CHILE Trends and Developments Contributed by: Luis Felipe Hübner, Diego Marín Ithurbisquy, Felipe Hübner Vadivieso and Valentina Fuentes, UH&C Abogados
2025 Pension Reform and Its Implications for M&A Chile’s 2025 pension reform, which gradually increases employer contributions and opens the pension fund administration market to more competition, is expected to have indirect yet significant effects on M&A activity. The antici - pated influx of capital from higher contributions may enhance institutional investors’ capacity, potentially increasing liquidity for private equity and infrastructure deals. However, the resulting increase in labour costs for companies, particu - larly in labour-intensive industries, could lead to divestitures and restructuring-driven transac - tions. Additionally, the entrance of new competitors into the pension system may encourage con - solidation among existing pension fund adminis - trators (AFP), as firms seek scale advantages to remain competitive. This mirrors developments observed in other jurisdictions where pension reform has triggered consolidation across the financial sector. The long-term effects of the reform will depend on how capital is reallocated and whether com - plementary regulations encourage increased foreign investment in Chile’s financial markets. Investors should monitor these dynamics close - ly, as shifts in capital availability and labour cost structures could reshape M&A strategies in sev - eral key sectors. Looking Ahead: Key M&A Trends for 2025 Chile’s M&A market in 2025 will be shaped by regulatory shifts, economic recovery, sectoral changes and the upcoming presidential and parliamentary elections. As economic and geo - political conditions begin to stabilise, investor confidence is expected to strengthen, particular - ly in high-potential sectors such as technology,
financial services and renewable energy, which continue to attract significant capital inflows. Regulatory scrutiny will remain a critical ele - ment. The Fiscalía Nacional Económica (FNE) is expected to maintain active enforcement of merger control, consistent with global trends toward stricter antitrust oversight. The Economic Crimes Law and the Cybersecurity Framework Law will likely increase compliance burdens, extending due diligence timelines and add - ing complexity to transactions. Meanwhile, the 2025 pension reform may drive consolidation in the pension and broader financial services mar - kets as institutions seek economies of scale to remain competitive. Cross-border M&A is also expected to grow, supported by rising foreign interest in Chilean start-ups and platforms such as ScaleX Santia - go Venture Exchange, which has already facili - tated USD16.77 million in public offerings. In addition, transactions in AI and fintech are likely to dominate deal flow, reinforcing Chile’s emer - gence as a regional leader in technology-driven investment. In response to these evolving dynamics, com - panies engaged in M&A should adopt proactive regulatory strategies, integrate ESG considera - tions, and make use of automated and advanced risk assessment tools to improve transactional outcomes and mitigate unforeseen liabilities. Conclusion Chile’s M&A market enters 2025 with strong foundations for renewed growth. The conver - gence of regulatory modernisation, capital market development and accelerating techno - logical transformation is expected to generate a more dynamic and competitive transactional landscape. Strategic investors are increasingly
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