Investors will keep their eyes on Mexico to buy or acquire companies in 2018. Despite the expected inflationary outlook of 2018, Fintech Law will drive acquisitions, the operation of a second stock exchange and a greater proximity in Mexico’s commercial relationship with China.
Mergers and acquisitions in Mexico have been growing steadily to represent five percent of gross domestic product (GDP), compared to three percent five years ago. It is expected that the trend will reach 10 percent of GDP by 2027.
With uncertainty still surrounding the NAFTA, it will be strategic for Mexico to keep an eye on China as a potential commercial partner in its intention to reduce dependence on the United States.
The sectors most likely to be engaged in mergers and acquisitions are the financial sector thanks to the Fintech Law, infrastructure and food industries.
Oil sector mergers and acquisitions won’t happen until there is certainty with NAFTA on tax and logistics. However the renewable energy and gas industry will continue to see some activity.
The best time to buy is when there is uncertainty, because the valuations of companies tend to fall there are many agreements valued in pesos.