Companies: in 2024, 73 mergers and acquisitions worth US$3.4 billion were completed

The data comes from a report by First Capital Group (FCG) where the most active sectors in terms of number of Deals were: Technology, Industry, Mass Consumption, Oil & Gas and Banking & Finance, representing more than 75% of total transactions.

“Moments such as the period 2013-2016 or the initial stage of the pandemic were also characterized by drops in the flow of operations, later followed by stages of gradual recovery. In these contexts, Companies not only redefine their investment and expansion strategies, “but they are also going through transformations in their business models, aimed at greater efficiency, optimization of resources and adaptation to new market dynamics, thus preparing for a more competitive and sustainable environment,” said Miguel Arrigoni, CEO of FSG.

“While current levels are still below historical average of 100 annual transactionsthe panorama begins to show encouraging signs of a gradual recovery. This optimism is based on the impulse of strategic sectorsas Oil & Gas, Technology and Miningand in an economic environment that is beginning to provide greater stability and generate a renewed investor interest both local and international¨, explained Arrigoni.

What is Argentina’s position regarding the region?

In regional terms, Argentina maintains its position this year as the fifth most relevant market of M&A in Latin Americawith approximately 8% of transactions. This occurs in a regional context challengingwhere the volume of operations has registered a drop of between 10% and 15% annually.

Brazil continues to lead with close to 60% of operationsfollowed by Mexico and Chilewith levels close to 13%while Colombia has managed to maintain stable activity compared to the previous year.

Despite the current situation, Argentina continues to be a market dominated by small and medium-scale operations. Nevertheless, 2024 has shown encouraging signs with the appearance of larger transactionsespecially in strategic segments that reflect the resilience and potential of the Argentine economy.

Companies: what were the main transactions in 2024

1. Oil & Gas: Pluspetrol led with the acquisition of ExxonMobil Exploration Argentinawhile GeoPark bought four hydrocarbon blocks in the province of Black River to Mercuria Energy Trading. In turn, YPF continued its strategy of getting rid of non-strategic assetsreinforcing its focus on key projects linked to Dead Cow.
2. Financial Sector: The sale of HSBC operations to Galicia Bankmaking it the second largest bank in the country.
3. Energy Sector: The investment of Stellantis in 360 Energyconsolidating its commitment to sustainable energy for its operations in Argentina.
4. Industry & Retail: Newsan acquired the local business of Procter & Gamble in Argentina, marking its entry into mass consumption and the departure of the global giant from the country.
5. Mining Sector: Although he registered a more moderate activity that the previous year, the long term potential remains solid, with Argentina positioned as a strategic destination in lithium, copper and gold/silver. The announcement of Rio Tintowhich will invest u$s2.5 billion to expand the production capacity of Corner project recently acquired.
6. Technology: The sector maintained its constant leadershiprepresenting more than 20% of transactions. Although it does not strictly correspond to M&A, the record capital raising of u$s300 million announced by Ualaconsolidating itself as the largest private injection of this type in Latin America in the last 3 years.

Local vs international investments

According to FCG, this year local buyers represented 52% of total transactions, while international buyers accounted for 48%, reflecting a slight recovery compared to previous years. In this sense, they highlight that international investors maintain a strong interest in local assetsespecially in sectors as Oil & Gas, Technology and Miningwhere they see long-term opportunities and differential value.

Regarding the origin of the buyers, the leadership of North American investorsfollowed by a growing regional participation and one stable presence of European buyersmainly from Spain and United Kingdom.

From a global perspective, Argentina is beginning to recover a positive feeling among investors, who see opportunities in strategic sectors for its resilience and growth potential. In the short and medium term, these sectors should continue to lead activity, while, in a second stageit is possible that the financial investors gain greater presence. If progress towards a more open and market friendly economic frameworkArgentina has the possibility of establishing a investment momentum that reactivates the flow of transactions and attracts new players to the market.

“Argentina has the opportunity to consolidate itself as a more dynamic and competitive investment location. To achieve this, it will be key to capitalize on natural resources, human talent and the regulatory framework. If this is aligned with an economic recovery cycle similar to the one they have experienced other countries in the region, the country has the potential to exceed its historical levels and project an active, diversified and growing M&A market,” concluded Arrigoni.