An increase in initial public offerings and other deals in Latin America has been good news for law firms engaged in cross-border transaction work.

Three of the region’s biggest players—Argentina, Brazil and Mexico—have seen an increase in transaction activity this year, lawyers say.

“In Brazil, we’ve seen over the last nine months an increase in the IPO and capital market activity,” said Wade Angus, a Jones Day partner who works in New York and Sao Paulo.

Brazil’s capital markets have been dampened for years by political scandals, but the market seems to be on the rebound, Angus said.

Wade Angus, Jones Day partner in New York

David Lubarsky

In Mexico, deals are up because people see a window of opportunity before the Mexican presidential election, according to Nick Grabar, a Cleary Gottlieb Steen & Hamilton partner in New York. And Argentina is experiencing the most activity it has seen in years, said Francesca Odell, another Cleary partner.

Cleary represented Chile, Uruguay and the Dominican Republic in four bond offerings priced in June and valued at a combined $4.5 billion. Jones Day also represented Chile’s Minera Escondida Limitada as it signed a $300 million loan agreement to finance the expansion of Escondida copper mine.

“Brazil was definitely halted for some period of time, and that has slowly been picking up,” Odell said. “The rest of Latin America was slow largely as a result of the U.S. election because there was a lot of uncertainty as to what may happen. It’s taken a while for that to settle a little in their mind. What we are seeing now is an increase in potential transactions, some of which have been contemplated for some time.”

Although the majority of the IPOs coming out of Brazil will be listed in the Sao Paulo exchange, a portion is headed to U.S. markets, Angus said. That may be a boon for law firms handling global mergers and acquisitions in Latin America. Brazil’s No. 3 airline, Azul, in April raised $645 million in a dual offering in Sao Paulo and New York.

“A lot of the activity we see now are bigger companies that may want to do an IPO of a division,” Angus said.

He noted the activity is coming from substantial companies untouched by Brazil’s political scandals and are looking either for an exit or an IPO for realization.

“You’re seeing a dual track IPO and M&A. Companies say they are going to go public in an IPO, while at the same time shopping themselves or a division around to pursue a dual strategy,” Angus said. “It’s a good opportunity to look at Brazil and assets that under different conditions wouldn’t be available.”

Overall, M&A is increasing, but deals are about price and opportunity because financing is difficult for many companies, he said.

Bargains To Be Had

A number of companies touched by corruption scandals are in the deal mix as well. They have to sell assets to pay for their government settlements, Angus said.

“Good time to buy because the prices can be a relative bargain and there’s a lot for sale,” he said. “Because of the corruption scandals they can’t get financing, so they have to sell assets to continue operating their business.”

Lawyers and their clients are looking at any of the companies that have been involved in the Lava Jato scandal, as well as J&F Investors, the holding company of Brazilian meatpacker JBS S.A., which is selling a number of assets such as Eldorado Pulp and Paper Co., he said. Shares in JBS rose last month, helped by bargain-hunting and speculation about potential takeover interest. The billionaire Batista brothers, who control the company, have admitted to bribing politicians in a case that has led to charges against Brazilian President Michel Temer.

In March, JBS agreed to buy U.S.-based ham and bacon producer Plumrose USA for $230 million from Danish Crown.