Corporate Development Challenges and Opportunities

The region’s business sector is vibrant and rapidly modernizing. Investments by local business and FDI are creating major regional players in the industrial, commercial, and service sectors. Increasingly, domestic groups are attaining leadership positions at Latin American regional levels and on a global basis.

Strategic foreign investors with a long-standing presence in the region have long recognized what newer entrants are now realizing: Latin America is not only an efficient and reliable source of export manufacturing but also internally one of the largest and most profitable consumer markets worldwide – one that cannot be ignored.

Investors, both strategic and financial, who are sensitive to the economic and social realities of the region, have achieved compelling success. Their challenge continues to be molding modern goods and services to meet the aspirations and wide ranging purchasing power of the population.

What has been true in other developing nations that have undertaken the path to global economic aperture also applies to most Latin American countries. Business sectors that have adapted to the new economic realities by rethinking their business focus and acting accordingly, have seen swift growth in shareholders’ value. Others that have failed to analyze or understand these implications or have been unable to execute change, are rapidly destroying value by lagging behind.

Many of the leading, long-standing, local companies are private, 2nd or 3rd generation family-held and run. Faced with increasing competition from multinational players, many choose to undertake massive modernization programs via capital investments, adoption of outside professional management, joint venture with foreign partners, and/or expansion into other countries inside LatAm. Others take a more conservative approach by profitably divesting their businesses to either multinational players or to strong local competitors so as to capitalize on their many years of effort and market share achievement.

Identifying and executing corporate development strategies in this region between foreign investors and local business families has always been particularly challenging. It requires a high level of professional competence, an ability to understand, communicate, and bridge the cultural and business practices effectively among both sides, as well as strong access and credibility inside each country’s business, economic, political, and social fabric.

Since 1994, our firm has had a growing presence in assisting both multinational players and local business families in their corporate development projects in Latin America.