LatAm M&A deals outstrip expectations in Jan-Sep

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Friday, October 14, 2016

The value of M&A, private equity and venture capital deals in Argentina, Brazil, Chile, Colombia, Mexico and Peru jumped 53% year-on-year in 3Q16 to US$45.8bn, while the cumulative total for January-September was up 14% year-on-year to US$99bn, according to data from research firm Transactional Track Record (TTR).

"The market was more active than we expected at the beginning of the year. Fewer transactions but for a substantially higher value," Andoni Hernández Bengoa, head of the Iberian desk at law firm Demarest was quoted as saying by TTR.

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"Chinese investors and sovereign funds have been investing heavily in assets in the electricity sector, and we expect these deals to continue for the rest of the year," he added.

In January-September there were some 1,460 transactions, up 1% year-on-year, with values disclosed for 664.

Some of the main deals completed so far this year include the acquisition of CPFL Energia by China's SGCC for US$5.3bn and the purchase of the local subsidiary of HSBC by Bradesco in Brazil for US$5bn.

COUNTRIES

Argentina was the most active country in the region in January-September, as the total value of deals jumped 346% year-on-year to US$7bn in 76 transactions with disclosed value.

Brazil recorded transactions for US$58bn, up 45% year-on-year in 317 deals with a disclosed value.

The value of deals in Chile and Colombia increased 184% and 60%, respectively, to US$15.6bn and US$9bn.

On the other hand, the value of deals in Mexico and Peru dipped 24% and 39%, respectively, to US$23bn and US$3.8bn.

The financial services and insurance sector was the most active in Argentina, Chile, Colombia and Peru, while the technology sector saw the most activity in Brazil and real estate was the busiest sector in Mexico.