What sectors of key emerging South American economies are netting the most M&A activity from Chinese investors, and what should those investors be on the watch for? Alainna Wrigley reports
At the opening of a forum with the Leaders of the Community of Latin American and Caribbean States in January, President Xi Jinping announced that China would channel US$250 billion in investment projects into Latin America over the next decade. In May, Chinese Premier Li Keqiang visited Chile, Peru, Colombia and Brazil during his first Latin American tour – the third to the region since the start of the new administration – and called for more economic cooperation.
Recent research reveals that cross-border M&A in Latin America has experienced consistent growth in terms of volume and value since the start of the decade, outpacing other regions worldwide. Some of the biggest China-sourced deals in recent years have focussed on the energy and mining sectors of South America, such as the acquisition of Xstrata Las Bambas by China Minmetals subsidiary MMG, the second largest Chinese outbound transaction of 2014.
Chinese investors are turning their sights to the wealth of possibilities available in other industries of the emerging markets of Latin America. This report considers investment into seven countries in the southern Latin America region – Argentina, Chile, Colombia, Ecuador, Peru, Paraguay and Uruguay. Experts from the region were surveyed on the major and emerging industries of interest, as well as legal developments which could potentially affect the smooth execution of a transaction.