May was another weak month for M&A deals in Latin America with reported value in 52 disclosed operations amounting to US$5.66bn, a 25% drop from May 2018, while to total number of transactions were up by 4%.

The latest results further reflect what has so far been a very weak M&A year, said research firm Transactional Track Record (TTR) in its latest report for the region.

From January to May, there have been 819 M&A operations in Latin America, 8.62% fewer than in the first five months of 2018. Of these, 335 disclosed price tags amounting to US$43.3bn, 10.1% less than in the same period a year before.

Regional ranking

TTR reported that Brazil continues to be the most active country for M&A in the region, having generated 453 deals in January-May, 8% fewer year-on-year. Meanwhile, disclosed deal value in the period came to US$25.6bn, down 6% y-o-y.

Mexico followed with 112 operations (down 30% y-o-y) with disclosed deal value off 2% y-o-y to US$9.41bn.

Chile jumped a spot from the previous monthly ranking with 90 M&A transactions in January-May, up 6% y-o-y. Total disclosed deal value jumped by 69% to US$4.11bn.

Colombia also showed more positive results, recording 83 operations (+17% y-o-y) with a 62% increase in the price tags that were made public, to US$2.25bn.

Peru rose in the ranking with 55 operations (down 19% y-o-y), while disclosed transactions value amounted US$1.92bn, dropping 56% from the level seen in January-May 2018.

Argentina, struggling with its economic slump, registered 54 operations in the period, down 44% y-o-y, with a decline of 51% y-o-y to US$2.019bn in terms of disclosed price tags.

Cross-border activity

TTR reported that Latin American firms were primarily interested in targeting properties in Europe and North America (US and Canada) in May, with 22 outbound deals for each.

Inbound deals, likewise, primarily originated in North America and Europe, with 111 and 103 operations, respectively.

Private equity and VC

Private equity operations in Latin America have been off this year with TTR reporting 45 equity deals in the January-May period (-27.4% y-o-y) with capital for disclosed transactions amounting to US$3.92bn, 13.2% less than seen in first five months of 2018.

Venture capital transactions, as well, have been fewer and smaller this year. TTR reported 81 VC deals taking place from January to May with reported operations amounting to US$679mn. These results reflect a 12.5% y-o-y drop in the number of operations and a 45.2% reduction in the reported capital moved in the VC operations.
 

Source: Business News Americas / BN Americas - Chile