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PwC: Argentina to experience a boom in M&A under Milei with energy as the focus

Argentina's mergers and acquisitions market could grow significantly in the coming years if President Javier Milei's economic reforms continue, Juan Tripier, director of M&A and corporate finance at PricewaterhouseCoopers (PwC) Argentina, told .

Investors are showing renewed interest in Argentina after Milei's actions, which include a sharp reduction in inflation and government spending, a restored surplus fiscal, and loosened foreign exchange controls.

"Two or three years ago, you would have contacted a multinational company, an investor from abroad, and Argentina was considered a bad name. This has changed since Milei was elected president," Tripier stated in an interview in Buenos Aires.

He added, "There is a lot excitement." "This excitement is shared by both international players or international investors and local players."

Tripier stated that Argentina can surpass previous M&A peak years in three to five year, where there were 120-150 deals per annum, with diverse activity across sectors like agribusiness and food.

In the past, multinationals in Argentina have mainly invested in energy, mining and technology. However, foreign investors will now be expected to invest more into other industries.

PwC data shows that in 2024 Argentina will have recorded 99 M&A transactions, the most since 2019. Transaction values are expected to reach $8 billion, which is the highest amount since 2017.

Investors remain cautious despite the recent surge in interest due to the lingering restrictions on dividend repatriation and high country risks.

"Now that you are talking to investors overseas, they look at opportunities. They would have said: Argentina is not in the picture. They are now analyzing the investment and saying: "I want to wait until the economy consolidates before I make a decision," Tripier said.

Vaca Muerta is the second largest unconventional gas reserve in the world and the fourth largest oil reserve. It's located in Neuquen province, one of Argentina's most popular attractions.

"With the increase in investments not only in upstream development but also in infrastructure--pipelines, processing plants, and liquefied natural gas projects--we expect realignments aimed at diversifying producers' exposure, with some buying and others selling," said energy lawyer Jose Martinez de Hoz of Martinez de Hoz & Rueda.

Daniel Dreizzen (former Secretary of Energy Planning, director at Aleph Energy) projects that hydrocarbon exploration investment will reach $11.553 billion by 2024.

There's been lots of M&A activity. Dreizzen explained that Aleph is talking with investors who are interested in Argentina. They're cautious, given our past track record, but they're also looking for opportunities. (Reporting and editing by Eliana Razewski)

(source: Reuters)