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M&A Watch: LatAm sees double-digit growth in deal value

By BNamericas Friday, August 10, 2018

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M&A activity across Latin America produced 1,101 transactions in the first seven months of 2018, up 9.8% year-on-year, with 449 reporting deal values totaling US$54.9bn, or 11.2% more capital moved than in the same period of 2017.

In July alone, M&A research firm Transactional Track Record (TTR) recorded 125 operations with 52 reporting total deal value of US$2.67mn. This represents a 30.6% drop in the number of transactions from July 2017 and a 60.1% y-o-y decrease in reported capital moved in the transactions.

YTD ranking

Brazil leads TTR's ranking of most active countries in the region with 567 transactions, though this was 6% less than the country saw in the same period of 2017, while total reported capital mobilized in deals over the first seven months was 1% less at US$30.7bn.

Mexico, the only country in the region to see more deals in the first seven months compared to last year, followed in the ranking with 567 deals, up 16%, while reported deal values were down 2% to US$7.75bn.

Argentina produced 126 transactions in the period, down 9%, while deal values fell 24% to US$2.64bn.

Chile was next with 117 operations, down 18%; however, reported deal values rallied 77% to US$7.69bn. The high value total stemmed from Chinese lithium giant Tianqi's US$4.07bn stock purchase from Canadia's Nutrien in shares of Chile's SQM.

Meanwhile, Colombia registered 85 operations (a decrease of 11% y-o-y), with a 46% drop in total deal value compared to the same period last year (US$1.42bn). Though coming in last, Peru showed mixed behavior, recording 83 operations - a 9% decrease y-o-y, though mobilized capital jumped 207% to US$5.74bn in the period.

Cross-border activity

Generating two outbound deals in July, North America attracted more interest than any other region outside of Latin America.

Europe and North American were the most active regions to target Latin America properties in inbound deals, generating 15 and 12 deals in July, respectively.

Private equity and VC

There were 74 private equity deals from January to July. Of these, 25 disclosed the deal values totaling US$3.54bn. The results imply a 20% decrease in the number of operations and 38% increase in the total reported value of the deals, compared to the first seven months of 2017, TTR said.

TTR reported 186 venture capital deals taking place in the region in the seven months, of which 111 disclosed deal values totaling US$1.11bn. This represents a 9% increase in the number of transactions and a 6% increase in total reported venture capital mobilized.

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