February M&A activity across Latin America was defined for a second month by fewer deals in Brazil and some recovery in Mexico, producing a total of 116 transactions with 37 reported deal values amounting to US$5.73bn.

As a region, this reflects a 14.1% decrease in the number of operations compared to February 2017 ­ and a 12.3% drop in reported deal values, according to research firm Transactional Track Record (TTR).

There were 263 M&A deals closing in January and February, a 13.8% decline from the same period a year before, while the total reported value from 103 of these transactions came to US$11.7bn ­ down 19.5% y­o­y.

The slower overall activity in the first two months emerges principally from the 20% y­o­y reduction in M&A transactions with Brazil, which remains the region's most active territory with 119 deals in January and February.

Furthermore, reported deal values in Brazil totaled US$3.89bn, off 69% y­o­y.
Asked about the drop in Brazil, TTR analyst Marcela Chacón told BNamericas, "These results are due to various political and economic circumstances of its partners in Latin America, which have affected investment data in recent months."

"In addition, this year is a period of key elections, not only in Brazil, but throughout Latin America, which generates an atmosphere of uncertainty in the investment environment, and which consequently affects to some extent the dynamics of the mergers and acquisitions market," said Chacón, the firm's Latin America research and business intelligence analyst.

The region's second largest economy, Mexico, saw 53 transactions in the same period, up 39% y­o­y, as well as a 35% increase in reported deal values to US$1.35bn.

Activity in the remaining territories was mixed­to­positive in the first two months. Argentina saw 42 transactions (+75% y­o­y) with disclosed deal values at US$1.07bn (+155%). The number of deals in Chile fell to 20 (­55%), though deal value rose 40% to US$209mn.

Colombia saw a 19% increase in number of transactions with 25 deals in January and February, with disclosed values climbing 77% to US$258mn.

Smaller territories shining in 2018

Though only recording 20 M&A transactions in the first months of the year, Peru had one of the biggest deals of the year ­ US­based Mosaic's acquisition of a 40% stake in the Miski Mayo phosphate mine for US$1.4bn, in a follow up to its purchase of Brazil's Vale Fertilizantes.

The largest deal in February, according to TTR, occurred in Puerto Rico with Banco Popular de Puerto Rico's US$1.7bn acquisition of the assets and loan book of Reliable Financial Holding Company.

Private equity and VC

TTR noted a 45% drop in the number of private equity deals in Latin America with six taking place last month; however, the total capital raised in the transactions ­ US$105mn ­ was a 157% increase over February 2017.

February saw 25 venture capital deals, roughly the same as a year before and eight of these disclosed values totaling US$48.7mn, a 13% increase.

Source: Business News Americas / BN Americas - Chile