Deals of the YEar awards
According to Augusto Urmeneta, head of global corporate and investment banking for Latin America at Bank of America, mergers and acquisitions have been the “great equalizer” of investment banking, compensating for much of the revenue lost on account of the slump in equity markets.
BofA, which wins the award for M&A House of the Year, took advantage of the opportunity it saw in M&A, leading a number of the region’s most important transactions over the course of the year. The bank’s M&A revenue soared to $133 million between October 2021 and September 2022, almost tripling the amount it earned over the previous 12 months.
The performance guaranteed the bank a 15.6% share of the regional M&A market, topping the league tables after finishing 3rd one year before.
“Our long-term M&A strategy has paid off,” says Urmeneta. “In 2022, what we were not able to do in equities because volumes dropped so much, we did in M&A deals.”
That strategy hinged in part on developing powerful in-region capability, with bankers close to clients to spot opportunity for deals, he says. The bank also has a dedicated M&A team split between New York and São Paulo, with bankers focused on sectors. “The main thing is to be global, but local as well,” Urmeneta says.
As a result, the bank has been able to participate in plenty of local and cross-border deals. Among the latter, it led some important transactions such as the $767 million sale of Argentina’s lithium producer Neo Lithium to China’s Zijin Mining Group and the acquisition of Brazil’s chemical firm Oxiteno by Thailand’s Indorama for almost $1.5 billion.
For Urmeneta, the cross-border deals play to the firm’s key strengths, especially as a global institution with considerable breadth of presence on the one hand, but also as a tight-knit organization with exemplary collaboration between units.
“Latin America is core to Bank of America. It is very important for the global franchise, and we are executing deals for Chinese and US companies, for example, in the region,” he says.
Urmeneta is also confident that M&A activity will remain strong in the months to come, despite the market volatility.
“As companies have less access to equity capital markets, M&A becomes more of an option. That might include selling a portion of a business or merging with another company,” he says. “This is something we may see more down the road in 2023. High growth companies that are currently depleting their cash reserves yet have a solid business proposition might be better off merging with another company to better withstand market volatility.” LF