Mexico M&A activity slips in July

Mexican M&A activity slipped again in July, despite holding onto improvement in the annual comparison of year-to-date activity, driven in part by strong interest from US firms to lock down deals in Mexico.

Research firm Transactional Track Record (TTR) recorded a total of 22 operations last month, 11 of which disclosed deal value totaling US$660mn. This represents a 21.4% drop in the number of operations and 41.5% decrease in disclosed deal value from July 2017.

In the first seven months, however, there were 192 transactions with 88 reporting deal value totaling US$7.75bn, a 15.7% y-o-y increase in number of deals and 2.07% increase in deal value.

Of the 88 transactions with disclosed deal values in the year, 66 were small-market operations (valued under US$100mn), 14 mid-market (US$100mn-US$500mn) and 3 high-market (+US$500mn).

Interest was strongest in the finance and insurance sector and in the real estate sector, both of which produced 34 operations from January to July, followed by distribution/retail and internet with 16 deals each.

Strong US interest

From January to July there were 30 US-based firms purchasing Mexican companies, a 57.9% increase from the same period of 2017. Disclosed deal value on inbound transactions from the US reached US$1.65bn in the period.

There were also 25 foreign private equity and venture capital funds investing in Mexican companies, a 66.7% increase y-o-y.

Outbound deals from Mexico were similarly focused on US properties, producing 10 deals in the first seven months of the year, followed by Argentina (with 6 outbound deals) and Spain (with 5). Spain, however, saw the largest total of disclosed values in outbound deals from Mexico with US$868mn.

While the largest inbound interest in the period came from the US, there were 9 inbound transactions through July from Spain and 4 from both France and Chile.