Uruguay’s mergers and acquisitions (M&A) landscape has demonstrated resilience and growth, positioning the country as an attractive destination for investment in Latin America. In 2023, Uruguay recorded 20 M&A transactions, maintaining a stable performance despite global economic challenges. The majority of these deals were concentrated in the trade and services sector, encompassing global services, fintech, technology, and trading companies.
The country’s economic structure further supports this trend, with services accounting for 69.7% of GDP, industry 24.1%, and agriculture 6.2%. The technology and mass consumption sectors have shown remarkable dynamism in recent years and are expected to continue as growth drivers in 2024. Notably, companies in the fintech sector, such as Bankingly and Prometeo, have attracted significant international investments, consolidating Uruguay’s position as a technology hub in the region.
Regulatory Landscape: Distinctive Features
Uruguay’s regulatory framework for M&A has evolved to align with international standards while incorporating unique national characteristics. In 2020, the country implemented a pre-merger control regime requiring prior authorization for transactions exceeding a combined local turnover of approximately USD 65 million in any of the past three fiscal years. This shift from a post-closing notification system to an ex-ante control regime enhances oversight and ensures fair competition.
Additionally, Uruguay has specific tax regulations concerning goodwill in corporate restructurings. As per Decree 64/021, to avoid considering goodwill for tax purposes, ultimate beneficial owners must maintain at least 95% of their equity proportions for a minimum of two years post-merger or spin-off. This requirement underscores the country’s commitment to transparency and long-term investment stability.
Historical M&A Activities:
Over the past decades, Uruguay has witnessed several significant M&A transactions across various sectors. Below is a list of notable deals:
- Union Agriculture Group’s acquisition of El Tejar’s Uruguayan assets (2014) – USD 170 million.
- Banco Santander’s acquisition of ABN AMRO Uruguay (2008) – USD 175 million.
- Scotiabank’s acquisition of Nuevo Banco Comercial and Discount Bank (2015) – Undisclosed.
- BBVA’s acquisition of Crédit Uruguay Banco (2010) – Undisclosed.
- Banque Heritage’s acquisition of Lloyds TSB Uruguay (2013) – Undisclosed.
- Atlantica Yield’s acquisition of Estrellada S.A. (2018) – Undisclosed.
- Goldman Sachs and Klaff Realty’s acquisition of Tienda Inglesa (2016) – Undisclosed.
- PepsiCo’s investment in Colonia Free Zone plant expansion (2019) – USD 50 million.
- Mondelez’s acquisition of Cadbury Uruguay (2019) – Part of global acquisition.
- Wisetech Global’s acquisition of Softcargo Group (2020) – Undisclosed.
- Banque Heritage’s acquisition of Banco Surinvest (2011) – Undisclosed.
- Banque Heritage’s acquisition of Lloyds TSB Uruguay (2013) – Undisclosed.
- Scotiabank’s acquisition of Discount Bank (2015) – Undisclosed.
- BBVA’s acquisition of Crédit Uruguay Banco (2010) – Undisclosed.
- Banque Heritage’s acquisition of Banco Surinvest (2011) – Undisclosed.
These transactions reflect strategic decisions aimed at market consolidation, expansion into new sectors, and leveraging Uruguay’s stable economic environment. While many deals have been successful, challenges such as regulatory compliance and integration complexities have also been encountered.
Recent Developments
In 2024 and early 2025, Uruguay’s mergers and acquisitions (M&A) landscape has been marked by several significant transactions, reflecting the country’s dynamic investment environment.
Clorox’s Divestment in Uruguay
In March 2024, Clorox announced the sale of its operations in Uruguay, along with those in Argentina and Paraguay, to Apex Capital, a private equity firm. This strategic move aimed to streamline Clorox’s portfolio and enhance profitability. The sale resulted in a one-time charge of approximately $233 million, impacting the company’s third-quarter fiscal 2024 earnings. Clorox indicated that its Argentina operations contributed about 2% of their fiscal 2024 net sales forecast, and the sale could reduce the annual net sales growth target by about half a point.
Banco Itaú’s Acquisition of Resonet S.A.
In 2024, Banco Itaú completed the acquisition of Resonet S.A., a company specializing in point-of-sale (POS) payment systems. This acquisition aligns with Itaú’s strategy to expand its digital payment solutions and strengthen its presence in the Uruguayan financial services sector.
YPF’s Divestment in Offshore Project
In early 2025, Argentina’s state-controlled oil company YPF entered negotiations to sell its stake in an offshore exploration project in Uruguay. This divestment is part of YPF’s broader strategy to focus on the Vaca Muerta region, Argentina’s prolific oil and gas area. The company aims to streamline operations and concentrate resources on core assets.
Marfrig and Minerva’s Deal Under Scrutiny
In May 2024, Brazilian meatpackers Marfrig and Minerva faced scrutiny over their proposed deal involving the sale of 16 slaughtering plants, including three in Uruguay, valued at 7.5 billion reais. While Uruguayan antitrust authorities had not officially blocked the deal, concerns were raised about its impact on competition. Analysts noted that the Uruguay plants represented 16% of the total beef slaughtering capacity Minerva aimed to acquire.
Conexión Ganadera’s Financial Challenges
In late 2024, Conexión Ganadera, a prominent Uruguayan livestock company, faced financial difficulties following the death of its founder, Gustavo Basso. The company declared a deficit of USD 250 million and initiated an external audit to assess its financial situation. Negotiations to acquire República Ganadera were halted, leading the latter to file for voluntary bankruptcy.
These developments underscore Uruguay’s active M&A landscape, driven by strategic realignments, market consolidation, and evolving economic conditions.
Strategic Decisions and Reasoning
The strategic rationale behind M&A activities in Uruguay often revolves around:
- Market Expansion: Companies seek to enter or strengthen their presence in the Uruguayan market, leveraging its strategic location and access to Mercosur.
- Diversification: Firms aim to diversify their portfolios by acquiring entities in different sectors, mitigating risks associated with market fluctuations.
- Technological Advancement: Acquisitions in the fintech and technology sectors enable companies to enhance their technological capabilities and competitiveness.
- Operational Synergies: Mergers often result in cost savings and efficiency improvements through the consolidation of operations.
Future Outlook
Looking ahead, Uruguay’s M&A landscape is poised for continued growth, particularly in the technology and mass consumption sectors. The development of the Lab+ accelerator fund, a partnership between Ficus Capital and the Pasteur Institute, is expected to energize investment in biotech startups. Moreover, the country’s stable political environment, legal certainty, and favorable tax incentives continue to attract foreign investors.
Sources and References
- Uruguay is an attractive destination for M&A activity – Uruguay XXI
- Mergers and Acquisitions – Uruguay | Market Forecast – Statista
- Uruguayan Government modifies rules applicable to goodwill in corporate restructurings – EY Global Tax News
- Uruguayan government regulates merger control review – Ferrere
- Economy of Uruguay – Wikipedia
- Union Agriculture Group – Wikipedia