How has the acquisition, sale, and financing of business changed? | Fusiones, adquisiciones y reestructuraciones

Yasmin Valdez  | 06 de noviembre de 2020  | Vistas: 225

Given the current uncertainty, the UFM Business School organized a webinar with local and international practitioners to anticipate and develop new business opportunities from a legal and financial perspective. The first session, facilitated by Jorge Luis Arenales; Paul Schnell, and Alejandro Jaramillo discussed the effect of the pandemic regarding mergers and acquisitions (M&A), as well as the restructurings of businesses in Latin America and the United States.

Paul Schnell explained that M&A is being affected in different ways by COVID-19, but international investors view Latin America as a great opportunity to make investments. He mentioned three aspects that attract investors to this region:

• The similarity of the cultures
• Rule of law
• Regulatory predictability

I think Latin America right now is positioned as a good place to invest." — Paul Schnell

Alexandro Jaramillo shared that mergers and acquisitions create growth and opportunities for companies. He pointed out that some industries have grown during the pandemic, referring as an example to healthcare, food & beverage, consumer goods, and the packaging industry. Also that the trade tension between the United States and China is creating convenience for the Latin American regions.

The most important challenges for M&A are finding a common cultural fit and developing trust between the counterparties, on the legal side Schnell emphasized that corruption is also a struggle. These concerns have been more complex during the crisis considering social distancing. Jaramillo expressed that the volatility and unpredictability of countries in terms of jurisdiction, rules of negotiations, and changes in laws sometimes hold back foreign investors.

As soon as COVID-19 took place all the casual projections changed." — Alejandro Jaramillo

To close the conversation, they gave some key recommendations for investing and financing businesses, what has changed concerning deals because of the sanitary crisis, and general projections for the future.