Brazil Merchant Bank BTG Buys Stake In Local Mitsubishi - WSJ.com

Brazil Merchant Bank BTG Buys Stake In Local Mitsubishi
SAO PAULO (Dow Jones)--Brazilian merchant bank BTG Pactual said Monday that it has acquired a minority stake in Mitsubishi Motors do Brasil in a bet that the country's auto market will grow for decades to come.

'There is no exit strategy with this purchase,' said Carlos Fonseca, president of the private-equity division at BTG. 'We are not in this for the short or medium term. This is a long-term marriage that is confident the Brazilian economy will expand and that the auto market will grow along with it,' he said.

Eduardo Sousa Ramos, president of Mitsubishi Motors in Brazil, said that the two have been courting each other since early 2009. BTG will gain one seat on the five-member board. No figures were given for the deal, announced late Monday.

'We did not seek out BTG because we are looking to increase capital or looking for funding for new projects,' Ramos said. 'BTG will have a small stake in the company and it will allow us to have access to long-term financial resources that will help us better plan for the Mitsubishi's future in Brazil,' he said.

Mitsubishi opened its first Brazilian assembly line in September 1998. It makes the costly twin cabin L200 pick-up in Brazil.

Mitsubishi, a unit of Japan's Mitsubishi Motors Corp. (MMTOY, 7211.TO), is a small auto company in Brazil. It was ranked the No. 7 seller of pick-up trucks and sport-utility vehicles in January with a 5.8% market share, according to sales reported last month by the National Automotive Dealerships Association, or Fenabrave.

Fiat SpA (FIATY, F.MI), General Motors Co. and Volkswagen (VLKAY, VOW.XE) were the top three with a combined market share of 50.4%.

Brazil sold 3.1 million vehicles in 2009, up from 2.8 million in 2008. Expectations are for the industry to sell at least 3.3 million in 2010.

-By Kenneth Rapoza, Dow Jones Newswires; 5511-2847-4541; kenneth.rapoza@dowjones.com