Global M&A Trends Report |
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Trinidad and Tobago |
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(Latin America/Caribbean)
Firm
Hamel-Smith
Contributors
M.Glenn Hamel-Smith |
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| With respect to private M&A, what are three things on top of mind for M&A practitioners in your jurisdiction? | Three things top of mind for private M&A practitioners in Trinidad and Tobago are:
General: economic environment - Inflation coupled with continued low production of oil and gas (the main driver of the economy) continues to dampen the investment climate, although there are recent suggestions that inflation is slowing. Gas shortages that have led to the shutdown of some petrochemical plants and the operation of others below capacity have led to a slowdown in economic activity and a significant reduction in the availability of foreign exchange. The reduced availability of foreign exchange has significantly impacted the commercial sector as a whole, particularly the SME sector. General: political environment - While General Elections are not due until 2025, the economic conditions, foreign exchange shortages, the relatively high levels of crime, and the challenges in the ease of doing business arena have all combined to make the political atmosphere very charged with both of the main political parties seeming to be constantly in pre-election mode, particularly following the Local Government elections held in 2023 which produced little change to the status quo. Those combinations of factors make it challenging for some business activity although there has been a marked increase of acquisitions led by Jamaica entities in the local and regional market, so for some, it may seem to be a buying opportunity, while for those selling, it provides an exit opportunity. Regulatory: antitrust - The antitrust (merger control) regime is fairly nascent in the country and captures many transactions given the low thresholds and the fairly broad and encompassing provisions. The Commission has hinted at approaching the legislature with potential amendments to address some of these but these are not expected to be implemented for some time and the timeframe remains somewhat vague and uncertain. |
| With respect to private M&A, where does your jurisdiction see most deal activity? | Most private M&A deal activity is categorized as below mid-market. |
| With respect to private M&A, what sector sees the most deal activity in your jurisdiction? | Most private M&A deal activity is seen in the Financial Services sector. |
| What are your predictions for private M&A deal volume in your jurisdiction during 2024? | Private M&A deal activity in 2024 is predicted to be greater than 2023 deal activity, while 2023 had a couple of transactions, there are already a few more in the pipeline for 2024. |
| With respect to public M&A, what are three things on top of mind for M&A practitioners in your jurisdiction? | While regulatory issues affect public M&A transactions in the same way, they are less likely to give pause to the players in that arena as most of the transactions are still likely to be caught by the legislation and the particular thresholds, whether or not they are varied. While players in the public M&A space are affected by foreign exchange shortages, entities at that level tend to have more resources and other avenues to access foreign exchange than those in the private M&A arena. However, where the private M&A transactions involve external parties, those foreign exchange issues would not be likely to impact in the short term as they inject foreign exchange into the market. However, this can prove to be challenging later down the road where investors may have challenges in readily converting local currency to foreign currency to repatriate earnings. |
| With respect to public M&A, where does your jurisdiction see most deal activity? | Most public M&A deal activity is categorized as mid-market, or below mid-market, however, there is little activity in the public M&A space given the small size of the market and such transactions tend to be several years apart. |
| With respect to public M&A, what sector sees the most deal activity in your jurisdiction? | Not applicable as there is limited public M&A in our jurisdiction. |
| What are your predictions for public M&A deal volume in your jurisdiction during 2024? | Public M&A deal volume in 2024 is predicted to be the same as 2023 deal activity given the complexities involved in public M&A deals and the small size of the market, these transactions are naturally much fewer and further between. |
| Please share any other insights with respect to M&A in your jurisdiction: | M&A deals in Trinidad and Tobago, and more so the region, tend to be cyclical. In prior decades, many of the deals involved acquisitions by Trinidad and Tobago-based companies or groups acquiring entities in the region. While in more recent times there have been a few examples of local entities acquiring entities in the region or beyond, we are beginning to see the pendulum swinging a bit with Jamaican entities looking at acquisitions in Trinidad and Tobago and the region. |
Global M&A Trends Report
Trinidad and Tobago
(Latin America/Caribbean) Firm Hamel-SmithContributors M.Glenn Hamel-Smith
Updated 30 Jan 2024Three things top of mind for private M&A practitioners in Trinidad and Tobago are:
- General: economic environment
- General: political environment
- Regulatory: antitrust
General: economic environment - Inflation coupled with continued low production of oil and gas (the main driver of the economy) continues to dampen the investment climate, although there are recent suggestions that inflation is slowing. Gas shortages that have led to the shutdown of some petrochemical plants and the operation of others below capacity have led to a slowdown in economic activity and a significant reduction in the availability of foreign exchange. The reduced availability of foreign exchange has significantly impacted the commercial sector as a whole, particularly the SME sector.
General: political environment - While General Elections are not due until 2025, the economic conditions, foreign exchange shortages, the relatively high levels of crime, and the challenges in the ease of doing business arena have all combined to make the political atmosphere very charged with both of the main political parties seeming to be constantly in pre-election mode, particularly following the Local Government elections held in 2023 which produced little change to the status quo. Those combinations of factors make it challenging for some business activity although there has been a marked increase of acquisitions led by Jamaica entities in the local and regional market, so for some, it may seem to be a buying opportunity, while for those selling, it provides an exit opportunity.
Regulatory: antitrust - The antitrust (merger control) regime is fairly nascent in the country and captures many transactions given the low thresholds and the fairly broad and encompassing provisions. The Commission has hinted at approaching the legislature with potential amendments to address some of these but these are not expected to be implemented for some time and the timeframe remains somewhat vague and uncertain.
Most private M&A deal activity is categorized as below mid-market.
Most private M&A deal activity is seen in the Financial Services sector.
Private M&A deal activity in 2024 is predicted to be greater than 2023 deal activity, while 2023 had a couple of transactions, there are already a few more in the pipeline for 2024.
While regulatory issues affect public M&A transactions in the same way, they are less likely to give pause to the players in that arena as most of the transactions are still likely to be caught by the legislation and the particular thresholds, whether or not they are varied. While players in the public M&A space are affected by foreign exchange shortages, entities at that level tend to have more resources and other avenues to access foreign exchange than those in the private M&A arena. However, where the private M&A transactions involve external parties, those foreign exchange issues would not be likely to impact in the short term as they inject foreign exchange into the market. However, this can prove to be challenging later down the road where investors may have challenges in readily converting local currency to foreign currency to repatriate earnings.
Most public M&A deal activity is categorized as mid-market, or below mid-market, however, there is little activity in the public M&A space given the small size of the market and such transactions tend to be several years apart.
Not applicable as there is limited public M&A in our jurisdiction.
Public M&A deal volume in 2024 is predicted to be the same as 2023 deal activity given the complexities involved in public M&A deals and the small size of the market, these transactions are naturally much fewer and further between.
M&A deals in Trinidad and Tobago, and more so the region, tend to be cyclical. In prior decades, many of the deals involved acquisitions by Trinidad and Tobago-based companies or groups acquiring entities in the region. While in more recent times there have been a few examples of local entities acquiring entities in the region or beyond, we are beginning to see the pendulum swinging a bit with Jamaican entities looking at acquisitions in Trinidad and Tobago and the region.