Latin America – Geopolitics will set the tone

The Latin America (LatAm) M&A market reported more than 1600 transactions over the course of 2025, with an aggregate value of over US$80 billion according to LSEG data – an increase of almost 15% in volume and 35% in value in comparison with 2024.

Deals in the energy sector accounted for a significant part of the high-value transactions in the regional and inbound segments, but in terms of volume the numbers were more evenly spread across the energy, financial, materials, technology and industrial sectors.

Despite these positive numbers, geopolitical uncertainty will likely set the tone for M&A activity in LatAm in 2026.

Venezuela 

Several rounds of nationalisation by various Venezuelan administrations over the years resulted in the majority of international oil and gas companies ultimately exiting the country. Among other factors, this led to low levels of capital investment in the oil and gas sector and a gradual decline in hydrocarbon output such that production is now a fraction of its prior highs.

Given Venezuela's vast reserves (by some measures the largest in the world), the oil & gas sector has the potential to be a major focus for future investment in the country. However, given the current posture of the US administration towards Venezuela and the past experience of investors, it is still too soon to predict the impact of the recent developments on M&A activity.

Brazil

The high tariffs imposed by the US government on many of Brazil's biggest export products in early 2025 (most of which were reduced towards the end of that year) did not seem to affect the country’s status as the main destination for regional and inbound M&A in LatAm.

However, 2026 is likely to be a year of caution among dealmakers as, in October 2026, LatAm's largest economy will hold general elections. The acute political uncertainty experienced by the country in the last few years – which is invariably heightened in election years – is likely to impact the appetite and timing for deals in 2026.

Mexico

The joint review of the United States-Mexico-Canada Free Trade Agreement (USMCA) scheduled for July 2026 may also bring trade uncertainty as it starts the clock for the expiration of the treaty in 2036 (if an extension is not agreed). The US is expected to continue using trade policy as leverage to achieve political objectives, and this could affect investment decisions in Mexico. However, M&A activity in the country may continue to benefit from western companies looking to diversify away from China and establish supply chains south of the US border.

Chile

Notwithstanding the turbulence in neighbouring countries, Chile has been historically perceived as one of LatAm's most stable jurisdictions – which is highlighted by the country's third place in LatAm's ranking of regional and inbound M&A destinations. Chile is also the world’s largest producer of copper, a metal for which demand is expected to outstrip supply in the next decade due to its central role in the transition to a low-carbon economy. This scenario should continue to favour Chilean targets in 2026.

Argentina

The Promotional Regime for Large Investment (RIGI for its Spanish acronym) enacted in mid-2024, with the aim of enhancing certainty and legal stability for certain long-term investments in Argentina's forestry, tourism, infrastructure, mining, technology, steel, energy, and oil and gas industries, may prove attractive for foreign investors. RIGI includes tax, customs, and currency exchange incentives which are protected from future regulatory changes. Applications for the regime are expected to close on 8 July 2026, with a possible extension until 8 July 2027.

Where are the opportunities?

The evolving LatAm geopolitical landscape will no doubt be closely monitored in 2026 by players ranging from oil majors eager to re-enter Venezuela to dealmakers looking for strategic assets in the region.

Chinese investment in LatAm may be under more intense scrutiny as a result of US influence and local governments' use of regulatory levers (such as FDI, anti-trust and even health, safety and environmental regulations) to delay or block investments to the extent they are not favoured from a political perspective. In our experience, dealmakers are more likely to find a way through such issues when legal, commercial and communications teams work together from the outset of the deal to map out problems and discuss potential solutions.

Regulatory uncertainty may also create valuation misalignment – parties who are able to move away from fixed numbers and agree dynamic consideration structuring to share upside and downside are more likely to bridge that gap.

However, opportunities should continue to arise. Sectors aligned with global growth themes – such as digital infrastructure, renewable energy, natural resources and finance – are expected to continue attracting interest in the region. Moreover, the rise of governments regarded as market-friendly in Chile and Argentina could favour M&A activity in those countries, in particular in the mining and energy sectors.