Chile dealmaking soars in January-October

Dealmaking accelerated apace in Chile in January-October, with the US, Brazil, Spain and Canada the most active inbound acquisition players by value.

Chile saw 117 inbound acquisitions for US$10.6bn over the period, with No. 1 market player the US accounting for 52 and US$4.70bn, respectively.

Internet, financial services and technology were the most active subsectors in the crossborder space, research firm Transactional Track Record (TTR) said in a report, which BNamericas was given exclusive media access to.

Overall, Chile saw 277 transactions in January-October, up 46.6% year-on-year, with aggregate value reaching US$15.7bn, up 389%. Value was disclosed for 157 deals. 

October’s biggest transaction was the US$1.55bn acquisition of Sumitomo’s 45% stake in Chilean copper-molybdenum miner Sierra Gorda by BHP spin-off South32 Minerals. 

January-October M&A transactions accounted for 140 and US$11.8bn, venture capital 96 and US$1.76bn, asset acquisitions 30 and US$1.53bn and private equity 11 and US$600mn, TTR said.

Venture capital was a driver behind the headline dealmaking growth figures, reflecting appetite for business expansion opportunities. These deals grew 60% by number and 1,045% by value. 

Among key tech transactions was a US$50mn capital raise by Chilean human resources software startup Buk, with the financing round led by US fund Greenoaks and Japanese telecom and internet group SoftBank. Following the deal, the company’s valuation reached US$417mn, making it the No. 3 startup in the country by value after food company NotCo and online grocery provider Cornershop, Chilean financial advisors Hudson Bankers said in a report.

ANDEAN REGION

In the report, focused on the Andean nations of Chile, Peru and Colombia, Hudson Bankers said that “in terms of raising capital, the technology sector has dominated.”

On the overall outlook for the Andean region, the report said that dealmaking appetite among local investors has lagged that of developed nations. 

“Although the Andean region has lit some recovery lights and increased the number of transactions, it’s not seeing the same euphoria as developed countries, mainly because local investors have no appetite on the purchase said. 

“As a result, international corporations, motivated by M&A transactions, have taken advantage of the Andean region, particularly in Chile, to make new investments or consolidate their positions.”

Local political uncertainty has ticked up in Peru and Chile. The former recently elected a presidential candidate who campaigned on a far-left platform, while a big question mark hangs over Chile’s election on November 21, where, according to recent polls, a leftist or a conservative will likely become the next president, potentially ending decades of center-left and center-right administrations.

LATIN AMERICA

In Latin America, the overall number of deals grew 39.5% to 2,817 as total aggregate value rose 130% to US$126bn, TTR said. Value was disclosed for 1,374 deals.

Latin American venture capital dealmaking also saw an increase, but at a slower pace. The number of deals rose 48% to 835 as total aggregate value climbed 227% to US$15.2bn.

As in Chile, the technology, internet and financial services sectors were the main dealmaking growth drivers.