KPMG survey: Investor confidence in Latin American M&A market strengthens

Trouillot: “Striking a deal in Latin America builds a unique ‘corporate muscle.’ The adaptability and grit needed to thrive in the region’s dynamic environment are exactly the skills global dealmakers now need to navigate uncertainty everywhere. Those who sharpen their expertise here emerge with a playbook—and a competitive edge — that prepares them for volatility in any market.”

• Confidence in the region’s risk landscape is on the rise: 65% of executives now dismiss the idea that M&A has “never been riskier” — a dramatic 27-point jump compared to 2023.
• Private equity firms are leading the charge, projecting their deal activity will climb from an average of 3.94 to 4.26 deals over the next two years, signaling robust optimism for the market’s future.

Trouillot: “Due diligence in Latin America has changed significantly. It’s no longer just about looking at past results — it’s also about testing what will drive future success. Since almost all organizations are adjusting how they structure deals to handle risk, it’s essential to make sure every deal is built on a strong foundation that can handle its region’s unique challenges. This means going beyond the numbers and asking deeper questions about how a business will perform in the face of uncertainty, regulatory changes and market volatility. Organizations are now expected to anticipate potential obstacles and build resilience into their deals from the very beginning.”

• This shift reflects the real challenges dealmakers face in getting reliable information. The report shows that the most difficult areas for thorough due diligence are legal (37%), financial (35%), and tax (35%). These are the pillars of any transaction, and uncertainty here can create significant risk. For example, unclear legal frameworks or incomplete financial records can make it hard to fully understand a target company’s true position.
• Because these core aspects are so challenging to assess, dealmakers are taking a more active role in managing risk. Nearly all (99%) now routinely adapt deal structures — including protective clauses, flexible payment terms or contingency plans — to absorb potential risks. This approach has become standard practice, helping organizations safeguard their investments and navigate the complexities of doing business in Latin America.

“With an eye on broadening the tax base, raising revenue more quickly and promoting tax transparency, governments are increasingly turning to the digitization of tax. As such, bringing tax professionals into the deal process early is more important than ever. Their expertise helps identify risks, uncover opportunities, and ensure that all tax issues are addressed before any agreements are made.” — Niren Saldanha, Tax Partner, KPMG LLP (US), and Latin America Deputy Tax Leader, Tax & Legal, KPMG Americas*

• Careful tax planning is no longer optional—it’s essential, with 90% of executives reporting that tax issues have reshaped past transactions. The report highlights that unexpected tax or regulatory problems can stop a deal in its tracks, leading to wasted time and resources. That’s why three out of four business leaders now make tax strategy a central part of their decision-making when considering mergers, acquisitions, or other major transactions. By being proactive, companies can avoid costly surprises and keep deals on track.
• The work doesn’t stop once the deal is signed. After a merger or acquisition, 4 in 10 executives (41%) say that one of the biggest challenges is making sure the combined company’s tax and legal systems work well together. This process can be complex, involving everything from aligning accounting methods to complying with different tax laws in various countries. Addressing these issues early helps companies realize the full value of their deals and avoid future legal or financial headaches.

Trouillot: “The chances of completing a successful transaction rise dramatically when a clear plan is in place for every stage of the process, right from the beginning. Moving away from isolated, one-off advice to a more unified approach is vital to make sure that the goals behind a deal actually lead to real, lasting benefits.”

• The growing need for integrated guidance comes from a major gap in traditional dealmaking. The stages following a deal — especially integration and ongoing value creation — are often where deals fall short of expectations. By focusing on these critical phases and ensuring continuous advisory support, organizations can better achieve the long-term results they set out to accomplish.

“A solid regional strategy may get you in the door for mergers and acquisitions in Latin America, but it’s the deep, local understanding that closes the deal. Each country brings its own business customs, legal requirements, and tax rules—factors that generic strategies often miss. The real key to success is combining a broad vision with specific, on-the-ground insights to unlock and safeguard long-term value.” — Doug Zuvich, Tax Partner, KPMG LLP (US), and Latin America Regional Managing Partner, Tax & Legal, KPMG Americas*

• Our research reveals a critical gap in executive priorities: While 43% of leaders say cultural fit is the biggest challenge after a merger, just 28% make it a top concern during the early stages of deal evaluation. This blind spot can lead to costly setbacks and missed opportunities.
• When reflecting on previous transactions, executives overwhelmingly point to underestimating people and culture issues as their most important lesson learned. This highlights that understanding local teams, communication styles, and workplace norms is just as crucial as financial and legal due diligence.
• As competition heats up across Latin America, companies that invest in local relationships and prioritize the human side of business are setting themselves apart. The message from industry leaders is clear: Success in the region demands more than strategy — it requires genuine local insight and respect for cultural differences.