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A R G E N T I N A M&A HIGHLIGHTS

A R G E N T I N A M&A HIGHLIGHTS. Environment for foreign investments. A foreigner can be a 100% shareholder of an Argentine corporation without any restrictions and with the same rights and obligations as an Argentine shareholder.

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A R G E N T I N A M&A HIGHLIGHTS

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  1. A R G E N T I N A M&A HIGHLIGHTS

  2. Environment for foreign investments • A foreigner can be a 100% shareholder of an Argentine corporation without any restrictions and with the same rights and obligations as an Argentine shareholder. • Actually 2 shareholders are required for a corporation, but both can be foreigners (for example: International Acquisitions Inc., International Acquisitions LLC). • The majority of the transactions are “Stock Deals” because the purchase and sale of shares are not subject to any type of tax. • The companies’ Net Profits (Profits after Taxes), as Dividends approved by the Company’s Board of Directors, can be transferred to the foreign shareholders without paying withholding taxes and without prior banking approvals. • The taxes on profits are 35%, although taking into account various deductions, the average tax is somewhat lower. • The inflow and outflow of capital are not restricted in any way. • The companies (and individuals) may hold saving accounts in USD in banks in Argentina and abroad. • The purchase of USD (or EUROS) in the market is subject to practically no restrictions for companies nor individuals

  3. History of foreign investments • During the last 15 years more than 2.500 Argentine companies were acquired by foreigners. • In the last 5 years a total of 450 Argentine companies were acquired by foreigners. • Of the 500 largest companies in Argentina, 335 have foreign participation, of which 290 have more than 50% ownership by foreigners. • More than 500 Argentine companies belong to North American companies. • A few Private Equity Funds are owners of Argentine companies.

  4. Some areas with foreigninvestors • Meat Packers • Soya oil – soya beans (Argentina is the second largest exporters in the world) • Wineries and Vineyards (Argentina is the fifth largest producer in the world) • Call Centers (more than 60.000 positions working mainly offshore) • IT Services (more than 50.000 professionals working in IT as Argentina is a • large exporter of software) • Car Industry and auto parts (Argentina is an important exporter of auto parts) • Building products (tiles, ceramics, adhesives) • Packaging • Mining (gold, silver, copper concentrates) • Petrochemicals • Pharma industry • Energy and oil • Telecommunications • Finance and Banks

  5. Characteristics of Argentine companies • Argentina is a country where the majority of companies are small and medium-sized. • 96% of Argentine corporations have revenues of less than 4 million USD/year, 2% have revenues of between 4 and 12 million USD/year and somewhat less than 2% have revenues of more than 12 million USD/year. (There are about 300 companies with annual sales above 100 million USD.) • Regarding employees, 1% of the Argentine corporations have more than 1.000 employees, 6% have between 200 and 1.000 employees and 93% of the companies have less than 200 employees.

  6. SIDERFIMA background • Siderfima started its M&A Division in 1999. • In the last 10 years it assisted in the sale of some 30 Argentine companies which in their majority were sold to international buyers. • Among the transactions concluded, the following buyers can be mentioned: • Telefonica of Spain • North Hydro (the largest Norwegian company) • Guala Closures (an Italian listed company) • Durlock (the Belgian group ETEK) • ISS (a Danish listed company) • ICT (a public US company) • McCain (a listed Canadian company) • Seidor (a Spanish IT company) • Hicks Muse (a large US Private Equity Fund) • Global Logic,a large USA IT company • Godrej Industries,an Indian large group

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