Mexican Companies Expand Abroad Amid Domestic Uncertainty
Date
9/13/2024 8:37:27 AM
(MENAFN- The Rio Times) Mexican companies are increasingly looking to diversify their operations internationally, with recent announcements of foreign investments and acquisitions.
This trend comes as businesses seek growth opportunities outside their home market. In less than a week, three major Mexican firms-Grupo Bimbo, América Móvil , and El Puerto de Liverpool-revealed plans for potential acquisitions abroad.
These moves aim to strengthen their presence in markets like Brazil, Chile, and the United States. Grupo Bimbo, a leading bakery company, signed an agreement to acquire Wickbold in Brazil.
This deal includes the Wickbold and Seven Boys brands, as well as four production plants. While the acquisition price was not disclosed, analysts estimate it could be worth $880 million to $1.18 billion.
América Móvil announced a non-binding agreement to explore acquiring assets from WOM, a telecom company, in bankruptcy proceedings in the U.S. WOM has 6.6 million subscribers in Colombia and 5.7 million in Chile.
Meanwhile, Liverpool proposed increasing its stake in US retailer Nordstrom from 9.6% to 49.9%. The Mexican department store chain plans to invest about $1.2 billion in this transaction.
International Expansion Amid Domestic Challenges
These international expansion efforts come as Mexico faces some domestic challenges. Recent judicial reforms have created uncertainty for businesses and investors.
In August, Morgan Stanley recommended reducing investment in Mexican stocks due to political risks. However, analysts note that Mexican companies have long found foreign markets attractive for diversification.
Many already have significant international operations, particularly in the U.S., Europe, and Latin America. The trend also reflects companies' strategies to boost growth and reduce reliance on the Mexican market.
By expanding abroad, these firms can tap into new consumer bases and potentially offset any domestic headwinds. As Mexican businesses continue to look outward, their international footprints are likely to grow.
In short, this could reshape the competitive landscape both at home and in their target markets abroad.
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