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| A billboard in Mexico City depicting Donald Trump |
It was a gloomy time for Mexican M&A advisers. Donald Trump had just been elected president of the US on the back of repeated threats about how he was going to scrap the North America Free Trade Agreement and slap hefty import tariffs on Mexican goods. The peso was plummeting and dealmakers were fretting that acquisitions might come unstuck.
Mars’ purchase of Mexican chocolate maker Turin, for instance, had almost collapsed because of the impact of the peso’s decline months before Trump had even been elected, according to a person familiar with the deal.
The prognosis was grim.
“It was like if you are driving a car and you suddenly pull up the handbrake, that’s exactly what we felt here,” says Martin Plettner, a partner at Mexico City-based M&A advisory Rion. “Many of the deals that we were managing at the time either slowed down or came to a complete halt. The reason for that was because it was such an unexpected win, all the premises a buyer was basing acquisitions on became invalid overnight.”
Yet while domestic activity stalled to its lowest point since 2009 and inbound interest remained relatively subdued throughout the opening months of the year, Mexican companies were shrugging off concerns about Trump and busy shopping for assets in the US.