M&A Looks to Inter-regional Deals for Pickup

Asians, Americans and Europeans acquiring regional assets is likely to remain the dominant theme for M&A in Latin America for at least the remainder of the year, bankers say. “The pillars of what we’ve seen over the last few years continue to be valid, which is Brazilians consolidating the local markets, and foreigners moving into LatAm as a whole,” Jean-Marc Etlin, head of Itau BBA Investment Bank, tells LatinFinance. Private equity activity in the region is also a consistent driver, he says. Larger and cash-rich companies in LatAm looking beyond the region is still a less established trend. Bankers say the segment has barely scratched the surface of European divestures in LatAm, and there could be many more to follow. That said, there have also been some interesting additions – ranging from Spanish toll road operator Abertis to Dutch vitamin producer Royal DSM – by Europeans who can still afford to buy. “Buying in Europe is not as easy as people think. It is easier for Europeans to buy in Latin America,” Gerardo Mato, CEO of HSBC global banking, Americas, tells LatinFinance. “If you are cash rich, you are trying to buy companies at very acceptable multiples, and try to grow it from there. We are seeing Latin Americans interested in buying European assets, and what we are seeing is also a lot of Europeans reassessing whether to sell at current multiples.” The league tables, heavily influenced by AB Inbev’s $20bn purchase in July of a 50% stake in brewer Modelo, put Bank of America Merrill Lynch in the lead with $43.30bn from 20 deals through August 24, according to Dealogic. The US shop is followed by JPMorgan ($41.00bn from 26) and Lazard ($32.65bn from 15). BTG Pactual has earned the most revenue, with $75m, or 49% of the pool.