COLOMBIA Trends and Developments Contributed by: Jaime Trujillo and Natalia Ponce de León, Baker McKenzie
The Colombian M&A sector continues to face a chal - lenging economic and political environment. During 2025, the number of deals declined compared to prior years, with 7% fewer transactions than in 2024, according to Transactional Track Record, reflecting a more selective market and increased execution risk. Aggregate deal value for 2025 was also 18% lower than in 2024. Still, Colombia remained in third place in terms of transaction value in Latin America. The country has been affected by major global fac - tors such as still‑restrictive (although gradually easing) interest‑rate conditions, ongoing geopolitical events disrupting supply chains and the increased empower - ment of regulatory authorities in countries where deals originate, as well as local factors such as the region’s uneven economic recovery, the adoption of populist policies, continued regulatory reform efforts and the proximity of the 2026 electoral cycle. At local level, deal activity is still being hurt by an ele - vated country‑risk perception, higher taxation rates, the current administration’s generally adversarial stance towards the private sector and its mixed and sometimes inconsistent signals in critical sectors such as infrastructure, energy, utilities and healthcare – all of which have sustained a degree of unpredictability in the business environment. That said, the country’s system of checks and bal - ances has again proven resilient. With the current administration set to end in 2026, several of its more far‑reaching proposals have either failed to materialise or have been significantly moderated through legisla - tive and judicial review. This, together with structural attributes such as Colombia’s geographical location, demographic profile and the depth and quality of its human capital, has supported a cautiously construc - tive investor outlook on the country’s medium‑ and long‑term prospects. Trends by Geographical Footprint In recent years, and increasingly throughout 2025, there has been a noticeable shift in M&A transac - tions towards targets with regional, multi‑jurisdiction - al operations. Investors are looking for companies that offer regional scale and maintain a presence beyond Colombia. This trend has been particularly
evident in sectors such as energy, telecommunica - tions and healthcare, where Colombian companies have expanded their operations across the Andean Region, Central America and, in some cases, Mexico. Colombian companies with a demonstrable track record of regional expansion remain particularly attractive to investors. These platforms offer the ability to obtain immediate exposure to multiple jurisdictions while leveraging operational and commercial syner - gies. The focus on regional scale reflects a broader strategic approach by investors seeking to diversify risk and reduce exposure to country‑specific volatil - ity by backing businesses with a broader geographic footprint. Trends by Investor Type Strategic investors have remained at the forefront of (albeit still selective) M&A activity in Colombia through 2025. These investors tend to be more resil - ient in the face of short‑term macroeconomic volatil - ity, given their longer investment horizons and stra - tegic rationale for acquisitions. Unlike many financial sponsors, who remain sensitive to financing costs and exit uncertainty, strategic buyers have focused on long‑term positioning, market consolidation and portfolio optimisation. They also continue to benefit from stronger balance sheets and more stable access to financing, which allows them to execute transac - tions even in a constrained credit environment. Large multinational private equity funds and other global financial investors have generally adapted to the new market conditions; the purely local private equity industry, by contrast, has remained under pres - sure, primarily due to fundraising constraints, tighter leverage availability and more limited exit alternatives. The dominance of strategic investors has also resulted in heightened antitrust and regulatory scrutiny. Com - petition authorities have adopted a more intervention - ist stance, which has extended review timelines and increased the use of carve‑outs, conditional approvals and behavioural remedies as tools to address poten - tial competition concerns.
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