Monthly report of M&A market: Latin America- Nov, 2017

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Total number of transactions fell by 23% in Latin America

  • LatAm Deal volume fell 23% in November 2017
  • Aggregate deal value fell 51% to USD 7.4bn
  • Deal of the Month: IEnova acquires a 50% stake in Ductos y Energéticos del Norte from Pemex Transformación Industrial

Scope of the Latin American market

  • The total number of announced and closed transactions in Latin America fell by 23% in November over the same month in 2016, according to TTR data.
  • Aggregate transaction value fell 51% relative to November 2016 to USD 7.4bn, considering 65 deals of disclosed consideration region wide.
  • Total transaction volume YTD is up nearly 4%, meanwhile to 1,887 deals, though aggregate value has slipped 23% to 88.3bn in the first 11 months of the year, taking into account 810 announced and closed transactions of disclosed consideration across Latin America.

TOP SIX M&A MARKETS IN LATIN AMERICA

  • Brazil leads deal flow regionally with 974 transactions together worth USD 53.2bn to the close of November, up 6% by volume and 6% by aggregate value compared to the first 11 months of 2016. There were 426 announced and closed transactions with a disclosed consideration in Brazil contributing to aggregate value in the first 11 months of the year.
  • Mexico follows with 265 deals worth a combined USD 17bn, down 2% by volume and down 40% by aggregate value relative to the same 11-month period in 2016, taking into account 125 deals of disclosed consideration.
  • Chile ranks third regionally, its 217 deals YTD together worth USD 8.6bn to the close of November, up 17% by volume and down 36% by aggregate value over the first 11 months of 2016, taking into account 91 transactions of disclosed consideration.
  • Argentina ranks fourth in Latin America with 199 announced and closed deals worth a combined USD 5.3bn, up 10% by volume and down 68% by aggregate value, considering 87 transactions for which a deal value was disclosed to the end of November.
  • Colombia follows in fifth place regionally with 149 deals in the first 11 months of the year, up 3% over the same period last year. Aggregate deal value fell 81% to USD 3.6bn, taking into account 56 transactions of disclosed consideration.
  • Peru rounds out the top six M&A markets in the region, its transaction volume down 14% to 114 deals, its aggregate deal value up 9% to USD 5.8bn relative to the first 11 months of 2016, taking into account 54 transactions of disclosed consideration.

CROSS-BORDER DEALS

Bidders based in Latin America made four extra-regional cross-border acquisitions in November, one targeting a company in North America, and three with targets in the EU.

North American buyers led inbound acquisitions in the region during the month of November, with 21 deals originating from the US and Canada. EU-based acquirers made 10 inbound deals in the region, while a sole Australian buyers made an acquisitions in Latin in November.

DEAL OF THE MONTH

TTR selected the IEnova’s USD 231m acquisition of a 50% stake in Ductos y Energéticos del Norte from Pemex Transformación Industrial as Deal of the Month in November. The Mexico City-based pipeline operator was advised by Mijares, Angoitia, Cortés y Fuentes, while the state-held oil company subsidiary used DLA Piper Gallástegui y Lozano Mexico as legal advisor and BBVA Bancomer as financial advisor.

INTERVIEW WITH ROBERTO MACLEAN

Roberto MacLean, partner at the law firm Miranda & Amado Abogados

“I consider that in Peru the restrictions for financial assistance could be deleted under some conditions, protecting minorities against conflicts of interests that may appear between the interests of the purchased shareholder and minorities. This situation It’s better than restrict it completely.”

Read the full interview.

 

LATIN AMERICA: APRIL DEAL VOLUME DOWN MODERATELY WHILE VALUES SURGE

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  • Deal volume in Latin America fell 7% in April 2017 over April 2016
  • Aggregate deal value increased 223%
  • Deal of the Month: OMERS acquires 34.6% stake in GNL Quintero
TTR Insight

According to TTR, from January to April 2017, deal volume in the Argentine Oil and Gas sector increased 450% over the same period last year. Specifically, there were two transactions in the first four months of 2016 compared to 11 in the same period in 2017.

 

Deal volume is up 4.7% YTD in Latin America with a total of 668 announced and closed transactions in the first four months of 2017. The aggregate value of the 257 transactions with a disclosed consideration region wide has increased 124%, meanwhile, compared to the same January-April period in 2016.

Top Six M&A Markets in Latin America

Brazil leads the top six most active M&A markets with 342 deals together worth USD 35.7bn YTD, up 5% by volume and 292% by aggregate value compared to the same four-month period in 2016.

Mexico and Chile are tied with a total of 87 announced and closed deals apiece to the close of April, though with USD 8.7bn in aggregate value from 34 deals of disclosed consideration, the region’s largest Spanish-speaking market nearly triples the USD 3bn sum of the 37 deals of disclosed value recorded in Chile YTD.

Deal volume is up 5% in Mexico, while aggregate value is down 2% compared to the January-April period in 2016. In Chile, deal volume is up 28% YTD while aggregate value has declined 53% relative to the first four months of 2016.

Argentina is but eight deals behind Mexico and Chile with 79 transactions recorded in the first four months of the year, up 25% over the corresponding period last year. Aggregate deal value is up 75% in Argentina to USD 3.1bn, putting it just ahead of its Southern Cone neighbor by the total consideration of all transactions in the country in the first four months of the year.

Colombia is down 19% by deal volume and up 281% by aggregate value with a total of 44 transactions to the close of April, 16 with disclosed consideration worth a combined USD 11.8bn.

Peru rounds out the top six M&A markets in the region, despite a 30% decline in deal volume to 35 and a 37% fall in aggregate value to USD 1.1bn, taking into account the 19 transactions of disclosed consideration.

Cross-Border Deals

Latin American firms made four outbound acquisitions in April 2017, two with targets based in North America, one in Africa and one in Australia. Inbound acquisitions were led predominantly by North American buyers, with 25 deals led by firms based in the US or Canada, followed by the EU, represented by 19 transactions, Asia with six and Australia with two buyers targeting companies in Latin America.

Deal of the Month

TTR selected Ontario Municipal Employees Retirement System’s acquisition of a 34.6% stake in Chile-based GNL Quintero from Enagás Chile and ENAP for USD 341m through its Borealis Infrastructure fund as Deal of the Month. GNL Quintero operates a liquefied natural gas reception, storage and regasification terminal. Claro y Cia. Abogados advised the buyer while ENAP was advised by Philippi, Prietocarrizosa Ferrero DU & Uría Chile and Enagás Chile by CMS Carey & Allende.

 Interview with Luis Felipe Arze from CMS Carey & Allende

(Interview in spanish)

Last year, Mérieux NutriSciences Corporation, Illinois, United States-based, acquired 65% of Chilean entity Laboratorio Labser. CMS Carey & Allende partner Luis Felipe Arze advised the buyer.

 

TTR in the Press

AMÉRICA ECONÓMICA – “Fusiones y adquisiciones crecen 223% en América Latina”

LA REPUBLICA – “Monto de fusiones y adquisiciones creció 124% en la región”

EL ECONOMISTA – “Mercado transaccional de AL registra aumento de 223% en abril”

Rankings – Financial and Legal Advisory

Find the TTR ranking of financial and legal advisors (year to date) in our monthly report. Click to download.

LATIN AMERICA: COMBINED DEAL VALUE GREW 75% IN 1Q17

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  • Deal volume was up 4% to in 1Q17 over 1Q16 to 501 transactions regionwide
  • Aggregate deal value grew 75% in 1Q17 over 1Q16
  • Deal of the Quarter: Coca-Cola and Coca-Cola Femsa acquire AdeS from Unilever for USD 575m

 TTR Insight

The aggregate deal value of transactions in the industrials sector in Latin America grew by 527% in 1Q17 compared to the same period last year. The growth in aggregate deal value contrasts with deal volume in the sector, which was down from 69 deals in 1Q16 to 50 in the first three months of 2017.

The leading source markets for cross-border deals in Latin America in 1Q17 were the US, with eight transactions together worth USD 1.9bn, followed by Brazil, with 18 transactions worth a combined USD 1.07bn, and Luxembourg, with a sole transaction worth USD 1.01bn.

 

 

The total combined value of announced and closed transactions in Latin America stood at USD 38.2bn in 1Q17, up 75% over the same quarter last year, according to the latest TTR data.

Deal volume increased more modestly in the quarter at just over 4% over 1Q16 for a total of 501 transactions region-wide, of which 184 had disclosed considerations contributing to regional aggregate value.

Transactional Ranking by Country
  1. Brazil led the top six most active M&A markets by deal volume in 1Q17, with 256 transactions announced and closed in the quarter worth a combined USD 19.9bn, representing a 6% increase in volume and a 249% increase in aggregate value over 1Q16.2. Mexico followed as the second-most active M&A market regionally, with a total of 64 deals worth a combined USD 6.7bn, a 7% increase in volume and 21% decline in aggregate value over 1Q16.3. Chile ranked third in the region, with a 69 deals announced in 1Q17 worth a USD 2bn combined, a 28% increase in transactional volume and a 47% decline in aggregate deal value relative to 1Q16.4. Argentina followed as the fourth ranked market by M&A volume in the region in 1Q17 with 58 deals together worth USD 1.4bn, a 23% increase in deal flow and a 5% increase in aggregate value over 1Q16.5. Colombia was the fifth-most-active market by announced and closed deals in 1Q17 with 29 deals worth a combined USD 10.8bn, a 37% decrease in volume and a 266% increase in aggregate value over 1Q16.6. Peru ranked sixth regionally, with 27 deals in the quarter worth a combined USD 984m, representing a 25% dip in deal volume and a 30% decline in aggregate value compared to 1Q16.
Outbound Cross-Border Deals

Latin American buyers acquired 23 targets in North America, eight in the EU and one in Asia in 1Q17.

Deal of the Quarter

 

TTR selected The Coca-Cola Company and Coca-Cola Femsa’s joint bid for AdeS, including the target’s operations in Argentina, Brazil, Bolivia, Chile, Colombia, Mexico, Paraguay and Uruguay from Unilever for USD 575m as Deal of the Quarter for 1Q17.

The buyers were advised by Lobo & de Rizzo Advogados, Clifford Chance US, TozziniFreire Advogados, Berkemeyer, Curtis, Mallet-Prevost, Colt & Mosle Argentina, Von Wobeser y Sierra and Clifford Chance Brasil. The seller was advised by Baker & McKenzie US (Global), Trench, Rossi e Watanabe Advogados, Baker & McKenzie UK, Lazard (Global) and Alfaro, Dávila y Ríos.

Rankings – Financial and Legal Advisory

Find the TTR ranking of financial and legal advisors (year to date) in our quarterly report.

TTR in the Press

EL ECONOMISTA AMÉRICA: “Latinoamérica cierra un trimestre récord en el mercado de fusiones y adquisiciones”

ECONOMÍA HOY: “Inversiones en AL bailan al ritmo de la samba”

ESTRATEGIA & NEGÓCIOS: “Mercado transaccional de América Latina crece 4,38%”

Complete Report