Latin America’s first full cross-border merger of stock markets has ended with more of a whimper than a bang.
Colombia and Peru announced quietly over the weekend the cancellation of their plans for a corporate merger that would have created a company with market capitalisation of $378bn and trading volumes of $33bn.
The deal was all but signed and sealed when Ollanta Humala was elected president of Peru on June 5.
Shortly after Mr Humala came to power, the bolsas announced the deal was being put on hold only to give Mr Humala’s new administration information “before it is finalised”.
Just days after Mr Humala’s election, Kurt Burneo, one of the president’s closest economic advisers, said the deal had been done “too quickly”, with an “asymmetry” in the distribution of benefits between the countries.
The merged company would have been split 64 per cent to 36 per cent between Colombia and Peru.
The bolsas have given no comment on the reasons for the cancellation, which is a blow to liquidity for two of Latin America’s fastest-rising economic stars.
In a statement, the bolsas said only they had “ended their efforts at a possible merger” and would now focus their efforts on Mila (Chile, Colombia and Peru’s integrated cross-trading platform).
Mila got off to a slow start amid global markets turmoil, regulatory hitches and tax concerns (only trading some $2m in stocks since it started trading in May).
But today, Mila launched an index of its top 40 traded shares in conjunction with S&P. The weighting of the index reflects the relative depths of each country’s capital markets, with 22 companies from Chile, 12 from Colombia and six from Peru.
Its top five stocks are Peruvian miner Buenaventura, Ecopetrol of Colombia, Saga Falabella and Copec of Chile and Pacific Rubiales of Colombia.

http://blogs.ft.com/beyond-brics/2011/08/29/colombia-peru-bourse-fusion-fizzles/#axzz1WcbaOWtN