Q2 2021 Mergers & Acquisitions: Latin America Rising

Opportunity abounds. Energy charges on.

2 March 2021


When it comes to early-stage deal flow, Q3 2020 was remarkably strong for Latin America (LATAM) — even the global economy was in crises for most of last year.  

Now, the region is coming back to life for what is looking to be an interesting year ahead. The mood in LATAM among dealmakers is hopeful.   

As an indicator of what’s to come, Q4 2020 saw the highest new-deal origination here in eight quarters. Companies are still feeling motivated due to the historic low in interest rates, making equity a better option to retail investors seeking the local stock market for higher yields. We’re also starting to see a couple of larger deals coming to fruition, and a strong pipeline is building with a mix of sectors and deal sizes.

The LATAM boom isn’t without its COVID-19-related obstacles. Due diligence remains a challenge. The slowdown caused by partially operating entities that supply necessary documents and certificates not only causes a slowdown but requires extra attention to compliance. 

The path to growth

So which sectors are driving the current growth?  Energy has been a market mover — especially in Colombia and Mexico — because of the high average size of deals and the amazing potential of this industry here. Healthcare and Education are both poised for a boost.   

The turnaround to normalcy expected by the new year has been gradual rather than immediate, though. The process of rolling out COVID-19 vaccinations has been slow, and Brazil has suffered some bad publicity to investors. But the pandemic has given the local players a huge opportunity to shine —which is what the league tables also showed for last year with massive results for mid-market players and larger local Banks.

Overall, given the strength of local players, LATAM’s domestic markets are looking stronger —and more confident— despite all the bad news. The M&A market for the next six months looks brighter than it did a few months back, but the true star will again be IPOs; every other day a new company is made public. The start of the year gives us enough reasons to believe that there will be decent numbers of deals being done in H1 2021. 

Find out more in the Q2 2021 edition of the SS&C Intralinks Deal Flow Predictor. Independently verified as a highly accurate six-month forecast of merger and acquisition (M&A) activity, the quarterly report is compiled by tracking early-stage M&A transactions globally that are in preparation or have begun due diligence.

Along with our forecast of M&A activity for the next six months, the latest issue includes:

  • Spotlight feature: What’s ahead for M&A in Big Tech now that governments have them under expanded scrutiny for antitrust? Learn how global approaches to antitrust may shape the tech landscape going forward.
  • An interview with Raquel Perez Martin, executive Investments and M&A director Europe and Brazil at EDP Renováveis (EDPR), about the surge in transactions across the renewable energy sector — and what promise ESG holds for M&A.

Luiz Felipe Machado Intralinks

Luiz Felipe Machado

Luiz Felipe Machado is the Latin America Head at SS&C Intralinks. Since joining Intralinks in 2013, he has been directly involved in hundreds of M&A deals and 50+ IPOs in Latin America.

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