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The effects of low global energy prices and currency devaluation are rippling through Latin America. Aggregate deal value in the region has trended downward slightly since 2H14, but deal volume has hardly declined. In the final months of the year the pace of M&A will pick up following a summer lull.
Brazil, among the hardest hit by macroeconomic challenges and a slowdown in China, still accounts for the most transactions by a wide margin, with nearly the same number of inbound M&A deals as all other Latin American markets combined in the first half of 2015. As the Brazilian economy stagnates, strategic buyers taking a long-term view are finding a window of opportunity to enter the market and distressed investors see bountiful prospects.
Services and distribution, technology and telecoms, industrials, real estate, construction, energy, natural resources and infrastructure will continue to account for the lion's share of deals region-wide in 2H15.
TTR intelligence indicates strong appetite from the EU, North America and Asia for Latin American assets. It may take another 18 months to see a real turnaround in the public finances of the region's largest economies, many of them heavily dependent on oil revenues. In the meantime, state-led efforts to diversify federal revenue streams, maintain infrastructure development programs and stimulate lackluster growth will favor greater participation of international investors and encourage cross-border transactions. Sovereign bond issues in the international market will also help buoy public coffers.
This Report includes:
- Latin America Overview
- Private Equity Insights
- TTR Intel Volume
- Brazil & The Southern Cone
- Mexico & The Pacific Alliance
- Central America & The Caribbean