US companies are primarily targeting Latin America for both greenfield projects and mergers and acquisitions (M&A).

A study by consultancy firm KPMG found that when it came to emerging markets, US companies had made a total of 116 company acquisitions in the second half of 2010. Brazil had the most activity with 21 acquisitions from US firms. Central America and the Caribbean recorded 17 acquisitions and other South American countries contributed for 10. Other top targets for US corporations in the second half of 2010 were India, China and Russia.

The M&A numbers correspond with figures from fDi’s latest Global Outlook report, which found that greenfield FDI projects were growing most rapidly in Latin America. This trend was most pronounced in Brazil, which attracted the largest annual increase in greenfield FDI in 2010 with a 29% gain. In fact, Latin America and the Caribbean was the only region to see an increase in greenfield capital investment in the year, thanks primarily to the results from Brazil.

The report stated: “On a global level, Brazil entered the top 10 destination countries in the world, moving from 11th position to seventh place in 2010 in terms of number of FDI projects attracted. Brazil ranked fourth globally in terms of capital investment and job creation.”

In Brazil itself, the city of São Paulo took in nearly 25% of the country’s FDI projects and was the top urban destination in the region.

Mark Barnes, principal at KPMG, stated that Latin America was ripe for acquisitions as they were undervalued with many deals still to be made. He said: “Brazil clearly stands out because it is one of the fastest-growing economies in the world. Brazil has a strong growing middle class with disposable income and an appetite for new goods and services. There are also significant opportunities going forward in specific sectors, such as infrastructure and energy, as the country gears up to host the 2014 World Cup and 2016 Olympics.” 

KPMG’s study, which tracked completed deals where an acquirer took at least a 5% shareholding interest, also noted a pick-up in emerging market-to-emerging market M&A deals. The report suggested that this meant these countries were becoming more comfortable with such ventures.