateral trade volume fluctuated significantly under the previous government of Enrique Peña Nieto and has yet to surpass the $15 billion peak reached in 2013” (US News).
Harvard Business Review: How to Build Trust with Business Partners from Other Cultures
The Harvard Business Review interviewed 82 managers from 33 different countries in four regions of the world identified by the World Bank as the “engines of the global economy”: East Asia, the Middle East and South Asia, North America and Europe, and Latin America. The managers they interviewed were diverse in terms of gender and age, and they represented various industries and business functions.
The managers were asked, “How do people in your culture determine if a potential business partner is trustworthy?” Their answers revealed systematic cultural differences in how trustworthiness is interpreted and the implications for how managers should approach these partnerships.
Below are the findings for Latin America:
Importance of Similar Values
In Latin American cultures, the social relationship comes first, and the business second. Shared values are the primary criteria for judging trustworthiness.
“Find out if (they) have same values as you do.” — manager from Brazil
“They trust me because they think that I am similar to them.” — manager from Colombia
“If you perceive that there are values that are not shared … that is where you decide [whether] things can continue … or [whether you’re] not really willing to have the next conversation.” — manager from Bolivia
According to this research, Latin American managers rely on the opinions of others as a first step in determining the trustworthiness of a potential new business partner. The main focus of these managers was eliminating those with poor reputations.
A manager from Mexico stated, “If you heard one guy wants to make an alliance with you, and three or four former shareholders say that he’s very corrupt … I think that’s very, very important, because … if he stole from other guys, he will [probably] do it to you” (Harvard Business Review).
As made evident in the testimonials below, assessing shared values required making a personal connection.
“Before negotiation, engage in social contact — no business talk.” — manager from Nicaragua
“[Small talk] in Latin America is very important…and a good way that we’ve found to do it is by sharing a meal. We try not to talk business. We just get to meet each other … see if we have things in common. Most of the time, we do.” — manager from Mexico
“When you get them talking about their family, about something that they like talking about … even if you try … you cannot hide yourself … for the whole two hours. There will be like five minutes where you’re going to show your true colors, right? That’s what you want to see. … Are they open? Are they transparent? Or are they shady? Are they suspicious? [You want to see] their true self, the one that you’re going to be working with.” — manager from Chile
How Do You Assess Trust with Potential Business Partners?
Full participation in social activities. Partners should be prepared to be open about themselves, their interests and hobbies, and family situation. Learn about the partner’s business and community, including their family and values, so that you can move the conversation beyond small talk.
Mobile Banking Alternative BNext Expands into Mexico
Spanish startup Bnext is expanding beyond its home country as it rolls out its product in Mexico. According to Tech Crunch, 170,000 people have signed up to a waiting list, who will be the first invited users before signups open to everyone.
As an alternative to traditional bank accounts, the platform allows customers to open a Bnext account in minutes using a mobile app. A few days later, users receive a payment card. Money is then uploaded money to the Bnext account, and users can send and spend money all around the world.
Unlike many traditional retail banks, Bnext plans to attract customers with cheaper international transactions.
Spanish customers traveling abroad can withdraw money up to three times per month and spend as much as €2,000 per month without any foreign exchange fee. When you reach those limits, you pay 1.15% to 1.5% in foreign exchange fees. Mexican customers will get two free withdrawals per month (Tech Crunch).
Bnext goes beyond providing users with an account and card. In Spain, the company is building a financial hub to help users manage your money across multiple financial services. Bnext users can lend money to small and medium businesses and earn interest through the financing platform October, or save money using Raisin. In addition, users can secure a loan, a mortgage, insurance products, and more.
Tech Crunch reports that Bnext expects to launch its marketplace in Mexico at some point during the second half of 2020. The company also expects to expand to other countries in Latin America in the future.
To date, Bnext has attracted 300,000 active users in Spain. In the last 12 months, the startup has processed €430 million across 11.6 million transactions.
Latin American Hotspots for German Software Player SAP
Brazil, Mexico, Peru and Argentina were hotspots for German software giant SAP in Latin America last year.
“We are all familiar with the challenges the country [Argentina] faced in 2019. In spite of that, we’ve seen our cloud business growing double-digit. And this is because of a continuous focus on driving cost-efficiencies even in a country that has been impacted severely by inflation and depreciation,” Claudio Muruzabal, head of SAP in Latin America, told BNamericas.
Muruzabal said Latin America demonstrated “exceptional performance in the cloud.” In Q4, SAP reported double-digit growth for its regional revenues for both on-premise and cloud solutions. This was also the 18th consecutive quarter of cloud growth in the region.
Worldwide, the cloud computing and software segment contributed €6.86 billion (US$7.57bn) of revenue in Q4. Total sales were €8.04 billion (BNamericas).
More specifically, financial services and consumer products stood out in the region, with double-digit growth last year. According to Muruzabal, the company added 4,000 Latin American customers in the past year, contributing to a new total of 46,500 in the region.
SAP expects 2020 revenue in the range of €29.2 to €29.7 billion on a constant basis.
Although the company doesn’t break down financials per geographies, Muruzabal claims SAP’s 2019 results came “ahead of the IT industry in general” in the region.
Ericsson to Launch LatAm 5G networks in 2020-21
5G networks could arrive in Latin America sooner than anticipated as the wireless technology is expected to catapult enterprises into the fourth industrial revolution.
Deployment in Latin America “will happen in 2020-21,” Erik Ekudden, head of GF technology and CTO at Swedish manufacturer Ericsson, told BN Americas during a visit to the manufacturer’s headquarters in Kista.
Ericsson is working with at least five countries - Mexico, Chile, Argentina, Colombia and Puerto Rico - that already have some type of 5G to launch a network. The company closed 2019 with 24 active 5G networks and 78 agreements with commercial operators in 14 countries, according to the company’s last quarterly report.
Photo Courtesy of BNAmericas
“We have a lot of important customers in Latin America and manufacturing as well. It is an area that is very well-positioned for 5G although they are having a low deployment of 5G in comparison to the rest of the world,” Ericsson’s executive vice-president and head of business area network, Fredrik Jejdling, said.
While Jejdling did not disclose how many contracts the company is pursuing in the region, he mentioned that the corporation’s global strategy was “to develop and sell the technology in all markets no matter where they are” and to adjust to their political restrictions (BN Americas).
“I believe we are competitive, there is no doubt about that. This is a very competitive environment…it’s up to the customers to determine the value of technology,” he said.
Business Insider Moves into Mexican Market as Other U.S. Publishers Exit
Over the past few years, it is becoming increasingly common for American media companies to shut down operations in Mexico rather than to be launching them.
As reported by Nieman Lab, BuzzFeed shuttered its news team in Mexico City a year ago; HuffPost dropped the Mexico vertical it had launched in time for the 2016 U.S. presidential election last March; The New York Times dropped NYT en Español this past September. Spain-based El País stopped printing its Mexico edition in December.
Despite this trend, Business Insider launched a new Mexico edition this Tuesday — as first reported by the Mexican business newspaper El Economista last month — making it the first of its dozen-plus international editions to focus on Latin America. The Mexico edition plans to cover business and innovation in the country as it relates to Business Insider’s broader mission of “better capitalism”.
“We arrive in Mexico with the certainty that our journalism is a determining factor in the migration towards a better capitalism and a more inclusive economy, one in which we all have a seat at the table. We are interested in sharing stories by and for Mexicans who share these convictions,” Antonio Castañeda, CEO of Business Insider Mexico’s license partner Mediasurf, said in a release.
The publisher’s optimism might stem from their pre-existing reach in the country. According to Nieman Lab, without any committed presence in the region, Business Insider was already generating about 800,000 unique visitors in Mexico per month.
Verónica Galán, Business Insider Mexico’s editor-in-chief (and former editor of CNNExpansion.com), said there’s a younger audience that she thinks will be drawn to the site’s style of coverage.
“Business news coverage [in Mexico] continues to be the hard news story, where X stock rose X percent,” she said. “It doesn’t really help you as a regular person how that stock rose or fell. With BI Mexico, we want to break away from that and make information accessible for everyone, for young people, for business people who are starting to see what they want to start, or those who want to develop their talent.”
Uber Suspends User Accounts of 240 Mexicans After Drivers Possibly Exposed to Coronavirus
Uber Technologies Inc. has suspended 240 accounts in Mexico to contain the potential spread of Coronavirus.
The Los Angeles Times reports that the suspended users had ridden with two drivers who came into contact with a possible Coronavirus case, according to a statement posted to the company’s Mexican Twitter account. There have been no confirmed cases of the virus in the country to date.
“We will keep users and drivers informed with respect to any update of their accounts,” the company said in the statement, adding that it will work in a coordinated manner with authorities.
Mexico City’s Health Ministry confirmed that an Uber driver had carried a passenger from Los Angeles who was possibly infected with the Coronavirus. The agency stated that suspected cases would be isolated and studied to confirm or discount possible contagion.
Henry Reyes: The Underdog Billionaire From Colombia
In 2007, Colombian billionaire Henry Reyes sold Cablecentro for nearly half a billion dollars to Mexican billionaire Carlos Slim: the founder of Telmex (presently “Claro”), which remains the biggest Telecom company In Colombia.
Following the sale of Cablecentro, Reyes and his partners created Filigrana, a diversified investment company. A few years later, Reyes has decided to reenter the telecom business in Colombia, with the acquisition of HV TV and Cable-Bello to form Hv Television Sas; which was recently renamed Hv Multiplay.
Slim and Reyes are now competing for the Colombian telecom sector, as Reyes’ new venture “Hv Multiplay” gains traction.
While Hv Multiplay is only the fifth-largest company in the telecom sector (ahead of ETB, which is owned by the state), it is the fastest-growing telecom company in Colombia. According to Yahoo Finance, the company has captured 4.9% of the market, which is unprecedented for a new venture in the sector.
While Reyes’ investments are focused primarily on the telecom business, he also has a significant presence in the real estate, media and entertainment, retail and sports sectors. His magazine, Más Que Ver, is widely distributed throughout Colombia.