The energy transition remains the main fuel of the process of company mergers and acquisitionsboth globally and in Argentina. This behavior became very marked during the first half of 2024 and is projected to be the great driver of M&A operations for the remainder of the year.
The companies of mining and metals They are one of the main protagonists of this process, as providers of the transformation of the energy sector towards a more sustainable reality. In this description studies carried out by two of the main global auditors coincide that have a presence in Argentina.
As reported by the international auditor PwC in the most recent edition of the report “Global M&A Trends in Energy, Utilities and Resources 2024 Mid-Year Outlook”the second half of 2024 is shaping up to be a dynamic period for M&A, driven by strategic consolidation, portfolio optimization, the impact of international regulations, and an emphasis on sustainability and energy security.
Also highlighted is the fact that in the mining and metals sector, companies are expected to continue to ensure the supply of critical minerals for the energy transition, while in the case of oil and gas, a strong consolidation movement is expected, as companies seek to diversify their assets and generate synergies.
“The reconfiguration of the industry is setting the course for mergers and acquisitions. In Argentina, we see a trend to strengthen supply chains and diversify investments to adapt to the new energy reality. Companies must make strategic decisions that allow them not to not only survive, but thrive in an environment where sustainability is key,” said Ezequiel Mirazón, partner at PwC Argentina, leader of the Energy, Mining and Utilities practice.
The study also highlights that Sustainability is a fundamental driver in investment decisions, since companies are prioritizing projects that allow them to reduce their carbon footprint, taking advantage of government incentives in both the United States and Europe.
Given this scenario, the report highlights that Argentina is in an advantageous position to capitalize on this trend, because Renewable sectors, in particular, continue to gain traction due to the need to finance new infrastructure projects.
And he adds that the energy transition represents an opportunity for Argentine companies adopt cleaner technologies and, at the same time, optimize their operations through strategic alliances. This is not only crucial for local growth, but also for staying competitive globally.
“This report reveals that, with this reconfiguration underway, it is expected that M&A activity continues to grow, specifically in the energy, utilities and resources sectors for the remainder of the year. This is how consolidation, combined with a focus on energy security and sustainability, will be key to facing challenges and taking advantage of opportunities in the global market,” concluded Ignacio Aquino, partner at PwC Argentina, leader of the Deals practice.
Energy concentrates the largest investments in Argentina
During the first half of 2024, the market for purchases and mergers (M&A) of companies in Argentina registered a total of 40 operations (18 in the first quarter and 22 in the second), totaling an amount of 1,093 million dollars, according to a survey from the auditor KPMG.
The number of operations surveyed by KPMG Argentina marks an improvement of 29% compared to the last six months of 2023, although if the same period of last year is taken, a decrease of 5% is observed.
Ramiro Isaac, director of M&A & Debt Advisory at KPMG Argentina, highlights that “the sectors that that have generated the greatest investment attraction have been Energy and Natural Resources, with 33% of operations, and Technology, Media and Telecommunications, with 18%.”
In that sense, the report highlighted the transaction that occurred within the Energy and Natural Resources industry: GeoPark, Latin America’s leading company in oil and gas exploration, operation and consolidation, reached an agreement with Phoenix Global Resources (subsidiary of Mercuria Energy Trading) to acquire stakes in four oil blocks in Neuquén and Río Negro.
“The operations corresponding to hydrocarbon deposits, lithium, gold and solar energy projects, have led to the Energy and Natural Resources industries to the highestbeing the sector with the largest number of transactions in which buyers from Canada, China, Australia, the United States and the Netherlands, among others, have participated. These industries They will be the ones that will continue to lead organic investments and corporate transactions in the country for the next few years,” added Ramiro Isaac.
Regarding the general conditions that the country offers for greater development of M&A operations, Isaac stated: “The challenge of Argentina is to achieve a reconfiguration of macroeconomic balances that enable a business environment more conducive to investments, both organic and inorganic. “There are sectors in the country with high growth potential that could attract a greater number of investors to the extent that systemic risks are mitigated.”
Source: Ambito
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