M&A OUTLOOK 2025

The editor of Latin Counsel, Rodolfo G. Papa, is pleased to present this report, ‘M&A Outlook 2025’, which includes the answers to five ‘macro’ questions (listed below), which have been answered by twelve corporate lawyers who can undoubtedly be described as ‘leaders’ in the negotiation and structuring of mergers and acquisitions of companies Companies’, recognised as such, not only in their respective jurisdictions of practice (as "Local Counsels"), but also, at a continental level, focused on sharing a vision of their development prospects for the year 2025.
In this sense, we are very grateful and recognise the authors: Paola Lozano (Skadden, Arps, Slate, Meagher & Flom, New York), Vivian Liberman (BLP, Costa Rica), Estanislao Olmos (Bruchou & Funes de Rioja, Argentina), Paula Vieira de Oliveira (Mattos Filho, Brazil), Claudia Barrero (Philippi, Prietocarrizosa, Ferrero DU & Uría, Colombia), Pablo Iacobelli and Jaime Coutts (Carey, Chile), Diego Pérez and Juan Manuel Marchán (Pérez Bustamante & Ponce, Ecuador), Iván Delgado (Pérez-Llorca, Spain), Manuel Galicia (Galicia Abogados, Mexico), and Alberto Rebaza (Rebaza, Alcazar & de las Casas, Peru), for their contribution for the third consecutive year.

Below, we share the questions answered by these authors:

1. What main trends do you anticipate will shape the M&A landscape in 2025, especially in terms of industry focus and geographic activity?

2. How do you anticipate changes in regulatory frameworks will impact M&A activity in 2025, especially with the evolution of antitrust laws and international trade agreements?

3. Given current economic conditions, what factors do you expect to influence company valuations in M&A transactions in 2025?

4. How will advances in technology and digital transformation drive M&A strategies in 2025, especially in sectors such as healthcare, finance and technology?

5. What changes do you foresee in financing options and deal structures by 2025, especially in light of fluctuations in interest rates and capital market conditions?

For obvious reasons, and because it is a source of continuous updating and training, we recommend reading this report because, in addition - in this third consecutive year of its preparation - it exhibits, as a distinctive feature, not only the analysis of ‘state-of-the-art’ legal issues related to the conclusion of this type of transaction in the jurisdictions consulted, but also a truly comprehensive approach to certain national ‘macro-economic’ variables ( GDP growth expectations, inflation, interest rates, among others) that are expected to occur during the current year, and which - in reality - are evaluated by the major local and foreign players when it comes to ‘decision making’ for the acquisition of local companies and/or assets.
By way of summary, and based on the responses provided by their authors, we can point out that the Latin American jurisdictions consulted (along with Spain) offer enormous ‘potential’ in certain key sectors of the economy when it comes to structuring an investment (through an M&A transaction), including, among others: mining, oil & gas, renewable energy (lithium and wind farms), retail, banking, fintech , agroindustry, technology, and the establishment of call centres (as described in the Chilean case).
Among the latest generation issues that globally govern the ‘due diligence agenda’ in an M&A operation, and which, based on the responses that make up this report, have been incorporated into transactions involving Latin American targets, we highlight the following: database treatment and protection, cybersecurity policies and procedures, succession liability for non-compliance and/or compliance vulnerabilities (in view of the validity of local laws that have attributed autonomous criminal or administrative-infringement liability to private legal persons for the payment of bribes to local and foreign public officials), with an impact on the successor or acquiring entity (as the case may be), given that due diligence would not exonerate the successor from liability (except as provided by Peruvian law), ESG policies, among others.
On the other hand, we cannot fail to point out that in the past year, 2024, there has been a growing and consolidated trend - in our region - to generate doctrinal, editorial and jurisprudential content linked to the study and research of the law applicable to an M&A contract (or commonly referred to as an ‘SPA’), from the perspective of the ‘local law’ that is applicable.
In this sense, it should be noted that in several Latin American jurisdictions there is a construction of content that clearly - through the contribution of doctrine, academia, and the issuance of arbitral awards - has analysed and qualified certain ‘key’ contractual institutes generated by Common Law, under the prism of ‘Local Law’.
Although the Anglo-Saxon influence on the design and structuring of this type of transaction involving local companies and/or assets is undoubtedly still relevant, not only in terms of ‘best practices’ and ‘recommendations’, but also through the case law handed down by the most prestigious and globally recognised court in the resolution of disputes arising from the execution of an SPA. We are referring to the Chancery Court of the State of Delaware (United States).
It is also relevant that access to commercial arbitration is incorporated into the backbone of provisions in an SPA entered into with Latin American target companies as the mechanism conventionally chosen by the contracting parties for the resolution of disputes resulting from its execution, whether in exclusively domestic transactions or with foreign counterparties.
Certainly, the adoption of arbitration as a tool for conflict resolution in the SPA, and the publicity (over the last 20 years) of several awards whose ratio could be considered, both from a professional and academic point of view, true ‘leading cases’, has had its recognised reception (at a regional level), for example, more specifically, in Colombia.
We are very pleased to say that Latin Counsel continues to position itself as a ‘leading forum’ in the generation of news, information and content related to the conclusion of M&A transactions in Ibero-America.
Among all the actions and activities carried out by the team that makes up this brand, with regard to the treatment and approach to the current affairs of this type of transaction carried out in our region, we can mention the dissemination and publicity of relevant deals concluded in our markets, the dissemination, marketing and face-to-face participation in international events that bring together thousands of lawyers (as was the case recently with the annual meeting of the International Bar Association, held in October last year in Mexico City, and other regional meetings that took place in Latin America), interviews with local lawyers who are leaders in their professional practice (in addition, of course, to the authors of this report), the publication of news and opinions on substantive legal and regulatory issues applicable to this type of transaction, and also the offer of professional training and education alternatives, such as the course ‘Structure of an M&A Deal’, which was launched in 2020 (in the midst of the pandemic) ), and which I had the opportunity to design and teach for the first time in that year, for the benefit of the Latin Counsel networking network.
After 5 years of existence, this course has been taught (in remote format) to more than 400 Latin American lawyers from 13 countries in the region, and at an in-house level, for the benefit of 3 leading international firms in Central America.
In conclusion, and for the third consecutive year, the LATIN COUNSEL team is pleased to share and present the content of this Report, for the benefit of its more than 80,000 subscribers in Latin America, Spain and the United States.

Rodolfo G. Papa (LATIN COUNSEL correspondent in Argentina)

LATIN AMERICA (REGIONAL OUTLOOK) | SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP (NEW YORK) | Paola Lozano

The US will continue to be the prevailing destination for LatAm-sourced capital seeking to diversify from LatAm or emerging market risk and LatAm will continue to present attractive opportunities for US-based strategic investors and financial sponsors seeking global expansion and big margins. Therefore we remain optimistic on the level of cross border M&A activity between the US and various countries in the region, both inbound and outbound.

However, the challenging rhetoric and public airing of differences between Mr Trump and the presidents of Mexico, Brazil, Colombia and other countries will likely give pause to some investors in certain industries, especially those that are highly regulated or that are dependent on foreign trade.

Exits by private equity funds and venture capital that have reached the investment and return cycles and by multinationals seeking to focus on their core business will also continue to generate deals.

We are also seeing that sovereign wealth funds and pension funds are willing to deploy capital in the region in 2025, enhancing competition for assets and businesses ripe for sale.

Finally, we believe M&A transactions driven by multilatinas, cash rich family offices and large local conglomerates will continue to contribute to overall M&A activity in the region, both as they diversify their country risk and as they monetize assets for the next generation that is not interested in running the family business in a traditional way.

Not surprisingly, we continue to see healthy global interest in energy and infrastructure assets in LatAm, as well as fintech and some other financial institutions, technology and services.

The Trump administration has been abundantly clear since before the election about its intention to cut back regulatory hurdles to business activity, including as it relates to M&A, antitrust and CFIUS review and enforcement. While cross border LatAm-related M&A activity was not necessarily the intended recipient of most of those changes, we do expect them to have a positive impact on the speed of execution of M&A deals that require filings with those regulators. There is a sense among many in the investment community that transactions will get an important boost from this approach.

However (as recently evidenced by the very serious and quick escalation of a disagreement aired in social media between the President of Colombia, Mr Petro, and Mr Trump, over the manner in which deportations are handled) the fear of a weaponization of tariffs and the use of free trade agreement renegotiation as leverage will likely reduce appetite for many sectors that would otherwise be expected to drive cross border M&A activity between LatAm and the US.

In balance, we are concerned that the politicization of international trade and regulatory oversight in the US, combined with the clash with idiosyncratic leaders in some of the largest markets in LatAm will have a negative effect on cross border deal flow.

Fortunately, there is plenty of activity driven by actors that have risk appetite for the emerging markets and appreciate the opportunities available to those knowledgeable about these markets and in sectors and transactions that are unaffected by these global tensions.

Currency fluctuations that affect the business model and earnings of a target will be closely watched by investors. Buyers will also continue to carefully conduct diligence over quality of earnings of their targets and question growth potential marketed by sellers.
To bridge the pricing gap between sellers and buyers, bankers and attorneys will have to continue to perfect earn outs, price adjustments and other sophisticated mechanisms, including preferred equity and mezzanine securities.

CENTRAL AMERICA (REGIONAL OUTLOOK) | BLP | Vivian Liberman