Impact of the Pandemic on Latin American M&A Transactions: Trends, Opportunities and Market Drivers

This is an Insight article, written by a selected partner as part of Latin Lawyer's co-published content. Read more on Insight

The covid-19 pandemic has forced companies to think outside the box and question their original business model. Some trends have become more evident than others, such as the move towards internet-based business models, leaner cost structures or a flexible-cost approach. Other relevant trends, such as digitalisation and technology-driven services, which facilitate retaining or incentivising remote activities (business and financial services), and cybersecurity, have been given special attention in the region. We refer to these trends in this chapter as ‘global trends’. In contrast to some jurisdictions, such as the United States, where merger and acquisition (M&A) transactions have increased, in part to address the need to expedite the migration towards the aforementioned global trends, a very different M&A transaction pattern has emerged in Latin America.[2]

In brief, 2019 was a high point in terms of the number of M&A trans­actions in Latin America. Following the initial effects of the pandemic on transactions in 2020, there has been a further decline in year-on-year figures in 2021. In addition to the aforementioned global trends, the situation has been ripe for opportunists to invest in distressed assets, which has had an interesting upside. Some of the most likely sectors to drive these opportunities are energy, consumer, transportation, industrial and leisure. Buyers are targeting highly leveraged assets in which the operating fundamentals appear solid, assets in which at-risk creditors might be looking to exit the sector or country, non-core assets subject to potential carve-outs with a profitable profile, and certain non-performing loans; all with the potential for discounted or otherwise attractive entry prices.

Even though Latin American companies have had the same incentives to pursue the global trends or local opportunities, countries within the region faced a number of additional challenges, ranging from local government policies concerning economic rescue or reactivation packages, activities shutting down, vaccination rollouts and pandemic-related public behaviour, to corporations’ capacity to access additional capital to navigate the pandemic or even capitalise on existing business opportunities, to name but a few.

Latin American M&A activity in numbers

Taking the lead in M&A transactions is Brazil (with 52 per cent of closed trans­actions), followed by Mexico (9 per cent), Colombia (7 per cent), Chile (7 per cent), Argentina (6 per cent) and Peru (6 per cent). Even though Chile is significantly ahead of the rest of Latin America with its rollout of covid-19 vaccinations,[3] there has been no evidence of recovery in M&A transactions during 2021. These statistics are based on an average of transactions closed between 2018 and 2021, and the breakdown has remained similar each year. Brazil has historically driven the bulk of transactions and, unlike most other countries in region, has shown a significant level of recovery, when comparing 2020 with 2018.

Table 1. Completed transactions by target country (2018–2021 YTD)

 (as % of total per year)
Total 2018201920202021
Brazil2743613051311,071 4750576752
Mexico58585017183 108999
Colombia31653215143 59687
Chile4959258141 88547
Argentina4843306127 86636
Peru4949146118 87336
Others74908313260 131215713
Total5837255391962,043 100100100100100

Mergermarket as at 28 June 2021

Table 2. Deals’ value for completed transactions by target country (2018–2021 YTD)

(US$ mm)(as % of total per year)
Total 2018201920202021
Brazil20,79052,30117,3786,59997,067 2754343240
Mexico2,3284,8436,9442,51616,631 3514127
Colombia1,6138,1242,6789712,511 28505
Chile10,8708,4964,1663123,562 1498010
Argentina8,6694,2531,65384615,421 114346
Peru4,7763,5335,09257813,978 641036
Others27,24214,45212,6489,96464,306 3615254826
Total76,28796,00150,55820,631243,477 100100100100100

Mergermarket as at 28 June 2021

When comparing the percentage change year to year, Mexico shows the lowest decline in the number of transactions closed from 2019 to 2020, at 14 per cent, followed by Brazil with a decline of 16 per cent. In contrast, other countries in Latin America have seen a decline ranging from 30 per cent to 71 per cent. Furthermore, expectations for 2021 are not looking good when compared with 2020, and even more so in comparison to 2019, with a total average contraction of 27 per cent (which is similar to the 26 per cent contraction from 2019 to 2020). Colombia has the lowest contraction expected for 2021 with 6 per cent based on annualised data, followed by Brazil and Peru, both with 14 per cent.

Table 3. Percentage change in volume of completed transactions by target country (2019–2021)

* Annualised

Mergermarket as at 28 June 2021

If data is considered from a different perspective, for example by ticket size range, statistics show that all ranges were significantly affected by the global pandemic, but without a clear trend. Furthermore, in terms of location of investors, the ratio has changed during the pandemic, from 55 per cent of investors being from the region and 45 per cent from outside Latin America to 60 per cent and 40 per cent, respectively.[4]

Despite the overall picture tending to be negative, are there any upsides or opportunities? Were there opportunities in certain sectors or in specific transaction size tickets? What are the specific drivers in each country that might result in a further decline in the number of transactions being closed? Can we identify specific sectors with opportunities in distressed assets? The following sections aim to answer these questions and provide a broader insight.

Dissecting the top 10 sectors driving M&A transactions

The pandemic was a game changer, affecting revenues and profitability in all sectors as a result of lockdown measures and uncertainty about the timing of a recovery. M&A activity declined sharply as companies focused on tackling business continuity concerns. The Latin American landscape of leading sectors before and during the pandemic has not changed much. The aforementioned global trends (particularly in financial services, computer software, internet and e-commerce, and services) were already in the eye of corporations and institutional investors, as well as other sectors with solid fundamentals, such as energy, medical, consumer (foods), agriculture, transportation and construction. The top 10 sectors comprise 66 per cent of the transactional volume in Latin America.[5]

Table 4. Completed transactions by sector (2018–2021 YTD)

Financial services53866523227
Services (other)41545017162
Computer software30455216143
Consumer: foods293919895
Industrial products and services2722141073
Chemicals and materials302215168
Consumer: retail202812565
Consumer: other192317261
Computer services91517950
Medical: pharmaceuticals91410437
Manufacturing (other)121110336
Telecommunications: carriers13147135

Source: Mergermarket as at 28 June 2021

Table 4a. Completed transactions by sector (2018–2021 YTD)

(as % of total per year)
Financial services91212121122
Services (other)7799839
Computer software56108746
Consumer: foods5544551
Industrial products and services5335469
Chemicals and materials5331373
Consumer: retail3423376
Consumer: other3331382
Computer services2235284
Medical: pharmaceuticals2222290
Manufacturing (other)2222292
Telecommunications: carriers2211294

Source: Mergermarket as at 28 June 2021

Nevertheless, certain sectors were affected considerably more than others during 2020, such as consumer (foods), consumer (retail) and leisure, with a 51 per cent, 57 per cent and 77 per cent drop year-on-year, respectively. The main causes were the effects of social distancing policies, general lockdowns, and a combination of e-commerce growth and lower consumption, owing to the general public being more financially conservative.

Based on the first half of 2021, the prospects for the near future are not clear. Most sectors continue to struggle as compared with 2020, with a few exceptions, such as medical, e-commerce, industrial products, services and leisure. The continuing negativity across sectors may be driven by the vaccination rollout not being as expected (except in Chile), uncertainty regarding recovery in specific sectors, the perception of risk in specific emerging markets versus potential gains and, most recently, the concern about the fallout from the third covid-19 global wave. Despite the fact that the global population has started lifting social distancing and lockdown constraints, there has not been enough time for companies and institutional investors to get back to the M&A market in Latin America.


Energy M&A volume was driven by alternative energy, oil and gas exploration and production, and electrical power generation and transmission transactions. The sector is also leading the region’s activity thanks to the interest of foreign buyers who are attracted by the low interest rates and relatively weaker currencies to achieve attractive returns, coupled with the fact that, during the second half of 2020, several countries, including Mexico, Chile, Colombia and Peru, announced energy or infrastructure plans amounting to billions of US dollars.

The strengthening price of oil continues to drive the entire industry, with downstream assets and offshore drillers being aware of the impact of higher prices while assets are sold or flagged for potential carve-outs.[6]

Energy is a sector in which distress situations may arise. Assets tend to be capital intensive and consistently leveraged through project finance or other types of financial players or vehicles, but are already in operation with a relative long-term viability and certainty. The pandemic has raised concerns in a number of financial institutions and investors across the region. Some common traits identified as concerns include a higher risk profile owing to a high portfolio exposure in financial institutions and institutional investors. In some countries this sector is highly dependent on local government, changes in local policies and solvency. Assets might have been underused and might be at risk of not meeting financial obligations. The combination of these factors present the opportunity for institutional investors with specific profiles to buy capital intensive assets at attractive discounts.

Financial services

Financial services were primarily driven by insurance, banking and business support related transactions, along with fintech solutions. Consolidation in the fintech industry is expected to continue as a result of the extensive migration of customers to digital services during the pandemic and the likelihood that changes in behaviour by the general public are likely to remain after the pandemic.

The level of financial inclusion[7] in the Latin American region is relatively low when compared with other regions. This provides an attractive opportunity for leveraging in digitalisation to extend the financial footprint in emerging markets. For example, in the case of payment processing or loan origination platforms, the region is witnessing a breakthrough in markets that were highly concentrated in traditional banking. Investors continue to allocate funds to companies that have found competitive advantages in a region with high rates of unbanked population and a positive trend in access to web-based services.

It is possible that continuing low interest rates, digitalisation and alternative platforms, and the increasing economic effects of covid-19 may lead to higher M&A activity in 2021.[8]


Medical activity primarily involved health institutions, hospital management and medical equipment deals. Owing to a broadening middle-class demographic, a stronger awareness of healthcare and widespread digitalisation in the region, investors are targeting this sector.


Services deals were driven by the digitalisation footprint as well, with activity focused on education and training, distribution and business support services. Value and supply chain integration, service expansion, creative business models and market consolidation are some of the main sector drivers.

Computer software

Computer software deals[9] included mainly application software products, software development and trading or procurement systems targets. The increasingly digitised world creates many opportunities for software applications that have become omnipresent in businesses. The software industry is attractive mainly for the following reasons: recurring revenues (e.g., annual subscriptions, licensing fees), scaling (i.e., the product is already developed and, therefore, incremental sales do not lead to an increase in costs) and customer stickiness, upselling and cross-selling (churn rates are low owing to high switching costs; once the customer acquires a product it can be expanded by upselling or cross-selling).

Consumer (foods)

M&A activity in this sector[10] was driven by distributors, dairy products and deals in fish, meat and poultry. Performance in the sector has been positive, despite the effects of the covid-19 outbreak, and the trend is expected to continue. This is down to the growth in population and the fact that the sector is ‘shielded’ from the negative effects on overall consumer spending, since it is essential spending. The continuing rise in health awareness is likely to boost sales in the juice, bottled water and super foods sub-segments.

As countries start to show more stability and long-term signs of recovery, distressed opportunities will start to appear. Companies with well-known brands and a well-developed supply chain and infrastructure, which are under tight liquidity and overleveraged, will require capitalisation to even up their balance sheets, improve access to cash and ensure long-term viability. These will be interesting opportunities for liquid investors to acquire a full or partial participation in a commercially strong and operational food company while strengthening its balance sheet.


Agriculture deals[11] were mainly in distribution, crop cultivation, industrial equipment and machinery-related. The sector drivers include innovation, trade, the integration of value chain, diversifying markets and improving society’s well-being. Digitalisation, connectivity and automation in the field, as well as partnerships between the public and private sectors to improve food production and supply, are some considerations for the sector’s growth.

Transportation and logistics

Transportation and logistics deals included mainly freight, shipping and airline targets.[12] As this sector is the backbone of global trade, it is highly dependent on industrial production and macroeconomic trends, and most recently in the growth of e-commerce. Although the sector has suffered during the pandemic, certain subsectors continue to serve the community around the clock, such as coordinated local and regional services and distribution of products and supplies.

As a result of the pandemic, transportation companies that were not primarily working in e-commerce or primary goods distribution saw a downturn in their operations, as did public transport services, which for a certain time stopped operating. In both cases, businesses with solid operating foundations before the pandemic experienced a liquidity constraint and, in some cases, financial distress. This situation presents the opportunity in the mid-size M&A ticket range to enter an essential service industry that will be subject to a short-term to mid-term recovery.


Acquisitions in the construction sector were primarily focused on construction-related services, cement and other heavy side building materials.[13] Although the sector has been affected by lockdown measures imposed by the authorities to limit the spread of covid-19, certain countries have started to reactivate projects. Furthermore, although restrictions may inhibit construction until the pandemic is over, the appeal of real estate assets (specifically industrial assets) endures as they are widely seen as crisis-proof investments.

Internet and e-commerce

Internet and e-commerce were driven by portals, e-retailing and online entertainment.[14] Covid-19 brought about significant growth in the sector across the region and has become one of the fastest-growing markets in the world. Prior to the pandemic, the sector penetration was low across the region owing to substantial unbanked populations, logistics and a lack of trust in online commerce. In the past year, this changed with the virus outbreak as many stores were forced to suspend on-site operations and invest in digitalisation, and customers began to trust and adopt digital platforms.

Other distressed sector opportunities

The industrial and leisure sectors might not be in the top 10 M&A sectors for Latin America in 2020–2021, but distressed opportunities will arise here as well. Industrial assets associated with essential goods and exports will recover faster, driven by local consumption trends and reactivation in other regions, such as North America and Europe. In contrast, the leisure sector will reactivate as day-to-day activities recommence and tourism boosts. The latter is considered as a relevant driver of the economy in some emerging countries, which have seen some activity in 2021. As in the transportation sector, both sectors have shown signs of liquidity shortage and overleveraged balance sheets, presenting opportunities for strategic partnerships and de-leveraging of balance sheets through creditor substitution at attractive discounts. It is important to note, however, that these sectors will still be subject to swings caused by the pandemic during 2021.

Brazil, Latin America’s M&A giant

Macroeconomic indicators
GDP growth (%)1.81.4-4.13.7
Inflation (end of period)
Unemployment rate (%)12.311.913.214.5
Exchange rate (USD)*0.27360.25350.19380.1887
Covid-19 aid (as % of GDP)
(above-the-line measures and liquidity support)
Gross debt (as % of GDP)85.687.798.998.4
* Source: The Economist, Fred Economics Data and countries’ central bank data

International Monetary Fund

Prior to the covid-19 pandemic, Brazil had a promising M&A outlook, [15] given the volume of transactions, cross-border trade agreements and new policies that were expected to attract investors to the region. Brazil, in particular, was an ideal candidate to capture most of the activity as a result of the implementation of structural reforms of labour and pension plans and the announcement of the privatisation of several state-owned companies. Another relevant factor is Brazil’s recent comprehensive amendment to its Reorganization Law, which came into effect in late January 2021 and will affect how restructuring is done, providing further legal certainty and promoting out-of-court restructuring processes. The most relevant changes were adjustments to pre-pack restructuring agreements, cross-border insolvency, free and clear sale of liens, limited debtor-in-possession financing provisions, tax considerations that imply special considerations to non-deductible impairment losses, among others.[16]

Brazil was no exception in implementing social-distancing restrictions and a lockdown, along with government-sponsored subsidies and flexibility in its labour laws. Private banks implemented relief measures, such as covenant waivers and grace periods. The sum of all these and other measures provided financial breathing space for corporates and individuals, but support cannot be provided for much longer. The question is, what will happen to specific sectors and their expectation of recovery when it is withdrawn? At the time of writing, 14 per cent of the Brazilian population has been fully vaccinated, which is far lower than in developed countries. Combining the end of concessions with the vaccination rate, we might expect further consequences in 2021, resulting in a lower rate of M&A transactions.[17, 18]

In 2019, 361 M&A transactions were registered. The year 2020 had a promising start, with 92 transactions registered in Q1 2020 – 35 per cent more than in Q1 2019. The number of transactions fell by 27 per cent for Q1, as compared with the same quarter in 2020. Furthermore, there is still a tendency towards recovery for Q2 and the cumulative number of transactions for 2021. Nevertheless, expectations are uncertain for the second half of 2021.

The number of transactions in Q2 2020 was down by 40 per cent. This trend continued for the remainder of the year, which closed with a contraction of 16 per cent compared with 2019. Despite the pandemic, the number of M&A transactions in Brazil in 2020 was higher than in 2018. However, that trend does not look likely to continue in 2021.

Computer software, financial services and e-commerce are now in the top 10 industries in the country,[19] in terms of the number of transactions. Brazil is therefore no exception in showing a clear preference for the global trends mentioned at the beginning of the chapter. The largest players (apart from technology-related sectors) are medical, services, energy and consumer (foods), all of which have been driven by continuing solid foundations or covid-19-related needs.

The medical and services sectors have both evolved and adapted as needed during the pandemic, directly or indirectly. For example, we have identified a significant number of transactions in Brazil during the pandemic relating to health institution acquisitions, healthcare-related supply chains and hospital management. In the services sector, the bulk of the transactions are education-related, followed by distributors and business support services.

Despite the downturn, high liquidity of local investors coupled with the appetite of foreign private equity funds may have a positive effect on M&A in the country.[20]

Top five countries driving buyers’ interests

As vaccinations have been rolled out in most countries and as covid-19 cases and deaths have significantly decreased, lockdowns and restrictions have eased across Latin America, which has enabled M&A activity to recover globally.

The advantages that some Latin American countries enjoy is the combination of their geographical location, a skilled and cost-competitive workforce, agile delivery, trade agreements and special economic policies, among other things.

Opportunities have been seen in different industries globally. Latin America follows a similar path in terms of global trends and other specific sectors; however, it might not achieve a record high in M&A transactions in 2021 as expected in other regions, or even similar levels to those in 2019. There are important challenges for each country, considering the political turmoil that the pandemic has caused in the region.


Macroeconomic indicators
GDP growth (%)2.2-0.1-8.25.0
Inflation (end of period)
Unemployment rate (%)
Exchange rate (USD)*0.0520.05190.04970.0494

Covid-19 aid (as % of GDP)

(above-the-line measures and liquidity support)

Gross debt (as % of GDP)53.653.360.660.5
* Source: The Economist, Fred Economics Data and countries’ central bank data

International Monetary Fund

Mexico is expected to be one of the top beneficiaries of the Biden administration’s new policies, given its proximity to the United States and the United States-Mexico-Canada Trade Agreement (USMCA, formerly NAFTA), potential new investment opportunities include the relocation of supply chains, and other opportunities in sectors as manufacturing and infrastructure.[21]

New labour and tax regulations to prohibit outsourcing and insourcing, and allowing only the provisions of specialist services in Mexico, may also give rise to mergers, spin-offs and corporate reorganisations, considering the vast number of companies that may need to undergo corporate restructuring to comply with the most recently announced regulations.

Antitrust is still a relevant factor as the Mexican Antitrust Commission continues to follow closely investigations into the telecommunications, real estate and banking industries while pushing forward on its initiatives on transparency, public bids, and better and unified regulations.

A combination of factors affect Mexico. Proximity to the United States, the USMCA and, according to Banco de Mexico data, record high money remittances from Mexican immigrants in the United States back to Mexico could drive the country’s recovery, along with large domestic conglomerates driving economic activity, which are still being badly affected by the pandemic (260 of the top 500 companies in the country have reported a reduction in sales for 2020).[22] On the other hand, there has been relatively low government expenditure on reactivating economic activities (in line with the austerity policy announced and endorsed by the government), no significant covid-19 economic aid packages are available, inflation is likely to increase and recent policies point out that there is no significant interest in sponsoring alternative sources of energy. Consequently, there is a marginal projected growth for the coming years.

Mexico is the second largest economy in the Latin American region, therefore M&A activity is expected to maintain and eventually recover to pre-pandemic levels, considering the external drivers stated and market consumption. Furthermore, access to traditional financing and structured finance should boost the M&A market significantly, as well as opportunities to invest in distressed assets in the energy, consumer, industrial and leisure sectors. Other sectors expected to have relevant M&A activity in Mexico are agriculture, transportation and logistics, which are the backbone of the primary sector of the country and leveraged by proximity to the United States.[23]


Macroeconomic indicators
GDP growth (%)2.63.3-6.85.1
Inflation (end of period)
Unemployment rate (%)9.710.516.112.8
Exchange rate (USD)*0.00030.00030.00030.0003
Covid-19 aid (as % of GDP)
(above-the-line measures and liquidity support)
Gross debt (as % of GDP)53.652.462.864.2
Source: The Economist, Fred Economics Data and countries’ central bank data

International Monetary Fund

Industries such as technology, infrastructure and healthcare are expected to dominate M&A activity in Colombia. Deregulation at the end of 2019, legal reforms on financing, and the increased popularity of telemedicine during the pandemic have boosted perception of the healthcare sector as one of the industries with the greatest potential for M&A. Activity in infrastructure should be boosted by the ongoing divestment of government-owned assets. The changes in consumer habits have enabled the rapid expansion of sectors such as pharmaceuticals, logistics and e-commerce, which also have potential for good opportunies.[24, 25], [26]

Interest moving forward appears to be in innovative start-ups and technology competitors willing to improve their digital channels to get closer to their customers.


Macroeconomic indicators
GDP growth (%)3.71.0-5.86.2
Inflation (end of period)
Unemployment rate (%)
Exchange rate (USD)*0.00160.00140.00130.0014

Covid-19 aid (as % of GDP)

(above-the-line measures and liquidity support)

Gross debt (as % of GDP)25.628.232.533.6
* Source: The Economist, Fred Economics Data and countries’ central bank data

International Monetary Fund

Chile had fewer covid-related distressed assets than the rest of the region. One possible reason for the lower M&A activity is that it is driven by the political landscape rather than the pandemic. M&A activity will continue to grow,[27] benefiting mostly the sectors that have proved to be more resilient, such as healthcare and technology-related matters. The energy, infrastructure, mining and agriculture sectors are expected to drive part of the M&A activity as well. However, hospitality and transportation are expected to take longer to recover.

In line with Chile’s carbon neutrality strategy towards 2040, solar deals and natural resources transactions are also expected to be an important M&A trend. The current economic-political situation is seen as favourable for deal-making.

In terms of buyers, Chinese and US companies continue to be the primary investors in Chilean targets in terms of transaction volume and value.


Macroeconomic indicators
GDP growth (%)-2.6-2.1-10.05.8
Inflation (end of period)47.653.836.1
Unemployment rate (%)9.29.811.410.6
Exchange rate (USD)*0.03560.02080.01200.0091

Covid-19 aid (as % of GDP)

(above-the-line measures and liquidity support)

Gross debt (as % of GDP)86.490.2103.0
* Source: The Economist, Fred Economics Data and countries’ central bank data

International Monetary Fund

M&A transactions in Argentina[28] are expected to remain low, based on the uncertain political and macroeconomic outlook. Low economic activity with negative growth since 2018, combined with high inflation and the negative effects of the pandemic, have made it difficult to restore confidence within the investment and business community. The potential default to the International Monetary Fund and Paris Club, and the consequent high country risk premium, high inflation and market volatility, have made it difficult for buyers to obtain financing from typical sources. As a result, Argentine transactions have attracted debt providers and funds that typically have a higher risk profile.[29]

There is also a more optimistic view with some variables that could have a positive effect on M&A transactions in the medium term, such as the size of the Argentine economy, belief that distressed assets, declining valuation, divestitures and the long-term view of strategic investors could create opportunities that lead to recovery in the M&A market, the recent restructuring of the sovereign and sub-sovereign debt, and the competitive advantages in certain key areas (agriculture, technology, pharmaceuticals and energy) may increase the number of deals.


Macroeconomic indicators
GDP growth (%)4.02.2-11.18.5
Inflation (end of period)
Unemployment rate (%)6.76.613.69.7
Exchange rate (USD)*0.30430.299616.700.2667

Covid-19 aid (as % of GDP)

(above-the-line measures and liquidity support)

Gross debt (as % of GDP)
* Source: The Economist, Fred Economics Data and countries’ central bank data

International Monetary Fund

M&A activity in Peru is expected to be focused on complementary acquisitions to close technology gaps, secure supply chains and increase market share.[30, 31]

The International Monetary Fund forecasts GDP growth of 8.5 per cent for the country in 2021, being the fastest economy to recover in the region. However, new antirust legislation in Peru could have a negative effect on the M&A market by extending the closing on transaction processes. The political situation has generated uncertainty in the local market, particularly affecting large trans­actions in sectors such as mining and infrastructure, and could further affect growth expectations and M&A activity for the country.

The Peruvian M&A market has been attracting the interest of foreign investors as it continues to become more sophisticated. As in most countries, the technology, infrastructure, logistics and medical sectors are expected to drive a post-pandemic boom, thus increasing M&A activity.

What next?

Post-pandemic M&A activity in Latin America[32] is expected to recover at a different pace depending on geography, sectors and local policy. The timing for a full recovery still looks uncertain. Economies are starting to open as vaccination efforts continue across the region although there are additional concerns with the appearance of new variants of the covid-19 virus. There are few expectations of economies recovering to pre-pandemic levels in 2021. Although statistics show 2022 to be a more realistic target, in some sectors recovery will take even longer.

Industries such as medical, technology and consumer goods are likely to concentrate investments and stand out as attracting the highest share of the deals, in part boosted by the digitalisation wave. The consolidation of some industries, such as traditional media and consumer goods, is expected to continue, driving competitiveness, while in others, such as banking and telecommunications, the main factor has been regulatory matters.

Non-traditional deals associated with innovation, sustainability, cross-sector alliances and securing supply chains will gain momentum. The competitive landscape is changing and digitalisation is redefining industries. Corporate teams will probably need to reassess their M&A strategy to identify where to buy or build desired capabilities for the future.

As a consequence of the pandemic, the energy (including infrastructure), consumer goods, transportation and logistics, industrial and leisure sectors are expected to see an increase in restructurings and distressed M&A transactions. Companies are likely to pursue divestitures in non-core assets to reinvest in strategic capabilities or to strengthen their balance sheets.

It is important to understand the financing dynamics and accessibility in each location. A significant percentage of the largest M&A deals in Latin America are typically financed with debt or bridge loans. Other financial vehicles available to help gain access to capital are special-purpose acquisition companies, which appear recently to be a popular alternative to an initial public offering. However, most Latin American countries lack specific regulation of either of these vehicles.

The recovery ahead is likely to be steered through an environment of low interest rates, attention on increasing inflation and political activity in different countries. M&A still appears to have a challenging road ahead, but we might expect a better path to recovery in 2022, as further progress is made with the vaccination rollout and there is more certainty in the recovery curves of each sector. At the same time, companies and institutional investors are reassessing their strategies around acquisition of new capabilities and looking for transformative projects or opportunistic deals.


[1] Jorge Luis Moreno Félix is a managing director, José Ignacio El-Mir Arnedo, Yazmín Cáceres Lucero and Mario Alberto Rocha García are partners at PwC México.

[2] ‘Global M&A Industry Trends: 2021 Mid-year Update’, PricewaterhouseCoopers, July 2021,

[3] Chile leads the vaccination rollout in Latin America, with more than 58 per cent of its population fully vaccinated. In Mexico, Colombia and Brazil, this is much lower, at 16 per cent, 15 per cent and 13 per cent, respectively, and significantly behind the United States (47 per cent) and Europe (30 per cent). The global average of people who are fully vaccinated is 12 per cent. In Argentina and Peru, the figures are 11 per cent and 10 per cent, respectively. Official data collected by Our World in Data, as at 7 July 2021: see

[4] Mergermarket as at 28 June 2021.

[5] ‘Latin America M&A – the Year Ahead: Activity and Trends’, Jones Day (March 2021),; see also ‘A buyer’s guide to M&A in Latin America’, Baker McKenzie, 2018,

[6] ‘Global M&A Industry Trends’ (see footnote 2, above).

[7] Individuals who make use of the banking system.

[8] id.

[9] ‘Decoding the Competitive Software M&A Market’, Boston Consulting Group, March 2021,

[10] ‘Mexico Food and Beverage Sector Report 2020/2021’, EMIS, November 2020,

[11] ‘Agribusiness Sector in Latin America Supports the Establishment of Partnerships and the Creation of a New Vision for Development Post Covid-19’, Inter-American Institute for Cooperation on Agriculture, July 2020,

[12] ‘M&A in the Transport & Logistics Industry’, PricewaterhouseCoopers, December 2019,

[13] ‘Covid-19 and Latin American real estate: what are the silver linings?’, Oxford Business Group, July 2020,

[14] ‘How Covid-19 triggered a Latin American e-commerce boom’, Oxford Business Group, March 2021,

[15] ‘Future of the deal. Winds of change for M&A deals in Latin America’, Deloitte, February 2020,

[16] Joana Bontempo, ‘Brazilian Reorganization Law Reform Explained’, REDD Intelligence Latin America LLC, 7 January 2021.

[17] ‘Global Restructuring Trends’, PricewaterhouseCoopers, September 2020,

[18] ‘Coronavirus (COVID-19) Vaccinations’, Our World in Data,

[19] Mergermarket as at 28 June 2021.

[20] ‘Latin America to see surge in M&A activity as region rebounds from COVID-19’, Mergermarket, 12 January 2021,

[21] ‘Corporate M&A 2021 Mexico’, Chambers and Partners, April 2021,

[22] ‘500 Empresas más Importantes de México’, Expansión, 1 June 2021.

[23] ‘Latin America to see surge in M&A activity as region rebounds from COVID-19’ (see footnote 20, above).

[24] ‘Corporate M&A 2021, Colombia’, Chambers and Partners, April 2021,

[25] ‘Mergers & Acquisitions in Colombia’, PricewaterhouseCoopers, 2019,

[26] ‘Latin America to see surge in M&A activity as region rebounds from COVID-19’ (see footnote 20, above).

[27] ‘Corporate M&A 2021 Chile’, Chambers and Partners, April 2021,

[28] ‘Argentina’ in The Mergers & Acquisitions Review (The Law Reviews, January 2021),

[30] ‘TTR DealMaker Q&A with UNE Asesores Financieros Founding Partner and CEO Ian Fry Cisneros’, TTR – Dealmaker Q&A, July 2021,

[31] ‘Corporate M&A 2021 Peru’, Chambers and Partners, April 2021,

[32] ‘The future of M&A and post-pandemic business priorities’, McKinsey & Company, 28 April 2021,

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