**London**: Henri Capin-Gally from White & Case discusses how nearshoring, technological advancements, and logistical connectivity are driving M&A in the supply chain sector, particularly with a focus on Mexico, amidst some hesitations due to ongoing disruptions and economic uncertainty.
Henri Capin-Gally, a partner at the law firm White & Case, provided insights into the current trends influencing mergers and acquisitions (M&A) within the supply chain sector, particularly noting the shift towards nearshoring, ongoing disruptions, and advancements in digital technology. According to Capin-Gally, the trend of relocating manufacturing operations from China to Mexico is significantly driving interest in M&A among supply chain providers. This regional shift is largely attributed to the robust logistics infrastructure that connects Mexico and the United States, facilitated by rail lines, ports, and highways.
Speaking to SupplyChainBrain, Capin-Gally observed that despite uncertainties surrounding tariff implementations under the Trump administration, buyers are keen to capitalize on this opportunity. “They see what’s coming,” he stated, highlighting that investors are currently entering the market at lower multiples, anticipating an eventual increase in value. This strategic positioning indicates a forward-looking approach among dealmakers in the sector.
However, Capin-Gally also noted that the multitude of disruptions faced by supply chains over the past five years has led to a degree of hesitation in M&A activities within transportation and logistics. While these disruptions have delayed some transactions, they have not entirely stifled the market. “Most of our clients are viewing this as a great opportunity,” he remarked, suggesting that the overall environment is still conducive to deal-making.
The integration of new technologies in supply chain operations is another significant driver of M&A activity, as companies seek to enhance the capabilities of their acquisition targets. Capin-Gally explained that there is a strong demand for equipping these firms with cutting-edge information and material handling systems necessary for improved efficiency and competitiveness in the market. “There’s a push to sell to companies that have this tech,” he stated, underscoring the importance of technological integration in the sector.
The focus of M&A transactions has been predominantly regional, with a particular emphasis on exploiting the advantages of transportation and manufacturing infrastructures in Mexico. Most of the capital in these deals is directed towards acquiring asset-based transportation and logistics providers, signalling a concentrated effort to enhance operational capabilities in these key areas.
Despite the challenges presented by economic uncertainties, including tariffs and escalating trade tensions, Capin-Gally expressed cautious optimism for future M&A activity within the supply chain sector. “We’re optimistic about the next few years,” he concluded, indicating that the dynamic landscape of supply chains continues to present lucrative opportunities for informed investors.
Source: Noah Wire Services
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