Reply #48: Goldman Sachs Negotiating Joint Venture With Brazilian Investment Bank, So

[54anickel]

Goldman Sachs Negotiating Joint Venture With Brazilian Investment Bank, Source Says


http://biz.yahoo.com/ap/050118/brazil_goldman_sachs_2.html

SAO PAULO, Brazil (AP) -- Goldman Sachs Group Inc. is negotiating with a major Brazilian investment bank to create a joint venture aimed at tapping into opportunities in South America's largest economy, a source familiar with the discussions said Tuesday.

Rio de Janeiro-based Banco Pactual SA ended talks some time ago with other financial institutions in favor of a proposed partnership with Goldman Sachs, said the source, who would speak only on condition of anonymity. The talks, however, have not yet generated a firm agreement, the source said.

Sao Paulo's Valor Economico, a Brazilian business newspaper, reported Tuesday that the two banks would create an investment bank called Goldman Sachs Pactual worth about $2 billion. Goldman Sachs and Banco Pactual both declined comment in the report.

Valor, which first reported the negotiations, said the deal could be announced within several weeks and would involve swapping shares. Goldman Sachs would end up owning more than 40 percent of the new company but less than a controlling stake.

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Brazil's investment banking climate has improved substantially over the last two years in tandem with the rebounding economy. Investors were spooked by the election of Luiz Inacio Lula da Silva to the presidency in 2002, but Brazil's first leftist leader surprised experts by sticking to market-friendly orthodox monetary policy in a bid to put the country on a path toward slow, sustainable growth.

The country's economy rebounded 5 percent last year after a near-recession in 2003, and 2005 growth is expected at 3.5 percent. Last year also saw a wave of IPOS for news shares in Brazilian companies in a spurt of dealmaking unheard of in recent memory, with predictions of more to come.

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