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Deal Trends in Latin America, Issue #12

Highlights

Deal activity has slowed down in LATAM due to the global COVID-19 pandemic. In H1 2020, total deal value across LATAM decreased by 57% while total deal volume decreased by 29% from H2 2019.

While Brazil is still the #1 most active country (representing 57% of all deal volume in the region in 2020 LTM), we saw a reduction of $10bn in total deal value from H2 2019 in this country alone.

Integrated Oil & Gas recorded the largest deal in 2020 LTM from the acquisition of the Venezuela assets from Public Joint Stock Company Rosneft Oil Company by Russia.

Deal activity slows as pandemic escalates

As the COVID-19 pandemic intensified in the Americas within H1 2020, we saw a sharp drop in deal activity – resulting in record low deal activity in Latin America.

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In H1 2020, 325 M&A and Private Placements deals, representing $18.4bn in total transaction value were announced. This represented a decrease of 28% and 48% in deal value respectively, when compared to the same period in 2019. 

While deal value in 2020 LTM is still comparable to 2019 LTM, $61bn and $59bn respectively, we saw a 57% drop in deal value from H2 2019 to H1 2020. Although deal volume shows steady growth in Q2 2020, due to the ongoing uncertainty of Coronavirus, it is difficult to predict when the pandemic will end and when deal activity will fully return to normal.

Even from Q1 2020 to Q2 2020, we saw one of the largest quarter-to-quarter drops in deal value (72%) and the largest drop in deal volume (32%).

So far in 2020, there was only one transaction with a deal size greater than $1bn, whereas there were a total of 13 in 2019 and 12 in 2018. Canceled deals over $1bn trended slightly higher in 2020 – two in H1 2020, compared to one in 2019, and two in 2018.

While the largest deal in H1 2020 was an M&A recorded in March at an impressive $3.9bn – the acquisition of the Venezuela assets from Public Joint Stock Company Rosneft Oil Company (Integrated Oil & Gas) by Russia – the second largest deal recorded is at a mere 1/5 of the size. 

The largest Private Placement in H1 2020 (May) was valued at $700mm – the issuance of common shared by Celulosa Arauco y Constitución S.A. (Paper Products).

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Deal Trends in Latin America, Issue #12

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