M&A Comes Roaring Back

LatAm M&A is on a tear, opening up the possibility of a slew of investment banking and ancillary financing fees. Volume of announced deals jumped to $18.4bn last month versus $12.2bn in January 2009 and $10.8bn a year earlier, Dealogic data shows. “CEO confidence is way up,” says Marcus Silberman, head of M&A for the region at Credit Suisse. “You have to look at it in a relative sense: LatAm and China are doing much better and are growing a lot more than developed markets,” he adds. Since the year began, the region’s 5 largest M&A deals, both ongoing and announced, add up to $25.0bn, including Vale’s purchase of Brazil fertilizer assets ($6.3bn), Braskem’s Brazil and US acquisitions ($1.2bn), Femsa’s sale of beer assets to Heineken ($7.6bn), Cosan’s JV with Shell ($4.9bn), and CSN’s live bid for Cimpor ($5.4bn). January 2010 was the busiest month for announced M&A in the past 10 years, according to Dealogic. On top of that, the period includes Carlos Slim’s telecom asset rollup, which is worth $27.8bn. Not counting the America Movil-Carso-Telmex transaction, January ranks as the third most active month for announced deals in the past 3 years for LatAm. Pent up demand for acquisitive growth, combined with the fact executives in both emerging and developed markets believe parts of LatAm are in better shape now than they were even 2 years ago, adds fuel to the fire. Financing markets are also accommodating, making planning for big ticket purchases an easier task for CFOs. “There is financing and credit available for M&A,” says Silberman, noting issuers have made good use of local and cross border options in both equity and debt markets.