Zephyr Latin America, Q3 2017

  • Latin America M&A value in Q3 at highest since Q3 2015
  • Brazilian M&A propped up Latin American M&A; PE and VC investment slips in Q3

The value of mergers and acquisitions (M&A) targeting companies in South and Central America advanced for the second consecutive quarter in Q3 2017, according to information collected by the leading M&A database Zephyr. In all there were 174 deals worth a combined USD 23,810 million announced during the three month period. By volume, this represents a decline on the 200 deals announced in Q2 2017, while value rose to the highest recorded since Q3 2015 (USD 33,790 million). When compared with Q3 2016, volume was up 7 per cent from 163 deals while value advanced from USD 19,696 million.

Zephyr shows that there were seven M&A deals each worth more than USD 1,000 million in Q3 and, of these, five targeted Brazilian companies. The largest by value was the acquisition of Brazilian pulp manufacturer Eldorado Brasil Celulose by CA Investment (Brazil) for USD 7,306 million. A capital increase worth USD 2,535 million capital by telecommunications and internet services provider Oi was the second-biggest deal of the quarter.

Zephyr shows that Brazil was the most frequently targeted country in Latin America in Q3, having been targeted in 79 deals worth USD 15,929 million, which represented 45 per cent of the region’s volume (174) and 67 per cent of total value (USD 23,810 million). While overall value for M&A in Latin America improved over the quarter, growth was stripped away from Paraguay (Q2: USD 300 million; Q3 USD 0 million), Trinidad and Tobago (Q2: USD 38 million; Q3 USD 0 million) and Ecuador (Q2: USD 119 million; Q3 USD 0 million), among others.

Lisa Wright, Zephyr director, commented, “It is encouraging to see the M&A market in Latin America has accelerated in value the last couple of quarters, despite a series of declines in the second half of 2016 and the first quarter of 2017. Momentum was driven by several high value deals in Brazil.”

The Zephyr database shows that private equity and venture capital (PE and VC) investment in companies in Latin America fell to 41 deals worth a combined USD 1,694 million from 51 deals valued at USD 2,151 million in Q2. There was only one PE and VC deal worth more than USD 1,000 million in Q3 and it accounted for almost two-thirds of the region’s total PE and VC value. It involved Dow AgroSciences selling its Brazilian corn hybrid seed business to Citic Agri Fund for USD 1,100 million.

Zephyr reports on Latin America M&A activity in Q3 2017 – access report