Document 11679180

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Sergio Bascuñan R.

International Liaison Partner

6th & 7th Floor.

329 Providencia Ave.

Santiago Chile

Phone: (562) 328-30-00

(562) 328-30-03 direct www.horwathchile.cl

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1.

How would you describe the current climate for M&A activity in Chile?

The strengthening of the M&A processes at companies worldwide, lead to the increment in the changes of property in strategic sectors of the Chilean Economy. The Copper mining and the electrical sector constitute examples of the above.

During 2007, companies of developing countries such as China and India – have become important protagonists of this process as well as Russian and Brazilian Corporations.

In March 2007, the acquisition of Phelps Dodge by the North American Freeport Mc

MoMan & Gold, took place in U.S. 26 billions, giving origin to the second largest mining company of the country.

In the Electrical Sector, recent changes of property in ENDESA Spain by German,

Italian and Spanish Companies, show the importance of this sector in Latin America.

However, this important activity has not only been going on in big corporations. Small and medium size companies are being observed for investment. Thus, Chile it is also an interesting place for foreign investment for its political stability as well as for having an efficient and trustworthy frame work of regulations.

2.

Please characterise your firm’s offering and the ways in which you distinguish yourself from competitors.

Our Firm is committed to be the best alternative to the Big Four in the domestic market and the three key factors of our differentiation are:

Middle-market focus

We have focus and years of experience on middle-market transactions In fact, we have been involved in the major M&A transactions during 2007 for middle companies such us Claxon Group form Mexico( TV and radios stations), York Label from USA ( packaging), Sanvik from Sweden ( mining and construction).

Integrated approach

Providing solutions across finance, operations and technology Our approach simplifies project management for the sponsor and increase project effectiveness

We have: i.

One point of contact for a multifaceted project team ii.

One document request list iii.

One seamless project plan that mitigates the risk of any issues falling through the cracks iv.

One report

Implementation

Once the due diligence is complete, we have the ability to implement our findings. We have a valuable association with the most important law fir specialized in M&A operations, to support the process of legal and tax restructuring

3.

What are the key difficulties associated with cross border M&A in Chile?

Recent surveys indicate that over 60% of all middle-market companies are planning mergers and acquisitions in the next three years. However, over last ten years, more than

50% of all acquisitions failed to live up to expectations.

Based on experience, there are multiple factors causing the lack of success:

Poor deal structure-pricing, tax strategies

Failure to identify problems with quality of earnings

Failure to identify operational and market issues

Failure to realize the cultural implications of an acquisition

Overly optimistic estimates of synergies

4.

How can your firm assist in overcoming such challenges?

We can help clients turn strategic and acquisition goals into reality through our Integrated

Framework for M&A which includes:

 Early identification of “deal breakers”

Identifying opportunities for profit improvement

Identifying risk areas for “first day attention list”

Optimizing benefits ( e.g. tax) via transaction structure

Assessing the quality of management

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