Monday, June 24, 2024

European companies investing more in Mexican acquisitions

In early August, the French company Vinci Airports announced it will become the leading shareholder of Grupo Aeroportuario del Centro Norte (OMA) by agreeing to purchase 29.99% of the Nuevo León–based company that runs 13 airports in Mexico, including one of its busiest, Monterrey International Airport.

A few weeks later, the Netherlands-based firm IMCD, a leading distributor of specialty chemicals and advanced materials, announced it had signed an agreement to buy 100% of the Mexico-based plastics firm PromaPlast.

“European companies see in Mexico an opportunity for investment in various sectors,” an article in Expansión magazine analyzing those moves and others declared this week.

According to data from the Bank of Mexico (Banxico), investment in Mexico by European countries represented some 17.5% of the total foreign investment at the end of 2021, an amount close to US $4.82 billion, according to Expansión, a Mexican publication focused on economics, finance and business.

Aeropuerto de Monterrey
Monterrey International Airport

Vinci is one of the top global operators of building and operating airports, with 57 under its wing before the OMA transaction, which was for nearly US $815 million, according to Expansión. Vinci runs hubs such as London Gatwick; Kansai International near Osaka, Japan; Lisbon; Lyon-Saint Exupéry in France; and Salvador Bahia in Brazil.

The 13 Mexican airports to be added to its portfolio when the deal is finalized which is expected to occur by the end of 2022, according to Vinci — include locations in Northern and Central Mexico such as Monterrey, Mazatlan, Chihuahua, Juárez, Culiacán, Acapulco and Zihuatanejo-Ixtapa. Monterrey is the fifth-most used passenger airport and third-most used cargo airport in Mexico.

“Vinci Airports is thus establishing itself in the third-most populous country in the Americas, where passenger numbers in the second quarter of 2022 already managed to exceed pre-pandemic levels,” the company said in a press release that noted the contract is through 2048. “[This 25-year] period will allow Vinci Airports to deploy its long-term partnership model to support the country’s tourism industry and economic growth.”

Foreign direct investment statistics
Foreign direct investment, first quarter comparisons 1999-2022 (Ministry of Economy)

PromaPlast, which is based in Lerma in México state, comprises PromaPlast Resinas, Proveedora de Materiales Plásticos and PromaPlast USA Inc. It’s a leading distributor in Mexico of specialized products for the plastics industry. The amount of the transaction wasn’t disclosed, but IMCD said the closing of the transaction will occur this month.

“The acquisition of PromaPlast is an exciting step into an important new market for IMCD Mexico and further expands our capabilities in the United States,” Olivier Champault, director of the IMCD Advanced Materials group, said in a press release. “PromaPlast is a complementary addition to our global network of advanced materials experts and underscores our commitment to expanding opportunities for customers in Mexico and suppliers looking for a strong and reliable channel partner in the region.”

According to Expansión, Vinci and IMCD will join many of the European companies that “we have known on a daily basis in Mexico for several years, and [which] have even been an important part of the national economy, such as BBVA, AB InBev, Nestlé, Bayer, Adidas, Santander, Zara, Boehringer, Henkel and Danone, among others.”

August saw other deals between European and Mexican companies, Expansión reported: Madrid-based VASS acquired Mexico City–based Hexagon Data; the London-based RS Group purchased Nuevo León–based Risoul; and Switzerland- and Germany-based Kempinski Hotels announced a deal to take over the Ritz-Carlton in Cancún.

Expansión reported that there were 18 instances of overseas companies investing in or buying Mexican companies in August, an increase of eight over the previous month and a 38.4% increase over the same period in 2021. For all of 2022, the magazine added, there have been 91 such transactions for approximately US $7.7 billion. 

With reports from Expansión and Simple Flying

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