Merger and acquisitions across Latin America will increase next year, driven mainly by operations in Brazil, but also Mexico and Chile, even though both face economic and social crisis.

“Brazil, Mexico and Chile have the most favorable conditions for the dynamics of transactions in the region,” Wagner Marques Rodrigues, research and business intelligence director at consultancy Transactional Track Record (TTR), told BNamericas.

“On the other hand, significant declines can be predicted in Argentina because the downward trend seen in 2019 likely to continue in the next year due to the economic and political uncertainty that this market has experienced in recent months,” added Rodrigues.

M&A transactions were up nearly 2% year-over-year from January to November, reaching 2,070 – including venture and private equity transactions, according to TTR.

Meanwhile, reported deal values reached nearly US$115bn in the period, up 39.5% from the year-ago period.

Brazil concentrated over half of the value and number of all operations in the region, followed by Mexico (US$18.3bn), Chile (US$12.6bn), Colombia (US$10.5bn), Peru (US$7.4bn), and Argentina (US$5.06bn).

The projected M&A scenario is linked with economic and political issues in each country. While economists expect economic recovery in Brazil next year, uncertainty looms in other countries.

“Market volatility in the region may return in 2020, as the process of  elaborating a new constitution in Chile will contribute to the continuation of high uncertainty there, Colombian fundamentals are relatively fragile, the political situation in Peru remains unstable and weak growth and rising violence do not present good fiscal prospects for Mexico,” Itaú Unibanco's chief economist, Mario Mesquita, said. 

Considering all challenges, Latin America’s economy is projected to expand 1.3% in the next year, up from 0.1% expected this year, according to the UN's regional economic commission (Eclac).

Source: Business News Americas / BN Americas - Chile