Latin America M&A at new lows

One deal boosted PE and VC value significantly

The volume and value of mergers and acquisitions (M&A) targeting companies in South and Central America totalled 156 deals worth an aggregate USD 12,029 million in the third quarter of 2018, according to information collected by Bureau van Dijk, a Moody’s Analytics company, and the leading publisher of company information. Volume fell to the lowest recorded since Q2 2016 (135 deals) while value declined for the third consecutive quarter to the lowest since Q1 2017 (USD 9,732 million).

Bureau van Dijk’s research shows that Latin America’s two largest M&A deals surpassed USD 1,000 million. Linde and Praxair are offloading a slew of operations in the Americas to get their game-changing merger past antitrust road blocks. A consortium comprising Messer Group and CVC Partners, via newco MG Industries, is snapping up almost all of the German giant’s gas businesses in North America and certain of its, and Praxair’s, Latin American assets for USD 3,300 million. Stellar Participacoes, a wholly-owned subsidiary of Digital Realty Trust, has entered into an agreement to acquire Brazilian online cloud-based data hosting services provider Ascenty Data Centers e Telecommunicacoes from Great Hill Partners for USD 1,800 million.

Bureau van Dijk’s data shows that private equity and venture capital (PE and VC) investment in the region totalled 24 deals with a known aggregate value of USD 3,864 million, compared with 69 deals worth USD 1,094 million in Q2 2018. PE and VC deal value trebled over the three months due to the aforementioned buyout of Linde’s gas business in the region and North America.

Lisa Wright, director at Bureau van Dijk, commented, “It is disheartening to see M&A dealmaking continuing to slide in Q3, though investors have not turned their back on the region, after all, there were two USD 1,000+ million acquisitions. It is also worth noting that the USD 52,217 million-worth of dealmaking recorded across the opening nine months of 2018 represents an improvement on the same periods of 2016 and 2017, when values of USD 39,692 million and USD 47,147 million, respectively, were recorded.”