Latin American M&A activity produced more deals and moved far greater capital in the second quarter of this year compared to the same period in 2016. This year there were 509 deals registered (+3.25%), and the total value from 218 non-confidential deals was US$33.0bn, an 86.4% increase from the year before.

The region is on pace for a standout year in terms of deal valuation, as the total amount from the 412 deals that reported values from January to June reached US$74.4bn - an 85.3% increase over the total in the same period of 2016, according to data from M&A research firm Transactional Track Record (TTR).

There were 1,026 total transactions through June, a 5.34% increase.

TTR also recorded 45 private equity operations in the region for 2Q17, 18 of which reported values totaling US$2.87bn, reflecting a 5% increase in the number of operations and a 72% jump in total value.

There were 64 venture capital deals in May for the region with 33 reporting values totaling US$669mn, a 16% increase in the number of deals and a hefty 389% increase in reported values, according to the research firm.

From January to June, Brazil generated the strongest activity in the region with 512 operations, an 8% increase, where the total value of disclosed sums hit US$44.46bn - 220% more than the reported value in the same period in 2016.

Despite investor uncertainty this year, Mexico came in second with 148 operations, only 1% more than in 1H16, and reported values totaling US$10.74bn, a 13% decrease.

Exhibiting some weakness in 2017, Chile recorded 120 operations (+13%) with reported values totaling US$5.12bn (-49%). Argentina followed with 117 deals (+13%) and total reported values up 3% to US$3.64bn.

While Colombia saw only 78 deals in the period (unchanged), the reported values totaled US$13.13bn, up 155% year-on-year, making it the second most active nation in the region in terms of capital mobilization.

Peru saw 58 operations from January to May - a 27% decrease, as well as a 26% drop in total reported values to US$1.67bn.

Latin American firms targeted the US and Canada in eight deals and Europe in four operations.

TTR reported that European firms demonstrated the strongest interest in Latin American firms, targeting the region in 67 operations in the first half of 2017, while 59 firms in the US and Canada and 19 companies in Asia carried out operations in Latin America. Seven deals came to the region from Oceanía as well as one from an African firm.

Tomás Gurmendez, a partner at Uruguayan transaction specialty law firm Posadas, Posadas & Vecino, in an interview with TTR, noted the growing level of M&A activity in recent years, adding, "2017 has been no exception."

The strong activity in 2017 "shows that, despite a certain amount of political instability that some countries have faced in the region, Latin America continues to be a very attractive region for international investors."

"In Uruguay's case, 2017 began somewhat slowly, but has notably picked up since April," said Gurmendez. "We are seeing a great many M&A operations in the agro-industrial and agro-forestry sectors, which makes sense being that Uruguay is a producer-nation for farmed commodities. We have also been seeing many operations in the retail industry and in renewable energy."

Source: Business News Americas / BN Americas - Chile