Mexico marked a weak start to the year for M&A, with research firm Transactional Track Record (TTR) reporting just 20 transactions in the first month of 2020.

This number of deals was 33% fewer than in January 2019, while the reported deal values were down 76.5% to US$640mn.

The slow opener for 2020 comes despite greater certainty arriving in the Mexican marketplace with the ratification of the USMCA trade agreement in the US Senate, meaning enactment of the Nafta replacement treaty is likely to take place in June or July this year.

“Despite the low transactional dynamics that it usually presents in the first months of the year, Mexico remains one of the most active countries in the region in terms of mergers and acquisitions,” said Marcela Chacón, TTR research and business intelligence analyst for Latin America, in comments to BNamericas.

With the rules of the game made clear on USMCA, speculation is mounting that a backlog of deals could begin to move, a surge in activity that may have also been held up by firms waiting to gauge the business climate during the first year of the socially focused administration of President Andrés Manuel López Obrador.

“The vast majority of companies interested in entering the Mexican M&A market have cordoned off some time in their decision making, readying to move forward on plans in the coming months for expansion and investment in, really with Mexico, such a strategic territory for Latin America,” added Chacón.

Source: Business News Americas / BN Americas - Chile