Publish in Special Reports - Wednesday, January 14, 2015
Mexico's energy reform is likely to push up M&A activity in the country this year, experts say. Here offshore rigs in Campeche. (Photo: Mexico's Navy)
See our special report on Latin America 2015
Experts optimistic about M&As in Mexico this year, but split on Brazil.
BY JOACHIM BAMRUD
Experts predict a mixed outlook for mergers and acquisitions in Latin America this year.
“We see strength in M&A activity in the region for 2015,” says Paul Schnell, Chair of the Latin America Practice at Skadden. “Although conditions are variable, they are much less volatile than in the past, as the markets have continued to become more stable… This increase in confidence, even if tempered, will embolden companies and private equity firms to continue to do deals.”
Antonio Del Pino, Co-Chair of the Latin America Practice at Latham & Watkins, agrees. “The year 2015 should be a good year for M&A in Latin America, with Mexico leading the way,” he says. “Latin America continues to show positive growth and good overall economic policy management. Investors from Asia, Europe and North America are exhibiting strong interest in actively looking for opportunities in the region. In addition, the availability of equity and debt capital for regional deals seems to be greater than what we’ve seen in the past.”
Last year, the value of announced M&As in Latin America increased 17.7 percent to $145.5 billion, according to Thomson Reuters. That compares to a 22.4 percent decline in 2013. However, the number of deals fell to 1,320 last year from 1,478 in 2013.
“Lower growth rates in the short term (but still higher than in many other parts of the world) could have a positive impact on how investors perceive pricing of targeted assets and businesses,” argues Todd Crider, Partner and Co-Head Brazil at Simpson Thacher. “Strategic investors from Brazil ...
Keywords: Bolivia, Brazil, Central America, Chile, Colombia, Ecuador, Latham & Watkins, Mexico, Pacific Alliance, Simpson Thacher, Skadden
Latin America 2015: M&A Outlook Q&A