2024 M&A Year in Review - Flipbook - Page 80
80
Geopolitics
Americas
Optimism remains that a cross-industry boom in
U.S. dealmaking is on the horizon, even as a second
Trump administration introduces near-term
political and economic volatility.
While the business community largely anticipates
the Trump administration to take a more probusiness stance, the administration’s “America
First” approach — coupled with a broader global
shift away from multilateral institutions and toward
a more transactional approach to foreign relations —
brings a new set of challenges and opportunities.
The potential for renewed global trade tensions casts
a layer of uncertainty over market dynamics.
In Latin America, Argentina’s recently elected probusiness government under President Javier Milei
took initial steps to curb inflation, leading to hope
that the country could attract investors and reverse
the country’s declining M&A activity. However,
regional uncertainty persists. Mexico’s new
government and Brazil’s ongoing macroeconomic
instability — marked by local currency devaluation
— contribute to a volatile investment climate.
Nonetheless, Latin American infrastructure and
energy investment is expected to remain strong in
2025, as investors seek targets in countries with
strong fundamental growth prospects and
relatively flexible foreign investment regimes.
Already, shifts in valuations and deal prospects are
emerging across key industries in the United States
— notably in the energy and automotive sectors —
reflecting the distinction in policy priorities between
the Biden and Trump administrations. Under Biden,
stricter carbon regulations and generous subsidies
for clean energy and electric vehicles promoted
green investment. In contrast, the Trump
administration has signaled a rollback of these
subsidies (including provisions of the Inflation
Reduction Act) and a renewed emphasis on
deregulation and expanded fossil fuel development.
The impact of unilateral trade measures
announced by the United States may generate
instability in the Americas and elsewhere. Treaties
like the USMCA have historically provided legal
certainty for dealmakers in North America. If those
instruments lose credibility or standing, eroded
investor confidence could disrupt deal flow and
investment plans in the region. On the contrary, a
new phase for the USMCA will trigger additional
interest in the North American region for investors
fleeing risks in other countries with a greater trade
tension with the United States.
