Latin America – The only way is up

The Latin American (LatAm) M&A market in 2024 experienced its third straight year of both transaction value and volume decreasing (by over 15%) compared to the prior year – setting a low bar for 2025, which we are hopeful will be beaten.

In terms of cross-border activity, the inbound segment experienced a decline (in both deal volume and value) and the outbound segment saw a year on year increase in value but fewer deals overall. The US emerged as the leader in inbound M&A into LatAm, constituting 30% of deal value and a third of volume. The US was followed by France, China, and Switzerland as the leading acquirers by value, with Canada, Spain, and the UK also significantly contributing to the total deal volume. Brazil accounted for around 45% of inbound activity, followed by Mexico with over 15%. Brazil and Mexico were also the most active on M&A activity outside the LatAm region, with Brazil representing close to 60% of outbound deal value. In terms of volume, the US and Spain were the most targeted nations, whereas the largest deal values were directed towards the Netherlands, the Dominican Republic, Spain and the US.

Key countries – Brazil, Chile and Mexico

Brazil has consistently occupied the market's leading position, representing 35-55% of the region’s deals over the years. Retaining its market dominance in 2024, Brazil accounted for over 60% of the deal value and more than 55% of deal volume in the region. Brazil’s continued attraction for investors is linked mainly to its huge market, its natural resources and experienced labour force in some sectors. By both deal value and volume, Mexico and Chile follow Brazil in the second and third positions respectively. All in all, it is expected that Brazil, Mexico, and Chile will continue to dominate investments in 2025, with Argentina and Colombia possibly maintaining a growth trajectory.

Key sectors – Energy, technology and financials

In 2024, LatAm M&A activity was predominantly concentrated in sectors like energy, industrials and financials in terms of deal value. However, in terms of deal volume, the highest number of transactions were within the consumer, tech and energy sectors. The discourse around energy transition continued to be relevant and drew international investments to LatAm. Countries including Brazil, Chile, and Mexico – with vast natural resources – stand out as emerging hubs for renewable energy. Simultaneously, the rise of e-commerce and fintech – compounded with the onslaught of artificial intelligence – has catalysed an uptake in M&A deals within the digital economy.  As such, operations linked to technology, especially data centres, gained traction in 2024, further solidifying projections of continued investor focus in upcoming years.

Outlook for 2025

Despite the challenges that emerged in 2024, the indicators point towards a promising outlook for M&A activity in LatAm for 2025. There is hope that overvalued investments will start correcting, allowing more deals to enter the pipeline. Inflation stabilisation, global shifts towards sustainability and digitalisation create a conducive environment for M&A activity. Brazil, Chile and Mexico are predicted to remain regional leaders, with sectors like technology, energy, financial services and manufacturing likely to be key growth drivers. 

Despite an overall positive outlook, some predict the 2025 M&A forecast for Brazil could be stifled due to higher inflation, increased debt servicing costs, and slower growth. Given Brazil’s outsized role in the region’s M&A activity, if this proves true, this will also dampen the broader LatAm M&A ecosystem. Mexico faces similar challenges with inbound M&A threatened due to potentially increased tariffs and ongoing regulatory changes under President Claudia Sheinbaum’s administration. Despite political and economic risks, investors capable of identifying strategic opportunities stand to capitalise significantly on the transformative and untapped potential of the vibrant region.