Mergers and Acquisitions in Brazil: Current Overview and 2025 Outlook
Franklin Tomich
Founder and CEO - FT Aquisi??es, Prof. MBA na PUC e Founder Accordia
The Brazilian mergers and acquisitions (M&A) market has shown strong recovery in 2024, with significant growth in strategic sectors such as technology, energy, and infrastructure. In the first half of the year alone, there were 776 transactions, representing a 5.3% increase over the same period in 2023. This momentum has attracted the interest of international investors, particularly from the United States and Canada, who are looking to diversify their portfolios in emerging markets with high growth potential.
1. Stability and Favorable Regulations
The Brazilian regulatory environment has become increasingly supportive of investment and acquisitions. Law No. 14,711, known as the Legal Framework for Guarantees, was enacted in October 2023 and sets guidelines for the use of guarantees in financial and credit transactions in Brazil. This framework allows fiduciary agents to manage and execute assets offered as collateral, providing greater legal security in M&A transactions. Additionally, the law eliminates income tax on earnings from Private Equity Investment Funds (FIP), which boosts foreign capital attractiveness by reducing tax costs and increasing liquidity.
These regulatory changes make Brazil even more attractive to investors in capital-intensive sectors like infrastructure, technology, and healthcare. Moreover, new infrastructure bonds have been driving the financing of strategic projects, further fostering mergers and acquisitions in key areas for Brazil's economic growth.
2. Key Sectors and Quantitative Data
Technology has been the top sector in 2024, leading transaction volume due to high demand for artificial intelligence and digitalization. For example, in the first half of 2023, the IT sector accounted for over 50% of all transactions, with 103 deals completed in the second quarter alone. The Technology, Media, and Telecommunications sector reached a total of 368 M&A deals in the first half, representing 50% of all transactions. The internet sector, with 76 deals closed, and telecommunications and media, with 11 deals, are also prominent players in Brazil’s M&A landscape.
In the first six months of 2024, of the 776 transactions completed, 60% were domestic transactions, while 28% involved foreign acquisitions of local companies, encouraged by the currency devaluation. This environment has made Brazilian acquisitions more attractive in dollar terms, while Brazilian companies, often financially pressured, seek capital amid a high-interest rate environment. This context has created a favorable landscape for “opportunity deals,” where liquid buyers can find attractive undervalued assets.
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3. Outlook for 2025
For 2025, expectations remain high for continued growth in M&A activity in Brazil. The Brazilian market offers a strategic opportunity for foreign companies seeking expansion, especially as global supply chains regain strength and the need for local suppliers rises. The adoption of advanced technologies and digitalization will further boost transactions in the IT sector, while infrastructure and renewable energy will continue to attract investors due to growth potential and ESG (environmental, social, and governance) focus.
Additionally, projections suggest that Brazil could reach 1,500 transactions by the end of 2024, setting a record driven by stability and regulatory modernization. This landscape strengthens Brazil’s role as a key destination for investors seeking emerging markets with high growth and innovation potential.
Author: Franklin Tomich, Financial Advisor and M&A Specialist with over 15 years of experience. Founder of FT Aquisi??es, an M&A consulting firm, and MBA professor in M&A Finance. Holds a Master’s in Finance and is a specialist in AI applied to financial analysis and corporate bankruptcy prediction.
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