Mexico M&A and Private Equity Forum

October 5, 2017 | St. Regis, Mexico City

Welcome to Mergermarket's annual Mexico Forum

Acquisition opportunities have proliferated in Mexico thanks to a steadfast commitment to economic liberalization and reforms encouraging foreign investment. The country now ranks as the 17th largest market for Foreign Direct Investment (FDI) globally. Nowhere is this more obvious then with the domestic energy sector. Since opening the oil and gas industry to foreign capital and development in 2014, five auctions have taken place. The most recent, in June, saw 10 oil exploration and production contracts awarded to bidders that include some of the world's major oil companies. Foreign investors can be reassured that the country’s growing US$6.9bn account deficit will be funded by FDI and foreign loans, primarily from the US, Spain and The Netherlands. This in turn will help to boost the productivity of transportation, manufacturing, consumer, power and energy sectors.

The enactment of liberalization policies and other reforms over the last few years have prompted cautious investors to shrug off concerns around Peso volatility, cartels and political relations with its northern neighbor. In fact, Credit Suisse recently revised its projections for 2017 Mexico GDP expansion to 2.4% from 1.7%. In a Mergermarket DealDrivers publication that surveyed industry practitioners, many predicted an acceleration of M&A activity in 2H17, especially in the mid-market segment of the economy.

Please join the Mergermarket team and esteemed panelists in this exploration of investment and M&A opportunities throughout the Mexican landscape.

    • 08:00

      Registration

    • 08:30

      Opening Remarks

    • 08:45

      How Changing Economics Will Affect Mexican Dealmaking

      In 2H16, a volatile MXN/USD exchange rate riled many dealmakers with fewer halting M&A offers altogether. However, in 1H17 the Mexican currency staged a comeback gaining 13% against the Greenback and giving a boost to M&A activity. Value rose 25.6% from 2H16 and up 106.6% from 1H16, with 29 deals worth US$5.1bn. Inbound acquisitions of Mexican assets held steady, which bucked the greater Latin American trend of falling foreign investment by 17.3% in value.

      Panelists will discuss how Mexico's macroeconomics and policies will impact M&A dealmaking over the next 12 months, including but not limited to:

      • Which sectors will feel the pinch from the government's spending reduction plan that aims to tackle the fiscal deficit?
      • What does growth in imports, inflation, equity markets, currency appreciation, interest rates and current account deficit mean for foreign investment and M&A?
      • How will a resurgent US economy create opportunities for foreign investors in Mexico?
      • What regulatory reforms lie on the horizon that will impact M&A transactions?
      • How are investors positioning themselves for the upcoming 2018 elections?
    • 09:30

      Coffee Networking Break

    • 10:00

      How Are Foreign Investors Sourcing Deals?

      Businesses and assets in the manufacturing, transportation, consumer, financial services, power and energy sectors represent some of the best opportunities throughout Mexico. Two noteworthy deals were struck in the spring signaling continued vitality throughout Mexico: The largest acquisition occurred when Australia-based IFM Investors' infrastructure fund financed Magenta Infraestructura's US$1.08bn 42% stake in OHL Mexico, S.A.B. de C.V., a developer and operator of transportation infrastructure. In April, UK-based developer Solarcentury acquired a 400MW portfolio from ECOSolar via auction. Highly competitive auctions in the oil and gas and electricity markets, which both feature low production costs, existing infrastructure, and an investor-friendly regulatory framework, will ensure dealmaking continues at a fierce pace.

      Panelists will discuss what sectors and assets M&A and private equity teams will be assessing over the next 12 months, which will include but not be limited to:

      • Will the Mexican tech industry get a boost from international tech outsourcers as the US administration looks to restrict H-1B visas?
      • Will Mexican manufacturing continue to hold the top spot for international investment over next 12 months, especially in light of currency exchange rates?
      • What factors should investors consider in potential opportunities for consumer retail and food M&A?
      • What are important differences in offshore exploration and production between Mexico and Brazil that investors should be aware of?
      • Assessing revenue, profit margins, inventory levels, degrees of leverage, credit market access, cost of capital, productivity, supply and demand elasticity, and market structure of favored sectors. 
    • 10:45

      Closing Remarks

Venue details

The St. Regis Mexico City
Paseo de la Reforma 439
Cuauhtémoc, 06500 Ciudad de México
CDMX, Mexico