The fall in purchasing and sales operations of companies in Latin America began to slow down

The corporate transaction market remains dominated by uncertainty and volatility of the global economy. Although new surveys on the mergers and acquisitions (M&A) market confirm this reality, they also reflect a slight change in trends that began to be seen in the regional context.

Latin America registered a total of 2,008 mergers and acquisitions (M&A) operations until the third quarter of 2024, with a cumulative amount of US$52,997 million. This figure represents a 20% reduction in the number of transactions and 11% in their value, in relation to the amounts negotiated in the same period of 2023, according to a report prepared jointly by the international consulting firm AON and the company TTR Data.

Within this regional context, Argentina It is located among the first in the group of countries that are beginning to offer some signs of recovery: registered 150 operations in the transactional market, which imply a reduction of 8% in the number of operations and 3% in terms of mobilized capital, which reached a cumulative total in the period under study of US$2,512 million.

The most important operation in Argentina during this period was that of the company Pharma Pluswhich acquired the pharmacy chain Leader of the province of Córdoba through a disbursement of US$25 million.

Argentina and the context in Latin America

“This year an atmosphere of uncertainty and volatility, as a result of the different global macroeconomic and geopolitical challenges. We observe that Brazil “continues as a leader in M&A operations in Latin America, given its continental extension and diverse business matrix,” analyzed Mónica Camacho, head of Commercial Risk Solutions for the Hispanic South America region at Aon.

“Chile and Mexico They also drive growth in the number of agreements in the region, mainly through transactions with sovereign wealth funds, private equity and pension funds. For its part, Argentina It also seeks its economic recoverywhich can bring international investors closer in the future,” he added.

At the regional level, Brazil led the ranking of the most active countries with 1,169 operations (25% reduction) and a decrease of 11% in mobilized capital, to US$29,720 million, in interannual terms.

In second place is Mexico, with 253 transactions (10% decrease) and with a 10% increase in its amount, up to US$13,197 million, making it the only country with positive results in its mobilized capital. in the region.

Meanwhile, Chile improved in the ranking, with 240 operations (a decrease of 21%) and with a 32% drop in mobilized capital, to US$7,827 million.

In turn, Colombia It drops in the ranking, with 192 transactions (7% decrease), and with a 14% drop in mobilized capital, remaining at US$2,868 million.

Finally, Peruhas registered a 55% drop in its mobilized capital, up to US$2,448 million, but 124 transactions (15% more), which makes the country as the only one with positive results with number of transactions in the regioncompared to the same period in 2023.

Outside the region, the report highlights the investment interest of Latin American companies abroad until the third quarter of 2024, especially in North America and Europe, where 54 and 52 transactions have been carried out, respectively.

For their part, the companies that have carried out the most strategic transactions in Latin America come from North America, with 308 M&A operations, Europe (220) and Asia (70).

The perspectives, according to Deloitte’s view

The report carried out by AON and TTR Data matches with an approach offered by the international auditor Deloitte, which predicts a rebound at the end of the current year in the mergers and acquisitions market in Latin America.

The main bet is placed on the energy industrywhich was the main protagonist of M&A operations in 2023 despite the poor global results.

He attributes this to the result of the wealth of natural resources in the area and the growing global demand for more environmentally friendly solutions.

“Last year, the energy sector represented the highest value transactions due to the wealth of natural resources, the rise in global demand, the attractiveness of strategic investment, energy transition trends and the favorable economic-political climate” , highlights the report. And that is why he emphasizes that “The mining sector could attract large investments in Latin America.”

It also details that there were large operations in segments such as digital transformation and information technology.

“The transition to digital services, as well as demographics and favorable market dynamics, attract greater investment attention for M&A operations in information technologies in Latam,” indicates the Global M&A Trends Survey prepared by Deloitte.

And he pointed to the financial services as one of the most active, with 674 agreements for US$16,249 million. “This market included a wide range of agreements, which covered both the banking and insurance industries, indicating the expansive reach of the sector throughout the region,” he said.

Regarding the challenges ahead, he highlighted that while the push for more sustainable operations creates new investment opportunities, this also requires careful portfolio management and the evaluation of new types of operations with different risk/return profiles.

“The great countries of Latam will experience political changes that can have a significant impact on regulatory and economic policies, influencing M&A activity and investor sentiment (Argentina, Mexico),” the report concludes.