10 Jul 2020

Latin America Covid-19 woes see region's M&A activity plunge to lowest on record

Deal value in first six months of the year falls below previous record low in 2003, Mergermarket report shows

Graph Falling Down in Front Of Brazil Flag. Crisis Concept

Natanael Ginting; Shutterstock

Latin America M&A activity suffered its worst first half of a year on record as the coronavirus pandemic ripped through the region and left dealmakers unable to pursue new transactions.

Total deal value plunged to $8.1bn, 77% lower than the same period in 2019, eclipsing the previous record low set in the first half of 2003 when $9.2bn of deals were signed off, according to Mergermarket’s 1H20 M&A report.

Viviana Balan, research relationship manager for the Americas at Mergermarket, said: “As Latin America entered 2020, it not only faced a slowing economy, but also stared into the face of an on rushing global pandemic. As the last region to be hit in late February with Covid-19, about a month after the first case in the US was confirmed, Latin America still struggles to control the spread even as countries outside the region begin to reopen their economies.”

That sharp drop off in deal flow created opportunities for firms working on larger transactions to rocket up Mergermarket’s Latin America advisory league table by deal value, with Debevoise & Plimpton surging 79 places to take the top spot. It worked on three deals worth a combined $2.3bn in the first six months of the year, compared to just $186m-worth of deals in 2019. 

Second placed Weil Gotshal & Manges had an even bigger rise, soaring a whopping 126 places having advised on two deals worth $2.2bn, up from just $10m between January and the end of June last year. Gibson, Dunn & Crutcher jumped 10 places to third, advising on just one deal worth $2.2bn — 55% lower than last year. Brazilian firm Mattos Filho, Veiga Filho, Marrey Jr. e Quiroga Advogados clung on to fourth spot, advising on 16 deals worth $1.8bn.

The slowdown had less impact at the top of the league table by deal count. Brazil’s Pinheiro Neto Advogados held on to its number one ranking, advising on 23 deals — albeit four fewer than in 2019. Mattos Filho’s 16 deals helped it climb one spot to second, despite working on three fewer transactions than last year. Brazilian peer Demarest Advogados slipped one place to third, advising on 11 deals — nine fewer than 2019. White & Case and Baker McKenzie were the only non-Latin American firms to break the top 10, ranking fourth and seventh respectively (with nine and eight deals).

Balan added: “The recovery of M&A activity in Latin America strongly depends on how countries in the region continue to deal with Covid-19. As Latin America was one of the last geographies to be hit by the pandemic, countries are still experiencing growth in case numbers. M&A activity in the region can be expected remain low for the coming months.”

Mergermarket: Latin America 1H 2020 Deals by Value
1H20 1H19 Firm Value ($bn) Deals
1 80 Debevoise & Plimpton 2.3 3
2 128 Weil Gotshal & Manges 2.3 2
3 13 Gibson, Dunn & Crutcher 2.3 1
4 4 Mattos Filho 1.8 16
5 44 Cescon, Barrieu, Flesch & Barreto 1.2 8
6 6 Cleary Gottlieb Steen & Hamilton 1.2 3
7 3 White & Case 1.1 9
8 1 Pinheiro Neto 1 23
9=  - Abreu 1 1
9=  - MLGTS 1 1

Mergermarket: Latin America 1H 2020 Deals by Volume
1H20 1H19 Firm Value ($bn) Deals
1 1 Pinheiro Neto 1 51
2 3 Mattos Filho 1.8 46
3 2 Demarest 0.4 39
4 7 White & Case 1.1 34
5 9 Brigard & Urrutia 0.08 32
6 22 Cescon Barrieu Flesch & Barreto 1.2 32
7 13 Baker McKenzie 0.2 31
8 59 Creel Garcia-Cuellar Aiza y Enriquez 0.2 30
9 10 Veirano 0.1 23
10 19 Lobo de Rizzo 0.9 22


Further reading on deals

Latin America Covid-19 woes see region's M&A activity plunge to lowest on record — Deal value in first six months of the year falls below previous record low in 2003, Mergermarket report shows

Asia Pacific region least impacted by coronavirus-fuelled global M&A slowdown — Indian law firms dominate top echelons of Mergermarket's APAC M&A advisory league tables

Freshfields and DLA Piper top European H1 M&A tables for value and volume as deal activity plunges — Allen & Overy and Herbert Smith Freehills jump up rankings as Slaughter and May drops out of top 20

Covid-19 sees US M&A activity suffer bigger decline than during financial crisis — Wachtell Lipton and Kirkland & Ellis cling on to top league table positions despite slowdown

Global M&A slowest since financial crisis as deal appetite slumps amid Covid-19 pandemic — Latham & Watkins replaces Wachtell Lipton Rosen & Katz at top of global M&A advisory league table for first half of 2020

Q1 global M&A suffers sharp fall as Covid-19 bites

Wachtell tops US M&A advisory rankings as Covid-19 pandemic halves Q1 dealmaking

Political uncertainty weighs on Latin America M&A activity in first quarter

Asia Pacific M&A slowdown fails to derail region's top deal advisers

Wachtell, Sullivan and Kirkland top global M&A ranking after a near-record year for mega deals

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