LatAm M&A rebounds

The region’s largest economies—Brazil and Mexico—lead the dealmaking revival

M&A is back in Latin America.

As COVID-19 hit the region hard in 2020, M&A volume and value in Latin America and the Caribbean slid 15% and 27% respectively year on year, together logging only 651 deals worth US$68 billon. This year, however, the picture is already much brighter.

There have been 377 transactions in the first half of 2021 with a value of US$66.6 billion—a mere US$1.4 billion shy of the total for the whole of 2020. Half-year comparisons reveal that there has been a 45% rise in volume and a 463% increase in value in 2021.

Brazil and Mexico dominate

H1 2021 activity was concentrated in Brazil and Mexico, with 262 and 26 deals worth US$39.6 billion and US$8.8 billion, respectively.

The International Monetary Fund (IMF) recently boosted its 2021 GDP forecast in Latin America and the Caribbean, fueled by stronger outlooks for its two largest economies. The IMF revised its projections for annual GDP growth in Brazil from 3.7% in April to 5.3% in July, while Mexico’s GDP is expected to increase by 6.3% over this year, a 1.3 percentage point rise from its April projection.

The lion’s share of total value in the region in H1 was poured into the financial services (US$23 billion), energy mining and utilities (US$14.1 billion) and TMT (US$13.4 billion) sectors.

Medical and money matters

The top two deals in H1 came in the financial services sector, although the largest deal was both financial and medical in scope. That transaction saw Bain Capital sell its stake in Notre Dame Intermedica, a health insurance firm, in connection with the US$9.9 billion business combination of Notre Dame Intermedica and Hapvida Participacoes, a Brazilian hospital management services provider.

The merger creates one of the world’s biggest healthcare and medical insurance companies, with a market value of more than US$19.6 billion. The merged companies aim to redraw the region’s struggling healthcare system and provide verticalized healthcare solutions.

Brazil was also home to the second-largest transaction: Itau Unibanco’s spinoff of its 41.05% stake, valued at around US$9.9 billion, in XP Inc., the listed Brazil-based investment management company. The bank had bought almost half of the fintech start-up for US$1.2 billion in 2017, with the intent of taking full control, but closure was then blocked by Brazil’s antitrust regulators, who wanted to preserve the financial firm’s independence.

Fintech in Brazil, and across Latin America as whole, is undoubtedly a sector that both strategics and financial sponsors are eyeing hungrily. The seventh-largest deal of the first half of 2021 saw US giant JP Morgan acquire a 40% stake in Brazilian digital bank C6 for US$2 billion. Meanwhile, VC funding for the fintech sector continues apace—according to Pitchbook, fintech start-ups in the region received US$1.3 billion in 2020, with this year set to outstrip that total. Putting that figure in perspective, only US$236 million was raised by the region’s fintech firms in 2017.

Other notable deals in Brazil included US-based New Fortress Energy’s US$3.1 billion purchase of Hygo Energy Transition, a 50-50 joint venture between Golar LNG and Stonepeak Infrastructure Partners. The transaction elevates New Fortress to a leading gas-to-power company in the country and is expected to add around 15 to 20 terminals by year-end and also expand the reach of New Fortress in South America with three gas-to-power projects in Brazil.

Media moves in Mexico

As for Mexico, the US$4.8 billion merger between US-based Univision Communications and Mexico-headquartered Grupo Televisa was one of the most noteworthy. Together, they will create one of the world’s largest Spanish-language media companies, targeting audiences in both the US and Mexico.

Bolstered by US$1 billion in funding led by Japan’s SoftBank, the Televisa-Univision deal is another example of consolidation among traditional media players as they aim to take on new media streaming giants. The combined entity has plans to launch a streaming service next year and compete with Netflix, which entered Latin America a decade ago, as well as Amazon’s video on-demand service Prime and Disney Plus.

Infrastructure is busy in Mexico as well. In April, Sempra launched a stock-for-stock exchange offer to acquire all outstanding shares of Mexico infrastructure developer Infraestructura Energética Nova, S.A.B de C.V. (IEnova) not owned by Sempra Energy, in a multibillon-dollar transaction.


Brazil and Mexico are expected to continue to dominate the M&A scene in Latin America for the rest of the year. Mexico is benefiting from an improved US outlook while Brazil is enjoying robust trade.

Energy and commodities as well as financial services will remain popular, and some analysts predict that the retail sector could also begin attracting attention as consumer spending increases. The healthcare sector will also remain on dealmakers’ minds, especially in the aftermath of the COVID-19 pandemic.

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