Latin America's M&A Landscape in H1 2024: Resilient Growth Amidst Challenges

By Velizar Velikov, Head of M&A Database at EMIS

M&A volumes in Latin America surged by over 52% year-on-year, reaching nearly USD 44bn in the first half of 2024, primarily fueled by significant transactions in the Telecoms and Food & Beverage sectors. This impressive growth occurs against a backdrop of slower dealmaking due to macroeconomic challenges and political uncertainties that have cast a shadow over the region.

Despite a 9.5% year-on-year decline in total deal numbers, attributed to ongoing difficulties in securing start-up funding, the second quarter saw a notable uptick in transaction volumes. Seven deals surpassed the USD 1bn threshold in the first half of 2024, a marked increase from just four during the same period last year. 

The standout transaction was the USD 11.7bn capital increase of Brazilian telecom giant V.Tal, where financial group BTG Pactual raised its stake in Brazil's largest fibre-optic neutral network operator to 83% from 69%. This mega-deal was unique in Brazil as deal-making slowed amidst the sharp devaluation of the Brazilian Real against the U.S. dollar, alongside ongoing debates regarding fiscal policies and concerns surrounding the country’s fiscal health.

Colombia emerged as a surprising leader in deal value, with aggregate transactions skyrocketing nearly ninefold to USD 7.3bn, driven by two major acquisitions. Businessman Jaime Gilinski, in partnership with UAE conglomerate International Holding Company (IHC), acquired a 45.5% stake in food giant Grupo Nutresa through a USD 3.5bn share swap. Additionally, Gilinski secured an extra 22.5% stake in Grupo Nutresa for USD 1.23bn via a tender offer. Colombia also hosted Latin America’s third-largest deal in H1 2024, with El Salvador’s largest supermarket chain, Grupo Calleja, acquiring an 86.8% stake in retailer Grupo Еxito for over USD 2bn through a tender offer.

In Chile, despite a marked slowdown in overall M&A activity, the market saw a noteworthy transaction with the USD 1.25 billion acquisition of financial services firm Grupo Security by local player Bicecorp. Looking forward, the second half of 2024 could bring a resurgence in M&A activity, bolstered by the Chilean government raising its growth forecast to 2.7%, supported by stronger-than-expected economic indicators and rising copper prices, the country’s primary export.

Argentina, although relatively quiet in the first half of 2024, could become a hotspot for large deals following President Javier Milei's successful passage of his economic reform bill in June. This legislative shift is expected to boost M&A activity in the coming months. Key privatisations are anticipated, with power plant builder IMPSA drawing interest and ExxonMobil potentially divesting its shale assets in Argentina for an estimated USD 1bn.

In summary, while challenges remain, Latin America’s M&A landscape demonstrates both resilience and growth potential, setting the stage for a dynamic second half of 2024.

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