Currently Mexico has positioned itself as one of the most active M&A countries in Latin America thanks to nearshoring, which has triggered a scenario that reflects a 20% increase in M&A at the corporate level in our country at the beginning of 2024.
According to Forbes Mexico, the outlook for this year looks very favorable in comparison to 2023 in relation to the raising of capital and debt mainly driven by the United States–Mexico–Canada Agreement “USMCA” and nearshoring. The industries that will benefit in the next two years are transportation, manufacturing, logistics, technology, financial services, construction and real estate.
In this sense, the trade conflict between the United States and China continues, which will continue to benefit us with the relocation of companies to Mexico, generating demand in the aforementioned industries.
In terms of cross-border transactions, in the first month of 2024, Mexican companies invested in the United States and Colombia. Meanwhile, Spain has made acquisitions in Mexico. In asset acquisitions, 55 transactions have been registered, representing an 8% increase year-on-year terms.
Likewise, the Latin American transactional market has recorded 151 mergers and acquisitions, both announced and closed, for an aggregate amount of USD$2,248 million since January. These figures imply a decrease of 32% in the number of transactions and 10% in their amount, compared to January 2023. In Mexico, 19 transactions were announced in February 2024, representing an increase of 9 transactions over the previous month. Compared to the same period last year, volume increased by 6 transactions.
According to data recorded by TTR Data, during the month of January, Brazil led the ranking as one of the most active countries in the region by number of transactions, with 103, representing a 26% decrease in operations and a decrease of 11% in the mobilized capital in regards to January 2023. It is followed by Chile, with 13 transactions, representing a 61% decrease in operations and a 69% decrease in amount (US$ 77 million) compared to January 2023. In the case of Colombia, it rises in the ranking with 12 transactions, which represents a decrease of 40% at the beginning of 2024, reflecting an increase of 4,174% in the mobilized capital of USD $465 million.
Argentina decreased its activity and recorded 5 transactions with a 44% decrease and a 227% increase in amount (USD$50 million), making Mexico, together with Colombia, the only ones in the market with positive figures. In last place is Peru with 6 transactions, presenting a decrease of 14% and a 91% drop in its mobilized capital for the equivalent of USD$14 million.
Mexico, in the real estate sector, led M&A activity with 8 transactions announced as of February 2024, representing 27.6% of total transactions announced as of February 2024, representing 27.6% of total transactions during the year. This is followed by the industrial and consumer products sectors, with 2 transactions of Mexican companies announced abroad, representing 25.0% of the total number of transactions during the period, the most significant being the acquisition of the Uruguayan company Pagnifique by the Mexican company Bimbo, according to Seal Associates.
In conclusion, we believe that as a result of global trade tensions, Latin America is favoring new M&A operations, especially Mexico because of its strategic location with the United States and its infrastructure in the distribution and marketing of products covering various industries, many transnational companies are coming to establish themselves in our country so far this year 2024.
In VAHG we provide legal services with great experience in Mergers and Acquisitions, being leaders in this practice in Mexico. We are backed by a solid legal infrastructure with more than 30 years of combined experience, focused on timely assisting our clients with the commitment and integration in the legal framework of Mergers and Acquisitions.
For more information regarding our professional services, our lawyers in the Mergers and Acquisitions Practice are at your service.
| Fernando Hernández Gómez | Senior Partner
Mergers & Acquisitions +52 (33) 38171731 Ext 225 | fhernandez@vahg.mx |
Elvia del Carmen Ríos Saldaña | Partner
Mergers & Acquisitions +52 (33) 38171731 Ext 228 | erios@vahg.mx |
**The publication of this document does not constitute legal, accounting or professional advice of any kind, nor is it intended to be applicable to particular cases. This document refers to laws applicable in Mexico.