Argentina , Colombia , Mexico , Chile and Peru

Chile M&A rebound possible as January blues hit LatAm deal-making

Bnamericas Published: Thursday, February 13, 2020

Deal-making in Chile may accelerate next quarter after a sluggish January for the country and the wider region.

Research firm Transactional Track Record reported 13 announced and closed deals in Chile for the month, down 61%, while total reported deal value also dropped 61%, to US$473mn.

Financial advisors Hudson Bankers told BNamericas that fallout from the massive social unrest that erupted in October had impacted deal-making but that activity could start picking up in March. 

“In general, we believe the M&A outlook for 2020 is positive in the Andean region [Colombia, Chile and Peru],” Alex Nilsen, M&A specialist at Hudson Bankers, told BNamericas.

“Changes have occurred [regionally] on account of the recent socioeconomic and political developments, which have had two main effects: a delay of about 3-4 months in the timetable of operations already underway and greater relevance of foreign investors because of the strong dollar and the perception that there is an opportunity to buy at more reasonable prices. Local investors are proving to be more sensitive and, therefore, are focusing more on real estate and lower risk opportunities.”

Chile is the biggest deal-making market in Latin America after regional powerhouses Brazil and Mexico. Last year Chile saw 242 transactions, largely flat compared with 2018, with total reported deal value registering at approximately US$13.9bn, up 39.4%, according to TTR. The financial and insurance sectors accounted for the bulk of the volume, followed by real estate, by distribution and retail and by transport, aviation and logistics.

“We expect the volume of transactions to increase in the second quarter mainly because of the processes that have been delayed, which could return levels to normal following the first quarter,” Nilsen said.

Headquartered in Chilean capital Santiago, Hudson Bankers assists local and global clients in developing and executing M&A strategies in the Andean region. 

Fallout from the unrest, which erupted in mid-October, has also impacted businesses’ fund-raising plans. Chilean rating agency Feller Rate estimates issuance of 40mn UF (inflation-linked units, about US$1.43bn) in Feller-rated bonds was put on hold last quarter. The agency expects a “significant part” will be issued this year.

Social tensions have eased in Chile as the government works on a raft of measures including pension reform, although the economy is expected to grow below par this year.


Meanwhile, on a region-wide basis, January saw 110 deals, down 49.8% year-on-year as total reported deal value came in at US$3.72bn, a drop of 58.9%, according to TTR. Last year, 219 deals were reported in January, with 180 and 178 reported in February and March, respectively.

Latin America’s economic engine – sputtering amid external and domestic headwinds – is a factor. Indeed, fellow research firm Mergermarket, an Acuris company, expects deal-making to “remain lethargic” overall this year, citing the economic outlook for the region. 

The IMF expects regional growth to register at 1.6% in 2020, up from an estimated 0.1% in 2019 but below the forecast global pace of 3.3% for this year.

In January, Brazil – which along with Mexico and Colombia is expected by Mergermarket to buck the trend and experience a sizable M&A uptick – saw 62 deals and total disclosed deal value of US$2.09bn, down 45% and 35%, respectively. 

Meanwhile, deal-making in Mexico fell in January but is forecast to accelerate. 

TTR reported 20 deals in Mexico, down 33%, and total disclosed deal value of US$640mn, down 77%.

TTR told BNamericas recently that the “vast majority of companies interested in entering the Mexican M&A market have cordoned off some time in their decision making, readying to move forward on plans in the coming months for expansion and investment…”

Mergermarket has said deal-making activity in Mexico should increase as the business community “settles into the policies of its nationalistic government.”

Policy uncertainty in Mexico is a factor behind weakened private investment which, in turn, has weighed on growth.

Subscribe to the most trusted business intelligence platform in Latin America. Let us show you our solutions for Suppliers, Contractors, Operators, Government, Legal, Financial and Insurance.

Subscribe to Latin America’s most trusted business intelligence platform.

Other projects in: ICT

Get critical information about thousands of ICT projects in Latin America: what stages they're in, capex, related companies, contacts and more.

  • Project: Mexico 2
  • Current stage: Blurred
  • Updated: 8 months ago
  • Project: Mexico 1
  • Current stage: Blurred
  • Updated: 8 months ago

Other companies in: ICT (Colombia)

Get critical information about thousands of ICT companies in Latin America: their projects, contacts, shareholders, related news and more.

  • Company: Infotic S.A.
  • Infotic S.A. is a Colombian state-owned company dedicated to the integration, outsourcing and project management in the industry of the information technology and communications...
  • Company: Juniper Networks Colombia
  • Subsidiary of the multinational Juniper Networks Inc. Dedicated to the network infrastructure and security, has a proprietary operating system for its routers (JUNOS), safety eq...
  • Company: Autoridad Nacional de Televisión  (ANTV)
  • Colombia's national television authority (ANTV) has been responsible since 2012 for providing the tools to implement plans and programs to ensure access to, and the pluralism, c...
  • Company: Honeywell Colombia, S.A.  (Honeywell Colombia)
  • Honeywell Colombia S.A., is one of US-based Honeywell International Inc's South American branches. It started operations 10 years ago, and provides support to the oil & gas indu...