Mexico M&As: The Trump Impact

The Mexican M&A outlook under a Trump Administration.

BY JOACHIM BAMRUD

If President-elect Donald Trump decides to exit or make significant changes to the North American Free Trade Agreement (NAFTA), cross-border mergers and acquisitions would be negatively impacted, experts warn.

The value of announced M&As in Mexico jumped 37.3 percent last year to $19.8 billion, according to Thomson Reuters. However, during the first nine months this year they fell 53 percent to $5.1 billion, in part due to the uncertainty around the US elections. 

Companies, investors and law firms on both sides of the US-Mexico border are now looking at two different scenarios for NAFTA. Either Trump makes minor changes or he tries to renegotiate major changes and even exits the pact altogether. 

“If the elected president decides to exercise his authority over foreign affairs to renegotiate or withdraw from NAFTA, investors may wait or stop their investments in Mexico until they can measure the outcome of such measures,” warns Luis Rubio, a partner at the Mexico office of Jones Day who was a member of the team that negotiated NAFTA on behalf of the Mexican government. 

And a full exit from NAFTA ...

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Keywords: Agriculture, Auto, Basham, Bimbo, Cemex, Grupo Mexico, Jones Day, Mexico, NAFTA, Vitro,