Experts expect M&A market to recover in 2023
2022.12.27 08:05
Experts expect M&A market to recover in 2023
Budrigannews.com – Bankers anticipate a sluggish recovery in Latin American deals next year, led by mergers and acquisitions, and IPOs may take longer to resume due to high global interest rates.
According to data provided by Refinitiv, the value of M&A transactions in Latin America decreased by 35% this year to $86 billion.
According to Roderick Greenlees, global investment banking head at Itau Unibanco Holding SA, the total value of mergers and acquisitions was within historical range in prior years, despite being lower than the record year of 2021.
As Latin America becomes more important to emerging markets, bankers predict that M&A volumes will increase by up to 20% in the region next year. Concerned about the impact of erratic COVID policies, tensions with Washington, and the opaque finances of Chinese firms, many investors in emerging markets have already withdrawn from Russia and are now reducing their exposure to China.
According to Latam M&A co-head at Citigroup (NYSE:), Latin America has a great chance to increase its share of emerging markets. Roca, Nicolas.
“The unpredictability connected with races in the locale will in general be brief and won’t influence this pattern,” he said, refering to the case of market improvement in Chile a year after the appointment of radical Gabriel Boric.
According to Roca, investors are also looking forward to proposals for economic policy from Brazil’s President-elect Luiz Inacio Lula da Silva. Lula da Silva is the second leftist elected in the region after Gustavo Petro of Colombia. Fernando Haddad, a party supporter, will serve as Lula’s finance minister when he takes office on January 1.
Healthcare deals were among the largest in the region for the second year in a row.
The industry’s activity was brought to light by hospital chain Rede D’Or Sao Luiz SA’s stock deal acquisition of Brazilian insurer Sul America SA for $3.1 billion. Aliansce Sonae made an unannounced offer to acquire mall operator BR Malls for $2.1 billion, which was unusual for Brazil at the time.
Daniel Bassan, CEO of UBS BB, stated that energy should continue to be a very active industry, particularly in relation to transmission assets and renewable energy.
Morgan Stanley’s (NYSE:) Brazilian head of investment banking, Fabio Medeiros, also sees the possibility of a merger among smaller oil companies that have grown in recent years and acquired assets from Petrobras, a state-owned oil company. It is anticipated that Lula will halt the sale of state assets.
According to Bassan of UBS BB, retail deals have been steadily growing over the past few months because of high interest rates and credit defaults.
According to sources, the return of initial public offerings in 2023 appears to be more challenging.
Share contributions fell 61% in Latin America this year to $13.4 billion, as per Refinitiv information through December 26. As benchmark interest rates reached 13.75%, Brazilian investors have been investing in fixed income assets with a lot of money.
According to Teodora Barone, executive director of UBS BB, Latin America is now back on the radar of international investors after they retreated from other large markets, despite the fact that rates are also rising in other developed markets.
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The listing of energy assets owned by China’s Three Gorges in Brazil ought to be the first IPO of the year.
If the Lula government maintains recent laws that regulate the industry and permit a greater volume of private investment, sanitation companies may resume their plans to list.
M&A League Table 2022- Latin America
Financial advisor Volume (US$ million) Number of deals
Itau Unibanco 15,372 42
Banco BTG Pactual 13,911 71
Rothschild & Co 13,882 24
Banco Bradesco SA 13,146 58
Citi 10,605 14
Morgan Stanley 8,857 13
Lazard (NYSE:) 7,404 17
JPMorgan (NYSE:) 6,184 15
Santander (BME:) CIB 5,996 35
Scotiabank 5,694 9
Total 88,026 1,354
