First Half M&A Activity Picks Up

The number of M&A deals in Latin America surged 34% in the first half of the year to 578, compared to 430 in the same period last year, according to Dealogic. However, the absence of large deals, worth over $5bn, in the first half resulted in a 25% drop in overall dollar volumes to $42.7bn, from the $57.7bn registered in the first half of 2006, when the acquisitions of Brazilian telecoms Telemar Norte Leste and TIM were printed, together yielding over $13bn. Also, average deal size fell to $150m, down 38% from $243m in the year ago period, indicating a pickup in mid-cap activity. Brazil was once again the region’s hotspot for M&A, with $15.8bn via 208 deals so far this year, compared to 135 a year ago. “We’re seeing a pickup in the number and frequency of deals between $500m and $2bn,” Luiz Muniz, head of Rothschild Brazil, tells LatinFinance. “M&A activity is benefiting from all of the IPO activity and the liquidity available from local banks in Brazil,” he adds. The top deals in the first half included Eni’s $4.8bn acquisition of oil and gas assets in the gulf of Mexico, SACI Falabella’s $4.6bn purchase of Distribuicion y Servicio D&S, in Chile, and Ternium’s $3.2bn acquisition of Grupo IMSA.