M&A Watch: Mexico sees weak Q1 activity

M&A activity in Mexico saw a weak start to 2019 by producing 61 transactions in the first three months of the year, down from 98 in 1Q18 (-37.8%), according to M&A research firm Transactional Track Record (TTR).

A total of 27 operations reported deal value amounting to US$3.54bn, dropping 27.8% from the same quarter a year before

The first quarter did see some major transactions, including some big pickups for Mexico's América Móvil such as the US$905mn acquisition of Nextel Brasil from NII Holdings and AI Brazil Holdings, and the purchase of Telefónica Guatemala for US$333mn and Telefónica El Salvador for US$315mn.

Another big move in the quarter was the ContourGlobal purchase of Alpek's Mexican energy operations in Cosoleacaque and Altamira for US$801mn.

TTR said that internet-related deals was the most active sector from January to March with a total of 13 transactions, followed by "other tech" with nine deals and then a combined eight deals in the financial and insurance sectors.

Cross-border activity

Outbound deals from Mexico largely targeted the US and Spain in the beginning of the year, with both territories targeted for three deals each in the first quarter. However, the largest outbound deal of the period was the Nextel Brasil acquisition, said TTR.

US firms demonstrated the strongest interest in Mexican properties from January to March, carrying out six inbound operations in the period.

Private Equity, Venture Capital

There were only two private equity transactions with a combined value of US$28mn in 1Q19, said TTR. This represents a 83.3% decrease in the number of transactions from 1Q18, but a 277% increase in mobilized capital.

There were 14 venture capital operations valued at US$97mn, which represents a decrease of 36.4% in the number of operations and a drop of 45.0% in mobilized capital with respect to 1Q18.