M&A OUTLOOK 2024

Rodolfo Papa,  February 15, 2024

Latin Counsel´s editor, Rodolfo G. Papa is pleased to present this "M&A Outlook 2024" Report, which includes -in its content- the answers to 3 "macro" questions (cited below), that have been generously answered by 10 corporate lawyers, who, without a doubt, can be qualified as "key players" in the negotiation and structuring of Mergers & Acquisitions of companies, recognized as such, not only in their respective jurisdictions of practice, but also, at a continental level, focused on sharing a vision of its development prospects for this year 2024.

In this sense, we are very grateful to its authors: Vivian Liberman (BLP, Costa Rica), Paola Lozano (Skadden, Arps, Slate, Meagher & Flom, New York), Estanislao Olmos (Bruchou & Funes de Rioja, Argentina), Paula Vieira de Oliveira (Mattos Filho, Brasil), Claudia Barrero (Philippi, Prietocarrizosa, Ferrero DU & Uría, Colombia), Pablo Iacobelli and Jaime Coutts (Carey, Chile), Iván Delgado (Pérez-Llorca, España), Manuel Galicia (Galicia Abogados, México), Alberto Rebaza (Rebaza, Alcazar & de las Casas, Perú), and Fulvio Italiani (D´Empaire, Venezuela), for their contribution.

We herein summarize the questions answered by such authors, as follows:

1. What are the M&A predictions for 2024?

2. Which sectors are the most active in M&A today?

3. What are the trends in due diligence, and are clients demanding the use of AI tools to perform due diligence processes?

It is evident that the M&A transactions market in Latin America continues to be dynamic, challenging and highly sophisticated, not only due to the economic and political "ups and downs" that have been evidenced (in several of its countries) in recent years, but also due to the emergence of new issues that "local lawyers" should carefully evaluate (and manage) in order to provide adequate standards of legal certainty and predictability.

In the first place, it should be pointed out, especially from the perspective of foreign investors who decide to "sink" a foreign direct investment (and, of course, a long-term one) in one of the leading sectors of the economy of a Latin American jurisdiction, the need to have access to adequate protection mechanisms, This would make it possible for them to benefit from coverage against potential risks that they have historically faced when entering our region, such as that of a (possible) sovereign decision decreeing the "expropriation" of such an investment, without granting fair and equitable "compensation" to compensate for such dispossession, in accordance with the guiding principles that govern this matter in the sphere of international law. 

It should be borne in mind that this type of acts detrimental to private property could be externalised (by a State receiving such foreign investment), either "directly" (with an impact on the title to shares or assets with which the investor was legitimately vested), or indirectly, through a breach of certain guarantees conferred, for example, in the event of a possible "loss of value" of such investment, which the investor would have suffered as a result of the commitments undertaken.

In this regard, and as one of the main legal instruments designed internationally to protect the position of foreign investors who decide to invest in companies or assets with situs in Latin America, we highlight the so-called "Treaties for reciprocal promotion and protection of investments", signed by the National States, The provisions of these treaties provide adequate and effective protection mechanisms to protect these investors against the risk of "expropriation", enabling them to have recourse to a neutral international arbitration body, competent to settle potential disputes that may arise between the host state and the foreign investor making the claim.

Therefore, it would be necessary that among the "macro" issues that should be included as part of the due diligence work to be carried out by the international investor that decides to enter into an M&A operation with an impact on a Latin American country, would be to evaluate (but fundamentally choose) the law of incorporation of the vehicle under which said foreign direct investment would be instrumented.

On the other hand, we cannot fail to note the existence of new litigation scenarios that could arise in the execution of certain "contractual blocks" of the SPA, which, although our corporate practice at the regional level has adopted its content structure from the traditional Anglo-Saxon format, their interpretation should be regulated under the rule of the "local law" that is (totally or partially) applicable to them.

In this respect, one issue that has become more topical, especially since the beginning of the pandemic, has been how to distribute and allocate risks between the contracting parties during the period of time that elapses between the signing of the SPA and the closing of the transaction, under the protection of the "material adverse change" clause, known in common law practice as "MAC" ("material adverse change").

It is certain that, following the disruptive impact caused - on a global level - by this pandemic, the parties to an M&A transaction involving Latin American shares or assets, have proceeded to re-examine (as part of the negotiations) the scope and content of the aforementioned clause, in view of the possible irruption of other disruptive events (comparable, in essence, to that of a "pandemic"), which, during the course of this period, could eventually lead to an abandonment (or "walk away") on the part of the buyer, or else to a "good faith" renegotiation of its essential terms.

Another issue that could be qualified as significant, especially from the position of litigation lawyers, in the face of conflicts caused by a breach of the seller’s "Representations & Warranties", whose tendency, currently followed in Latin America, is to resort to a commercial arbitration instance (whether local or international, as the case may be), for its solution, would be that of its framing, Either under traditional standards, such as that of a "breach of contract", which would require - for the purposes of its configuration - as presuppositions, to meet the attributive elements of civil liability (subjective factor, unlawfulness, damage and causal link), as opposed to its classification as an objective mechanism of allocation and distribution of risks between the contracting parties.

Obviously, we would not reasonably find a univocal answer to such a dilemma, and the adoption of one or the other would depend on a series of factors, among them, in practice, the one that would be more consistent and adequate to the interests at stake of the protagonists of such a controversy.

Another clause that would usually give rise - in the practice of this type of transaction - to various conflict scenarios resulting from the execution of an M&A contract (whether of shares or assets), which could ultimately lead to complex commercial litigation, would be that arising from a (possible) self-regulation of the "knowledge" to which the buyer had or should have had access, in accordance with the provisions of the SPA or, as the case may be, in addition to the provisions of the applicable local legislation, could result in the buyer assuming (or not) liability for such risk and, in the latter case, attempting to be indemnified.

In order to establish certain interpretative guidelines aimed at settling disputes, the source of which would be based on how the contracting parties behaved during the due diligence, judicial or arbitral precedents that, according to the particularities of the case, would be applicable, should obviously be analysed in a complementary manner.

It should be noted that, what should normally be evidenced (and externalised) - as standards of conduct to be complied with by the parties during due diligence - on the seller’s side, the duty to provide relevant information, and very modernly - in accordance with a trend established by comparative case law - the buyer´s obligation to "self-inform", in this sense, adopting measures of diligence, investigation and care, under the protection of the guiding principle of "good faith", of imperative application from the pre-contractual stage, unlike what happens in Common Law practice, in which its scope would be, in such an instance, non-mandatory to the parties.

To sum up, LATIN COUNSEL is delighted to share and present the contents of this high profile Report, for the benefit of its more tan 75,000 subscribers in Latin America, Spain and in the United States
 
RODOLFO G. PAPA
(LATIN COUNSEL correspondent in Argentina)  





CENTRAL AMERICA
(Regional Perspective)
BLP
Vivian Liberman



1. What are the M&A predictions for 2024 in Central America?

In 2024, the M&A landscape is showing signs of recovery following a challenging 2023. Key players suggest that private equity M&A activity is set to rebound gradually. Corporate acquisition activity is expected to strengthen, particularly in sectors such as Energy, Technology, and Healthcare. Factors contributing to this positive outlook include the S&P 500 Index ending the year at record highs, resilient corporate balance sheets, improved financing markets, and growing CEO confidence. Financial sponsors are poised to play a pivotal role, acting as both buyers and sellers, driven by a substantial amount of dry powder awaiting deployment and a growing inventory of aging private equity-owned assets. Noteworthy trends encompass the impact of activist campaigns advocating for M&A solutions, sustained corporate separations, and the potential for cross-border M&A spurred by regional economic challenges. Despite lingering challenges, the overall sentiment points towards a more optimistic outlook for M&A activity in 2024, with various sectors and players contributing to the anticipated rebound.
In addition, a steady rate environment, as opposed to a rising one, is expected to support a gradual increase in dealmaking. The stability in rates provides buyers with a clearer understanding of their deal costs, even in the presence of relatively expensive financing. This clarity can instill greater confidence in pursuing acquisitions, as buyers can navigate with more certainty amid a steady rate environment.

2. Which sectors are the most active in M&A today in Central America?

Currently, the most active sectors in M&A are Energy and Natural Resources, Healthcare, Technology, and Private Equity/Family Offices, along with Financial Services. These sectors are witnessing notable deal activities, reflecting diverse opportunities and strategic movements in the M&A landscape.

3. What are the trends in due diligence, and are clients demanding the use of AI tools to perform due diligence processes in Central America?

The landscape of due diligence is witnessing a transformative shift with a notable trend towards the integration of AI tools to streamline M&A processes. AI is expected to exert a profound impact on improving the efficiency, speed, and overall performance of these procedures. The specifics of AI implementation are still emerging, but there is a growing recognition of its practical applications both in the short term and long term.
Clients are increasingly demanding the incorporation of AI tools into due diligence processes, driven by the potential to enhance various stages of M&A transactions. Specifically, contract analytics emerges as a high-impact application for AI, offering improvements in letter of intent (LOI) negotiation, contract due diligence, definitive agreement and TSA negotiation, as well as contract renewals and integration.
The trends indicate a paradigm shift towards leveraging AI tools in due diligence, with clients increasingly recognizing their value in navigating the complexities of M&A transactions.


LATIN AMERICA-WIDE
(Regional Perspective)
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
(NEW YORK)
Paola Lozano



1. What are the M&A predictions for 2024 in Latin America?

Uncertainty with respect to interest rates and currency exchange rate fluctuations, as well as political instability, continue to dampen M&A activity in the region. However, we are optimistic that some of those fears will ease as the year progresses and that certain sectors can be resilient to face those headwinds.
We continue to see significant intra Latin America activity, driven mainly by local conglomerates consolidating to core businesses in their home jurisdictions by offering assets to seasoned, risk friendly investors or synergistic platforms as well as diversifying geographically.
We have various deals in the pipeline that attract large tickets and we are confident there will be more, but we continue to experience longer timeframes to completion.  The extended timelines are mainly a result of cautious risk management by buyers, fewer bidders per asset (except for a few very attractive targets) and more complex structuring to bridge valuation gaps.

2. Which sectors are the most active in M&A today in Latin America?

We continue to see a significant number of transactions in the energy sector -with particular focus on clean energy-. Infrastructure investment continue to attract foreign capital but, while there are some mature assets changing hands through M&A, most of the action in the segment happens in the project finance space.
Interest in accessible financial services and fintech remains strong. While there’s already significant consolidation in traditional financial services, non-bank lenders and new technologies attract willing investors through high growth potential. Other services like brokerage, wealth and investment management services continue to be interesting.
The nearshoring trend has also created an M&A market for certain manufacturers and related services, especially in Mexico, followed (at a significant distance) by Costa Rica. 

3. What are the trends in due diligence, and are clients demanding the use of AI tools to perform due diligence processes in Latin America?

Despite all the noise around AI and the fact that we, like most large firms, are very focused on staying at the forefront of the trend, we have not seen a significant change in the way our clients are approaching the process.  The driver for our clients, and for us, continues to be producing user-friendly bottom line assessments, in a cost-effective manner, while ensuring thoughtful analysis of underlying facts. The thoughtful, reliable analysis and the ability to draw articulate and actionable conclusions based on data remain elusive to AI so we continue to press on the value added of experienced legal minds for the more meaningful part of the diligence process.


ARGENTINA
BRUCHOU & FUNES DE RIOJA
Estanislao Olmos



1. What are the M&A predictions for 2024 in Argentina?

In 2024, Argentina is poised for a transition year marked by a new government’s efforts to ease regulatory burdens on private activity, including a potential tax reform and a privatization of same public companies. The success of these initiatives remains uncertain, but they could attract local investors to seize business opportunities. However, new foreign investor traction is expected to be limited, except in specific sectors like oil & gas, mining, and agribusiness. On the other hand, some M&As that were delayed last year during the uncertainty of national elections, may finally move forward this year.

2. Which sectors are the most active in M&A today in Argentina?

Key sectors currently driving M&A activity include oil & gas, mining, and agribusiness, along with notable movement in the banking- and finance-markets. The departure of foreign players and the growth of fintech firms contribute to the dynamic landscape.

3. What are the trends in due diligence, and are clients demanding the use of AI tools to perform due diligence processes in Argentina?

Despite AI’s early adoption in the Argentine legal market, significant deployment is still evolving. Major firms are investing in training and exploring efficient and cost-effective AI tools for due diligence. However, the local market’s constraints limit substantial capital expenditures on such technology.


BRASIL
MATTOS FILHO
Paula Vieira de Oliveira



1. What are the M&A predictions for 2024 in Brazil?

The landscape for M&A transactions in Brazil during 2023 was notably affected by political and economic uncertainties both locally and globally. Despite these challenges, foreign investment was less impacted than domestic activity during the first semester due to the comparative attractiveness of Brazilian assets. A more conservative stance from domestic investors could be observed in the beginning of the year, due to the uncertainties related to the change in government, certain credit related events and high interest rates. In the second half of the year, a more optimistic outlook emerged, spurred by the Central Bank’s interest rate cuts, improved economic growth projections, controlled inflation, and political stabilization. This shift contrasted with global trends and catalyzed an increase in domestic M&A activity, featuring larger transactions.
For 2024, the outlook is positive, with a noticeable increase in M&A activity observed from the year’s outset. This uptick is attributed to increasingly favorable macroeconomic factors, a more stable local political environment, the advancement of legislative reforms, and the dual dynamic of investors needing to deploy capital and looking to exit its backlog of existing investments.
The environment for IPOs is also expected to become favorable, with anticipated growth in 2024. One of the main reasons is an expected significant gradual reduction in interest rate until the end of the year. Additionally, there is a huge pipeline of local companies ready to IPO this year. The capital market’s recovery is likely to lead to an increase in M&A activity too.
 
2. Which sectors are the most active in M&A today in Brazil?

The sectors of technology, healthcare, pharma, education, and agribusiness, active in 2023, are expected to maintain their momentum into 2024. The energy sector, particularly renewable energy, is poised for significant activity due to Brazil’s critical role in the global energy transition.
The influence of Environmental, Social, and Governance (ESG) guidelines is growing, with foreign financial sponsors increasingly considering sustainability as an important factor in M&A opportunities.
Medium-sized companies are also becoming more involved in M&A transactions, aiming to expand their market share. This trend is bolstered by favorable economic indicators for investment seen at the start of 2024.

3. What are the trends in due diligence, and are clients demanding the use of AI tools to perform due diligence processes in Brazil?

The market now offers advanced technological tools that enhance the speed, accuracy, and cost-efficiency of due diligence processes. These tools are increasingly used for comprehensive analyses of commercial contracts, enabling users to read, compare, search, and highlight critical data efficiently.
The demand for and application of such AI tools in due diligence processes vary, but their utility in streamlining the evaluation of commercial agreements is increasingly recognized and valued.


CHILE
CAREY
Pablo Iacobelli and Jaime Coutts

 

1. What are the M&A predictions for 2024 in Chile?

Considering the latest developments in the economy, both nationally and worldwide, among which we can highlight the control of the inflation rates and the relatively more optimistic forecast for year 2024, we think that 2024 should be a busier year if compared to 2023 in terms of M&A in Chile. The latter can be supported by the fact that 2024 should be a less intense year in terms of political activity in Chile, which would lead to a lower level of uncertainty, which is something positive for the M&A activity in the country.
We anticipate that conservative investors that put certain transactions on hold during the last year given the less favorable scenario will reactivate certain M&A processes.
Additionally, the impressive performance shown by the Santiago Stock Exchange during 2023 and the beginning of 2024 may increase the appetite for public M&A deals, especially for those companies that are considered to have an undervalue of their shares’ prices according to expert analysts.
Also, the exchange rate has maintained an elevated level, which makes the country an attractive investment destination for international investors. In addition, central banks, including the Chilean Central Bank, have started plans to lower interest rates, which will result in more favorable financing conditions for investors.
Finally, another trend that we are seeing is that certain local business groups/families that during the last few years were sending money abroad given the sociopolitical situation and uncertainty in Chile, are now gradually returning to invest in the country.
Considering these all reasons, we anticipate an interesting 2024 for the M&A activity in Chile.

2. Which sectors are the most active in M&A today in Chile?

With the recent reactivation of the M&A activity, there are certain sectors that have increased their levels of activity of M&A transactions.
First, the infrastructure sector has returned to an intense activity level. This may be explained by the fact that investors in this sector weigh highly the long-term stability forecast of the country. Therefore, more positive views on the political stability of the country for the upcoming years have attracted more investors to this sector.
Another current busy sector for M&A in Chile is the agribusiness industry. This trend could be the result of the strategy of international investors in this sector of expanding their footprints in the country to consolidate their Latin American divisions (given the sophistication of the industry in the country) and to have a strategic location to export products to the growing Asian market.
Also, the mining industry has shown a surprising growth in terms of M&A activity in the country during the last months. One of the factors that has influenced this trend is the newly implemented national lithium strategy launched by the Chilean government in April 2023. The latter, along with the fever of electromobility, have highly contributed to a high appetite for the lithium industry. Additionally, we have also seen a continuous interest of investors in copper, which has resulted in M&A transactions in copper mining companies as well.
Finally, industries such as energy and logistics have been able to maintain steady levels of M&A activity in Chile, achieving a couple of years of good streak in terms of M&A deals.

3. What are the trends in due diligence, and are clients demanding the use of AI tools to perform due diligence processes in Chile?

As with other areas of the legal profession, we are seeing certain trends that are shaping how due diligence processes are being conducted nowadays.
First, internal M&A and legal teams of companies are each day more robust and sophisticated, so clients are requesting external legal advisors very specific tasks, reviews and deliverables. Therefore, currently it is uncommon to perform full legal due diligence processes with extensive fully descriptive due diligence reports. In turn, clients are preferring shorter due diligence reports (with "traffic lights" contingencies’ categories) with accurate executive summaries and straightforward recommendations. Consequently, law firms need to duly understand clients’ needs in order to conduct due diligence processes in an effective and useful way for them.
Also, areas such as compliance, cybersecurity and data protection are gaining importance in due diligence processes, especially in deals that involve multinational companies/business groups buying local or regional companies. The latter since buyers are trying to assess how far are target entities of their standards in such areas.
Another item to highlight is that R&W insurances are becoming more popular in deals involving Chile. In this sense, it is being necessary to adapt to the process and structure involving this kind of insurance, which also includes how due diligence are performed and presented in reports, in order to be helpful for clients which are trying to contract these insurances.
Finally, we have not seen a widely spread use of AI tools to conduct due diligence processes nor specific requests from clients in this regard. We have seen certain tools developed to keep track of the review of documents, report contingencies, and to organize Q&A processes, however, not specifically involving AI. Nevertheless, it is not a mystery how fast technology advances, so we do not discard that the use of AI in due diligence processes becomes more popular very soon.


COLOMBIA
PHILIPPI PRIETOCARRIZOSA FERRERO DU & URÍA
Claudia Barrero



1. What are the M&A predictions for 2024 in Colombia?

So far this year we have seen an increase in M&A activity. The economy has not fully recovered and there is some regulatory uncertainty, so the market continues to be a buying market where those who have cash have an advantage.  For the remainder of the year, we don’t expect transactions with very high tickets, but we do expect more transactions with medium tickets.

2. Which sectors are the most active in M&A today in Colombia?

The sectors that we expect to have the most activity are technology (including Fintech), renewable energy, telecommunications, infrastructure (concession companies) and retail.   We also see a lot of activity in distressed M&A.  The education and health sectors are less active, but we expect some activity in the second quarter.

3. What are the trends in due diligence, and are clients demanding the use of AI tools to perform due diligence processes in Colombia?

Clients are not yet demanding the use of AI, but they are expecting it and, in any case, they are demanding very fast and focused processes, which means that firms are being forced to implement AI solutions for these processes. We have seen a reduction in diligence and more reliance on "Representations and warranties", and R&W insurance policies.


SPAIN
PÉREZ-LLORCA
Iván Delgado



1. What are the M&A predictions for 2024 in Spain?

After a period of prolonged growth in recent years, at the end of 2022 several factors came together to create a complex scenario at the transactional level. Inflation, rising interest rates, geopolitical tensions and macroeconomic uncertainty have made it difficult to close deals, and some of these transactions, far from being cancelled, have been placed on stand-by in the hope that financing costs will improve and interest rates will stabilise.
We believe that 2024 will see a gradual reactivation of M&A, especially large cap deals, many of which have been delayed until investment conditions are more favourable. This reactivation may be motivated by several factors: investors’ demand for returns on their investments, the maturity of investment funds’ portfolios, and the divestment of non-core assets from large corporations to focus their strategy on more strategic investments. We are confident that private equity will continue to play an important role and drive transactional activity in the coming months.

2. Which sectors are the most active in M&A today in Spain?

Opportunities will appear across all sectors, although higher quality assets and, above all, those with a ‘green’ component will continue to attract more interest, i.e. the importance of ESG criteria when evaluating a transaction will increase, as it has become a prerequisite for many LPs.
There are sectors such as real estate, services and consumer goods that have been more affected because they are directly related to the health of the economy, and may take longer to recover.
Others, however, are less prone to instability, and this is the case for the infrastructure, energy and technology sectors. In Spain, investments in the development of renewable energies are continuing to take place, with several transactions led by funds, generally sovereign or infrastructure funds. The same circumstances apply in Portugal, where we opened an office and practice Portuguese law to provide excellent service to our clients and business partners in the Iberian market in a fully integrated and seamless fashion.

3. What are the trends in due diligence, and are clients demanding the use of AI tools to perform due diligence processes in Spain?

Technology is increasingly present in due diligence, with the aim of saving time and optimising the lawyer’s efficiency in order to provide the client with a better service. Accordingly, tools have been introduced as part of legal matters to help manage due diligence by distributing the work among professionals, to optimise Q&A, but above all to assist in documentation review, where AI has gained a strong foothold.
Clients are increasingly expecting these tools and, as a result, there is a growing interest in the use of these technologies in their matters, as they enable them to automate processes, analyse large volumes of data, identify risks and opportunities, and facilitate communication and collaboration between stakeholders.
The most commonly used technologies in due diligence are document management platforms, artificial intelligence systems and big data. Technology has become a differentiating and competitive factor in the due diligence market, and clients are increasingly demanding that providers have innovative solutions adapted to their needs.


MEXICO
GALICIA ABOGADOS
Manuel Galicia



1. What are the M&A predictions for 2024 in Mexico?

While we saw a downturn of M&A transactions during the first half of 2023, the second half picked up speed in deals of this nature. To a larger extend, the foregoing was possible thanks to the resilience shown by the US economy that resulted in a reduction of inflation and a strong labor market.
For the current year 2024, we continue to be optimistic on M&A-Nearshoring-related opportunities as we feel confident this trend will continue to evolve. It is certainly important to keep in mind the Mexican Presidential elections will be held in June, as well as US elections takes place in November. Although this may dampen somewhat investor confidence in the second half of this year, we consider the international geopolitical landscape (US-China commercial conflict and other scenarios) favors the continuous integration of supply chains in North America for the benefit of their three country members, including Mexico.
Another positive note we consider is that the United States Mexico Canada Agreement (the "USMCA´s"), is celebrating its third anniversary which, although not without its issues, confirms the vigor of the commercial and investment relationships between the parties and M&A opportunities thereto. In this respect, Mexico has become the first trading partner of the US.
The overall global environment seems to look fine for the Mexican economy. The major investment banks’ forecasts estimate a 2.9 % GDP growth for 2024, with Mexico’s Central Bank anticipating to lower interest rates by March.
Needless to say, it is important to monitor evolving economic conditions, election outcomes and global market dynamics. In such an environment, flexibility and planning will continue to be essential to take advantage of business opportunities.

2. Which sectors are the most active in M&A today in Mexico?

In line with the above-mentioned scenario, manufacture, logistics and data centers, transportation, industrial real estate, tech and financial services are areas in which we have noticed a raising interest. Health is likewise a very active sector, as well as hospitality, infrastructure and energy.

3. What are the trends in due diligence, and are clients demanding the use of AI tools to perform due diligence processes in Mexico?

We are experiencing an increase in the demand of due diligence processes, covering compliance and ESG matters.
Likewise, the use of R&W insurance coverage, specially in cross border auction bidding processes, have impacted the scope of due diligence processes.
On the other hand, AI has awakened enormous interest during the last years worldwide, specially as of last year with the large consumer base using Chat GPT. The legal industry is no exception, efforts by multiple law firms and stakeholders to incorporate AI into their processes are well documented. Although firms in our market are optimistic about the potential of AI offering for the future of  the sector, some skepticism remains as to its general use in the short term. In our case, we are in the process of implementing AI tools to assist our team in various efforts, including contracts drafting, as well as for talent recruitment and BD efforts.
Due diligence is a good example of AI evolution, clients will surely demand in the future procedures to make such investigation more streamlined and efficient.


PERU
REBAZA, ALCÁZAR & DE LAS CASAS
Alberto Rebaza



1. What are the M&A predictions for 2024 in Peru?

As for the Peruvian market, it looks like things are quite positive. Even though government of President Boluarte has big challenges ahead regarding social demands and the reduction of social conflicts, investors and key economic groups have surpassed this political uncertainty and are actively searching for opportunities to acquire or sell relevant or strategic assets at competitive prices. As shown by Transactional Track Record, in 2023, over 140 M&A transactions were completed with no indicators that could show a decrease of its current momentum.
Further, the World Bank has projected a rise in Peru’s economic capacity by 2.5%, based on the expected higher production of copper, as well as a decrease in interest rate, which adds to the general positive predictions of M&A transactions.

2. Which sectors are the most active in M&A today in Peru?

Today, the most important sectors in Peruvian M&A transactions are the mineral resources, agribusiness, and electric energy markets. During 2023, more than 10 mineral resources, 6 electric energy and 6 agribusiness transactions led the M&A landscape.
As to the agribusiness industry, Chilean and North American investors have kept interest in further involvement in the Peruvian market. Also, Central American investors seek to continue investing in the local market, as its domestic markets may be too small to fulfill its demands.
On the other hand, European and North American investors are interested in the electric energy market, as the demands for "clean and renewable energy" and the need to acquire hydroelectric, solar and/or wind power assets or even companies are still in force.

3. What are the trends in due diligence, and are clients demanding the use of AI tools to perform due diligence processes in Peru?

As to specific trends, due diligence processes have added an specific focus over environmental and social impact of new possible investments. ESG impacts on new investments have become a priority for both public regulators and investors, as they need to comply with national law and international standards of the specific industry. Apart from that, the due diligence process in M&A transactions in the Peruvian market have remained standard.
Regarding AI tools, there is no specific development in the Peruvian transactional market, neither clients demanding their use.


VENEZUELA
D’EMPAIRE
Fulvio Italiani



1. What are the M&A predictions for 2024 in Venezuela?

Last October the U.S. government decided to temporarily lift U.S. sanctions affecting the Oil & Gas sector. As a result of this, the Venezuelan economy is expected to grow significantly impulsed by a predicted moderate increase in oil production, the traditional engine of the Venezuelan economy.  This will translate into increased M&A activity in the Oil & Gas sector.  The temporary lifting of U.S. sanctions on the Venezuelan Oil & Gas sector is the best Venezuelan economic news of the last 10 years. The big uncertainty is whether the U.S. government will decide to renew the temporary lifting of sanctions on April 18.

2. Which sectors are the most active in M&A today in Venezuela?

Oil & Gas.

3. What are the trends in due diligence, and are clients demanding the use of AI tools to perform due diligence processes in Venezuela?

No demand of AI tools in due diligence processes in Venezuela, for the time being. 




INDEX OF AUTHORS 
(In alphabetical order -following its Spanish language version- according to jurisdiction and/or region)

-INTRODUCTION-
RODOLFO G. PAPA
LATIN COUNSEL
Email: rodolfo.papa@latincounsel.com

-CENTRAL AMERICA- (Regional Perspective)
VIVIAN LIBERMAN
BLP
Email: vliberman@blplegal.com

-LATIN AMERICA- (Regional Perspective)
PAOLA LOZANO
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP (NEW YORK)
Email: paola.lozano@skadden.com

-ARGENTINA-
ESTANISLAO OLMOS
BRUCHOU & FUNES DE RIOJA
Email: estanislao.olmos@bruchoufunes.com

-BRAZIL-
PAULA VIEIRA DE OLIVEIRA
MATTOS FILHO
Email: pvieira@mattosfilho.com.br

-CHILE-
PABLO IACOBELLI and JAIME COUTTS
CAREY
Email: piacobelli@carey.cl and jcoutts@carey.cl

-COLOMBIA-
CLAUDIA BARRERO
PHILIPPI PRIETOCARRIZOSA FERRERO DU & URIA
Email: claudia.barrero@ppulegal.com

-SPAIN-
IVÁN DELGADO
PÉREZ-LLORCA
Email: idelgado@perezllorca.com

-MEXICO-
MANUEL GALICIA
GALICIA
Email: mgalicia@galicia.com.mx

-PERU-
ALBERTO REBAZA
REBAZA, ALCAZAR & DE LAS CASAS
Email: alberto.rebaza@rebaza-alcazar.com

-VENEZUELA-
FULVIO ITALIANI
D’EMPAIRE
Email: fitaliani@dra.com.ve