BRAZIL Law and Practice Contributed by: André Menescal Guedes, Raissa Freire de Almeida and Bruno Paiva, André Menescal Advogados
4. Acquisitions of Public (Exchange- Listed) Energy and Infrastructure Companies 4.1 Stakebuilding It is relatively common in Brazil for investors to acquire a minority stake in a public company before making a formal takeover offer, especially in sectors such as energy, logistics and infrastructure, where listed vehi- cles control regulated or concession-based assets. This strategy allows investors to gain market familiar- ity, signal long-term commitment and facilitate subse- quent negotiations with controlling shareholders. Under Brazilian Securities Commission (CVM) regula- tion, any investor whose ownership reaches, exceeds or falls below 5% of the voting or total capital of a listed company must immediately notify both the issuer and the CVM. The disclosure must specify the purpose of the investment, indicating whether the acquirer intends to alter control, seek board repre- sentation or increase its position. There is no formal “put up or shut up” regime requir- ing an investor to make or withdraw a proposal within a defined period. However, insider trading and mar- ket manipulation rules are strictly enforced, and any accumulation of shares must be consistent with public disclosures and insider-information restrictions. Stakebuilding is therefore a legitimate preliminary step towards control acquisitions, but it is tightly monitored by the securities regulator. If the investor subsequent- ly crosses the control threshold, a mandatory tender offer obligation may arise, ensuring equal treatment Under Brazilian securities law, a mandatory tender offer ( oferta pública de aquisição – OPA) is required whenever an investor acquires control of a publicly traded company. Control is presumed when the buy- er obtains rights that allow it to elect the majority of the board of directors or determine corporate poli- cies, regardless of the exact ownership percentage. In practice, this often corresponds to a shareholding above 50% of the voting capital, but control can also be established through shareholders’ agreements for minority shareholders. 4.2 Mandatory Offer
Corporate approvals, balance sheets no older than 120 days, and registration with the Commercial Reg- istry are required. In regulated sectors, prior authori- sation from agencies such as ANEEL, ANTAQ or ANA may also be necessary before completion. Antitrust analysis may also be applicable. When properly structured and substantiated, this sequence can efficiently separate risks and unlock value while maintaining compliance with tax and cor- porate regulations. 3.4 Timing and Tax Authority Ruling A typical spin-off in Brazil takes between three and six months to complete, depending on the complexity of the corporate structure, the number of stakehold- ers involved, and the regulatory sector. The process begins with the preparation of interim balance sheets and supporting valuations, followed by shareholder approvals and filings with the Commercial Registry and, where applicable, regulatory agencies such as ANEEL or ANTAQ. There is no legal requirement to obtain a prior ruling from the Brazilian tax authority to execute a spin-off. However, taxpayers must ensure that the transaction complies with the legal and accounting conditions for tax neutrality, including the transfer of assets and liabilities at book value and the preservation of owner- ship proportionality among shareholders. Although advance rulings are not mandatory, compa- nies may seek formal consultations from the Receita Federal to confirm the tax treatment of specific struc- tures. These consultations are optional and typically take six to 12 months for a response, depending on the complexity of the matter. In practice, most corporate groups proceed without a ruling, provided that the transaction has a demonstra- ble business purpose, is properly documented, and does not involve revaluation or distribution of assets that could trigger taxation.
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