The big beer deal.(Backus y Johnson, Grupo Empresarial Bavaria, and Cisneros Group )

After a lackluster 2001, mergers and acquistions are again on the rise in Latin America. This year's biggest play so far has been the sale of large stakes in Peru's Backus y Johnston--the nation's top brewery--and it has come from multinationals within the region.

* By most measures, last year was not a stellar one for M&A deals in Latin America. While 2001 did witness the sale of Mexico's Banamex to Citigroup for US$12.82 billion, even the most optimistic total for transactions--US$48 billion, according to Deloitte Touche Tohmatsu--showed a steep decline from 2000s record of US$90.25 billion.

This year is shaping up differently. According to Ricardo de Carvalho, a Sao Paulo-based partner of Deloitte Touche, 2002 should witness a jump back to US$55 billion in Latin American M&A transactions.

Beyond the increase, the M&A activity in Latin America this year is more an intra-regional phenomenon, with far less poaching from Spanish and US companies, and far more activity from the "" ranks of Latin American multinationals. One such deal came this past summer when Petroleo Brasileiro SA (Petrobras), Brazil's mammoth state-controlled oil company, agreed to buy 58.7 percent of Argentina-based Perez Compan"" SA for US$1.1 billion.

Coming close on the heels of the acquisition, and approaching the billion-dollar mark, is the recent two-party sale of shares in Peru's largest beer brewing company, Backus y Johnson. First came the US$420 million purchase of 24.5 percent of the voting shares of Backus by Grupo Empresarial Bavaria, the largest beverage company in Colombia and the second largest brewer in South America. Shortly after the Bavaria deal was announced in July, Venezuela's Cisneros Group of Companies announced its own purchase of options to acquire 16 percent of the class. A common voting shares of Backus for approximately US$200 million. Two days later, Cisneros placed an open market order to purchase an additional 7 …