This is one of the conclusions of the first Global LATAM report from ICEX-Invest in Spain, which focuses specifically on Mexico
Spain has become the main gateway for Latin American companies into the European market. It is one of the prime destinations for Latin American investment, surpassed only by the United States outside the region.
This is one of the conclusions of the Global LATAM-Mexico report compiled by ICEX-Invest in Spain with the support of the General Ibero-American Secretariat, which was presented this Wednesday in Casa América in the seminar entitled “Toward a new reality in the internationalization of Latin American companies”. The aim of the report, which will be published annually, is to analyze the new trends in the internationalization of companies and Latin American capital. The next country to be analyzed is Brazil.
Latin American FDI in Spain is 39.49 billion euros (rising to 57 billion euros if we include the investments in holding companies or ETVEs (entities holding foreign securities)), 168 greenfield projects and over 100 shareholding transactions.
During the inauguration, María Peña, CEO of ICEX, shown in the photo, highlighted that “in recent years we have seen a consolidation of the internationalization of Latin American companies. The number of companies with foreign investments has multiplied, and come from countries beyond the traditional issuers of FDI like Brazil, Mexico and Chile. Their transactions also cover practically all activity sectors”, she added.
For its part, Mexico, with an accumulated 29.59 billion euros, is the largest Latin American investor in Spain, and the fifth largest investor worldwide, ahead of European countries such as Germany or the Netherlands.
Latin American investment in Spain is headed by Mexican companies, and comprises a multitude of firms operating across the whole range of economic sectors. This two-way investment relationship between Spain and Latin America thus appears to have moved past its unidirectional stage the one way phase after the arrival of the Spanish multinationals in the region; the number of Latin American companies investing in Spain is now increasing and beginning to form an important part of the Spanish productive fabric. Moreover, an ever greater number of internationalized companies are service SMEs, technology firms or private equity funds investing at the global level.
Mexico, an investment explosion in the last decade
Mexico is the focus of the first issue of a series of six reports by Global LATAM. The boom in Latin American investments abroad is a very recent phenomenon. Mexican FDI abroad is currently 22 times greater than in 2000, with a total of 180.06 billion dollars, having significantly outstripped the worldwide investment rate in recent years.
The internationalization of Mexican companies is the result of Mexico's opening up in the last decades – particularly after the signing of the TCLAN in 1994 – and of the firms' need to expand in order to develop a competitive advantage.
It is also worth noting that Mexican companies have a very high geographic concentration in terms of destination countries. Between seven and eight out of every ten dollars of foreign investment go to their natural market, that is, the Latin American region itself, and the United States.
Mexico has large corporations that are highly internationalized in primary sectors such as food (Bimbo, Gruma, Sigma) and raw materials (Pemex, Cemex, Grupo México); also in the services sector (América Móvil, Grupo Elektra and Cinépolis), which has seen a proliferation of investment transactions in recent years.
Global LATAM Foreign Investment Series
GLOBAL LATAM is an initiative by ICEX Spain Trade and Investment, a Spanish public entity whose mission is to promote the internationalization of Spanish companies and attract foreign investment, and is part of its objective of identifying and supporting Latin American companies interested in investing in Spain.
The project is supported by the General Ibero-American Secretariat (SEGIB), an international body dedicated to building and reinforcing economic and commercial links among the 22 countries in the Ibero-American community.
This first issue was produced with the collaboration of the Emerging Market Institute (EMI) at Cornell University, the Mexican Business Council for Foreign Trade, Investment and Technology, the Mexican Institute for Competitiveness (IMCO) and ProMéxico.
• Mexico is the first in a series of Global LATAM reports that will analyze Latin American investment in six issues. With a total of 29.59 billion euros, Mexico is the number one Latin American investor in Spain
Last updated: 31|01|2019