10/29/2008 14h19
Crisis accelerates acquisitions in the building area
DCI 10/29/2008
Even after the Federal Government's accepting the companies' demand of injecting R$ 3 billion (US$ 1.4 billion) in order to make the market grow and bring liquidity back, the expectation of the house building sector is of a setting change, in which the expectation, in the best case-scenario, is that until 2010 the segment should suffer a stronger reduction, in which the number of companies should be reduced by half and that the large companies, traded in the Stock Exchange (Bovespa), go from 25 to 12, at the most. One indicator of this move, which will be now be accelerated due to the crisis is that, from September last year to September this year, Inpar, for example, had profitability losses of 93.7%. Abyara lost 89.8%, and Tenda, 86.8%. So, the money of the government to help the sector, foreseen in a program that should be published today, may even finance the sales of real estate and accelerate the fusion and acquisition processes of the 25 companies of the segment traded in the Exchange. For João Crestana, president of the Housing Union (Secovi-SP), the crisis should be responsible for the acceleration of the fusions and acquisitions. "In some place of the world there are 25 big developers, as we have in the Bovespa. In spite of the crisis, they should amount to six or eight large groups. Without the crisis background I believe that this process would take about three and four years. Now, it will take two, due to the low price of the stocks and the lack of cash of some companies." Crestana also remembers that the process has already been happening in the sector. "Not long ago, before the beginning of the crisis, Gafisa took over Tenda, Company and Brascam. Tricury and Incossul merged and formed Trysul. There is the case of Cyrela, which bought Agra's investments, among other cases."
