Latin America emerging as a hotspot for mergers & acquisitions by 2025, KPMG reports

Latin America has become an increasingly attractive region for mergers and acquisitions (M&A), despite global economic uncertainty, reveals a study by consulting firm KPMG.

Once considered risky due to political, social, and economic complexities, the region now offers unprecedented investment opportunities.

According to the KPMG 2023 M&A in Latam Survey, the most attractive Latin American nations for M&A in the coming two years include Mexico (79% of companies and investors find it ideal for business), Brazil (69%), Costa Rica (54%), Chile (53%), Colombia (51%), Peru and Uruguay (both 47%), Argentina (44%), and Panama (43%).

Mexico has overtaken Brazil as the top choice, marking a significant trend shift.

The survey covered 400 executives involved in M&A transactions in Latin America worth over US$50 million in the past five years.

Despite the growth prospects, 35% of investors view the outlook as increasingly risky.

However, four out of five respondents reported their recent M&A transactions in Latin America as successful, indicating potential rewards outweigh the risks.

The main challenges identified were the due diligence and negotiation processes due to difficulties obtaining reliable financial information.

The report highlights the opportunity to enter new markets, sector-specific growth, overall economic growth, risk diversification, and labor force quality as the key reasons for investing in the region.

The technology sector is expected to see the most M&A activity in the next two years, followed by financial services, energy, agriculture, and manufacturing.

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