Market Insights Financial Corporate Finance

Mergers and Acquisitions - Central America

Central America

The transaction value in the Mergers and Acquisitions market is projected to reach US$1.46bn in 2024.
It is expected to show an annual growth rate (CAGR 2024-2025) of -25.34% resulting in a projected total amount of US$1.09bn by 2025.
The average transaction value in the Mergers and Acquisitions market amounts to US$53.81m in 2024.
From a global comparison perspective, it is shown that the highest transaction value is reached in the United States (US$1,359.00bn in 2024).

Market

Region

Region comparison

Currency

Analyst Opinion

The Mergers and Acquisitions market in Central America has been showing an upward trend in recent years.

Customer preferences: Companies in Central America are increasingly looking to M&A deals as a strategic tool to expand their market presence, diversify their offerings, and gain a competitive edge in the region. This trend is driven by the desire to achieve economies of scale, access new technologies, and improve operational efficiency.

Trends in the market: In countries like Costa Rica, there has been a notable increase in cross-border M&A activities, with local companies seeking partnerships with foreign firms to access new markets and enhance their global reach. Additionally, sectors such as technology, healthcare, and renewable energy are witnessing a surge in M&A deals as companies look to capitalize on emerging opportunities and stay ahead of the curve.

Local special circumstances: One of the unique aspects of the M&A market in Central America is the prevalence of family-owned businesses. These businesses often face challenges when it comes to succession planning and capital infusion, leading them to consider M&A as a viable option for growth and sustainability. As a result, there is a growing interest in intra-regional M&A transactions involving family-owned enterprises.

Underlying macroeconomic factors: The improving economic stability and regulatory environment in Central America have created a conducive atmosphere for M&A activities. Favorable government policies, increased foreign direct investment, and a growing middle class are all contributing to the expansion of the M&A market in the region. Additionally, the strategic geographic location of Central America as a gateway between North and South America makes it an attractive destination for cross-border M&A deals.

Methodology

Data coverage:

Figures are based on the revenue generated by the Investment Banking market, as well as the transaction value, the number of transactions, and the average transactions size of the Mergers and Acquisitions (M&As) and Initial Public Offerings (IPOs) markets.

Modeling approach / Market size:

Market sizes are determined by a bottom-up approach and are based on a specific rationale for each market. As a basis for evaluating markets, we use market research and analysis, as well as data from annual financial reports. Furthermore, we use relevant key market indicators and data from country-specific associations and national data bureaus, such as GDP, wealth per capita, and total investment (% of GDP). This data helps us to estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the particular market. In this market, we use the HOLT-damped Trend method to forecast future development. The main drivers are GDP per capita and total investment (% of GDP).

Additional Notes:

The market is updated twice per year in the event that market dynamics change.