Real Estate & Construction Sector Emerges as Bright Spot in Latin America's M&A Slowdown in 2023

In the shadow of Latin America's subdued M&A landscape for 2023, the Real Estate & Construction sector stood out, bucking the broader trend with a robust increase in deal volume. Amid a challenging year for dealmaking, this sector, alongside Mining and Hospitals & Healthcare, was among the few to register an uptick in transaction volume in the region.

Deal activity within Real Estate & Construction in Latin America surged 40% from the previous year, breaking the 100-transaction threshold. The sector's aggregate value climbed by more than 31% year-over-year to nearly USD 6.0 billion, as investors sought refuge in the midst of a fragile macroeconomic climate.

Brazil was pivotal to this growth, with Real Estate & Construction deals there increasing by 54.3% year-over-year, totaling 71 transactions, and the collective deal valuation escalating by 25.3% to reach USD 3.0 billion. In stark contrast, the country’s broader M&A market, which is Latin America's largest, saw an 18% decrease in the number of deals to 1,010, while the aggregate value of these deals tumbled by more than 40% to USD 32.8 million.

Brazil also hosted the sector's largest transaction: Hapvida's USD 909 million sale and leaseback deal for 10 properties. Other key deals included the USD 693 million purchase of Advance Desarrollo in Mexico by Walton Street Capital and Credit Suisse's USD 290.5 million investment in a Brazilian logistics property portfolio.

The Mining sector, too, registered a 32.7% increase in deal count to 73, with activity spiking in Chile and Mexico. Despite this, the total value of deals in the sector shrank by 46% to USD 4.4 billion, highlighted by Lundin Mining's USD 950 million acquisition of the Caserones copper-molybdenum mine in Chile.

In terms of value increase, the Hospitals & Healthcare sector saw the most significant jump, with total value of regional transactions skyrocketing by 233% to USD 3.4 billion. This was largely due to Junior Seripieri Filho's USD 2.3 billion acquisition of United Health's Amil, marking a historic investment by a private investor in Brazil's M&A history.

Yet, even with these bright spots, the leading sectors, including IT & Internet, Finance & Insurance, and Services, faced a significant decline. A combination of rising political instability and a dismal economic outlook led to an 18.1% year-over-year decrease in M&A deals across Latin America, with the total number of transactions in 2023 falling to 1,670 and their overall value dropping by 34.4% to USD 61 billion.

EMIS alongside leading global law firm CMS, are pleased to have launched the Emerging Europe M&A 2023/24 Report, exploring the trends and data within the region, on both a country and sector basis, coming in January 2024. Download your complimentary copy.