Dealmakers brace for short-term volatility but still expect buyers’ market in Latin America – Trendspotter
- Financial sector, fintech deals are growing trend across the region
- Opportunistic, cash deals expected in Brazil amid confidence crisis
- 2025 to show effects of Mexico’s regulatory soap opera, Trump threats
In 2024, Latin America had its best year in terms of deal volumes since 2022. This year, despite uncertainties related to US President-elect Donald Trump’s second mandate, a regulatory soap opera in Mexico and market tensions in Brazil, opportunistic M&A is expected to continue, according to several dealmakers and investors interviewed by this news service.
Latin America saw M&A volumes of USD 76.1bn across 1,175 deals in 2024, compared to USD 64.8bn and 1,301 deals in 2023, according to Mergermarket data. The last quarter of 2024 saw the best volumes in the year, reaching USD 21.1bn.
The largest Latin American deal of 2024 was AES Brasil Energia‘s USD 2.9bn acquisition by Auren Energia [B3:AURE3].
The financial sector, including fintechs, was cited as an area that will continue active in M&A across the region by most dealmakers and investors. According to Mergermarket data, there was a notable rise in deals in the financial sector in 2024. For instance, Grupo Assa acquired Banco de la Produccion (BANPRO) in Nicaragua, and Grupo Safra acquired Guide Investimentos in Brazil. In Chile, financial services group Bicecorp agreed to acquire commercial and investment banking firm Grupo Security in a deal valued at USD 1.3bn.
Expected deals
For this year, Mexico’s Grupo Financiero Banamex could go through a potential sale or IPO following its recent separation from Grupo Financiero Citi Mexico, said Sergio Garcia del Bosque, managing director at investment bank Seale & Associates.
Mexico’s media group Televisa [NYSE:TV] is in an “interesting context” worth following as it announced in August that it is being investigated by the US Department of Justice over its dealings with soccer governing body Fifa, and that the outcome of the probe could have a material financial impact on the company, said a Mexican investment banker who asked not to be named commenting on this particular subject. The banker pointed out that David Martinez, founder and CEO of Fintech Advisory, acquired a 7.8% stake in Televisa in September, adding that the bidder has made very good investments in Mexico getting into complex situations where he sees value.
Among other movements expected for 2025 are Brazilian airline Azul‘s [B3:AZUL4] potential merger with troubled peer Gol [B3:GOLL4], one of the main deals expected to be analyzed this year by Brazil’s antitrust agency CADE. The acquisition of pet store Cobasi by Petz [B3:PETZ3] is also among CADE’s main deals. Two other noteworthy deals in the approval pipeline are nephrology clinic chain DaVita‘s acquisition of peer Brasnefro and Mexican bakery company Bimbo‘s [BMV:BIMBOA] acquisition of Brazil’s Wickbold.
One of the key trends in Brazil’s M&A landscape is vertical integration in the healthcare sector, said Renata Homem de Melo, partner and head of corporate and M&A at the Brazilian law firm FAS Advogados in cooperation with Germany’s CMS. This trend is particularly important as Brazil’s healthcare system evolves, with more strategic mergers and acquisitions anticipated soon, she said.
Hospital chain Rede D’Or [B3:RDOR3], for instance, is expected to continue on its acquisition spree.
In pharma, France’s Sanofi [EPA:SAN] is auctioning its Brazilian generic drugs subsidiary Medley, with Brazil-based EMS reportedly the front-runner.
In energy, Brazil’s Brava Energia [B3:BRAV3] has received offers for its onshore and shallow water O&G assets. Energias de Portugal (EDP) has reportedly resumed the sale process of hydroelectric power plants in Amapa.
Frontera Energy‘s Colombian sale has advanced to the second round, as reported.
Brazil
Brazil, the largest M&A target in the region in 2024 by deal volume – USD 45bn, compared to USD 33bn in 2023 – was in a recovery curve until 4Q24, when a confidence crisis over the country’s fiscal viability shook financial markets. The Brazilian currency fell to over BRL 6 per USD and the central bank raised interest rates from a low of 10.5% in the year to 12.25% in December.
“We are very concerned with Brazil’s situation from the point of view of corporate finance, including M&A, structured loans and the possibility of loan rollover,” said Salvatore Milanese, founding partner of corporate finance consultancy Pantalica Partners. While expecting an overall weakening in M&A deals in Brazil in 2025, Milanese projects opportunistic and cash-financed deals will continue.
Brazil’s middle market is still a buyers’ market, said Julian Tonioli, CEO of Auddas. “Medium-sized M&A deals are less dependent on open IPO windows or a booming capital market to happen,” the financial advisor said. “The impact of these factors is on price, not on transaction volume,” he added.
Mexico
Targeted in USD 10.6bn in deal volumes in 2024 – compared to USD 9.9bn in 2023 – Mexico has gone through a regulatory soap opera with President Claudia Sheinbaum continuing reforms started by her predecessor.
“The development of several key institutional reforms was at the epicentre of conversations,” said Ariel Fischman, director at Mexican investment banking and advisory firm 414 Capital. The elimination of antitrust agency Cofece generated a lot of noise, as well as the removal of six other agencies, including telecom market regulator IFT and CRE, which oversaw energy prices, Fischman said. The regulation that generated the most panic in the M&A world was the judicial reform, the banker said. “We will have to see how these changes impact M&A in 2025,” he added.
Trump’s tariff threats have spooked Mexican companies more than foreign investors, said Del Bosque. He cited as illustration the acquisition of OVNIVER Group by France’s Compagnie de Saint-Gobain in August 2024. “If the French buyers were scared, they would not have paid over USD 800m for an adhesive tile business,” Del Bosque said.
Chile
Chile was ranked in 2024 as the third destination for M&A with deals valued at USD 8bn, compared to USD 3.4bn in 2023, according to Mergermarket data.
The country’s M&A landscape in 2025 will potentially include sectors such as mining, energy, financial services, fintech, technology services and agribusiness, said Fernando Jamarne, partner of Chilean M&A law firm Alessandri.
More transactions are expected in sectors like agribusiness, financial services, fintech, technology services and travel and hospitality, which are in dollars and don’t have much risk of currency depreciation, said Jose Antonio Cuadra, also a partner at Alessandri. Investors – mainly from China, the US and Europe – who know how to identify strategic opportunities in this context, will be able to capitalize on the country’s potential, Cuadra said.
Other promising sectors are Brazil’s gaming and betting industry, agriculture and agritech, food, infrastructure and mining.
In Mexico, sectors include consumer products, logistics, construction products and industrial real estate as part of nearshoring, which is expected to continue growing not only in the autoparts industry, but also in metal mechanics, chemicals and textiles.