After years of M&A decline in Latin America, the deal market has seen two billion dollar deals in less than a month.
Belgium's Interbrew is buying control of Brazil's beermaker Ambev for about $11.5 billion, creating the world's biggest beer company. And Spain's Telefonica is to buy BellSouth's Latin American assets for $5.85 billion, creating the biggest regional cell phone operator.
Those deals came on the heels of Spain's BBVA's $4.2 billion February bid to buy the 40.6 percent stake it does not already own in Mexican bank Bancomer. Why?
For one thing, the euro is hovering at all-time highs against the dollar, the region's dominant currency, making European purchases 30% cheaper than two years ago. And, the weakening dollar has helped Latin export markets for commodities like steel and lumber, particularly to booming China, boosting regional economic growth. Equally important is the maturation of Latin American business, which has attracted foreign companies looking to build market share for consumer-oriented markets.
The dollar value of Latin deals fell to $12.5 billion in 2003 from $119 billion in 2000, with 725 deals in 2000, compared with 86 deals in 2003, according to Dealogic, the financial data provider.