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LatAm M&A activity up 70% in Q1 despite economic struggles


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LatAm M&A activity up 70% in Q1 despite economic struggles

Merger and acquisition activity in Latin American saw substantialgrowth in the first quarter, spiking 70% compared to the same period a year agodespite economic hardships in most of the region, El Economista reported, citing a study by Baker & McKenzie and MergerMarket.

While inflation, currency devaluations and political instabilityare common themes among Latin America, the study found investors still see the regionas having high growth potential. In the first quarter, 59 deals involving $17.2billion were recorded in the period, with eight of them originating from Colombia,the report said.

The trend is expected to continue in the future, the newspapercited Raul Avila, a professor at Colombia's Universidad Nacional, as saying. "Despitecurrent regional stagnation, projections from the IMF or World Bank show accelerationrates for Latin American growth next year," Avila said. 

A budding middle class in Latin America is also thought to bea factor that supports M&A feasibility. The study pointed out that countrieslike Colombia and Chile are attractive for foreign investment and cross-border transactionsas the size of their middle class is generating business in sectors such as technology,pharmaceuticals, finance and real estate.