BRAZIL Law and Practice Contributed by: André Menescal Guedes, Raissa Freire de Almeida and Bruno Paiva, André Menescal Advogados
4.4 Consideration and Minimum Price In Brazil, acquisitions of public companies, including those in energy, infrastructure and technology, are predominantly structured as cash transactions. Cash consideration remains the preferred mechanism due to its simplicity, clearer valuation, and investor protec- tion under CVM rules. Stock-for-stock transactions are legally permitted but less common, as they require complex fairness opinions, additional disclosure obli- gations and shareholder approvals, particularly when the acquiring company is not listed in Brazil. Cash payment is permissible in both tender offers and merger-based transactions, though in practice it is used almost exclusively in tender offers or private control transfers. In mergers, consideration can be paid in shares, cash or a combination of both, pro- vided that all shareholders in the same class receive equivalent treatment. Brazilian regulations impose a minimum price require- ment for takeover offers involving control transfers: the price offered to minority shareholders must be at least equal to the highest value paid per share to acquire control within the preceding 12 months. This ensures equal treatment and avoids discriminatory control premiums. In deals involving valuation uncertainty, such as renewable portfolios exposed to curtailment risk or early-stage hydrogen ventures, it is increasingly com- mon to use earn-outs or contingent payment mecha- nisms. These tools align post-closing performance with future regulatory or operational outcomes, par- ticularly where energy dispatch, licensing milestones or carbon-credit monetisation affect long-term value. 4.5 Common Conditions for a Takeover Offer/ Tender Offer Takeover offers in Brazil are subject to strict trans- parency and equal-treatment rules established by the CVM and the B3 Listing Rules. Common condi- tions include regulatory approvals, particularly from CADE and, in the case of infrastructure or concession assets, prior consent from sectoral regulators such as ANEEL, ANTAQ or ANA. Obtaining these clearances is usually a condition precedent to closing, rather than to launching the offer.
or voting arrangements. The tender offer must be addressed to all remaining voting shareholders. In addition to control acquisitions, certain corporate events – such as delisting, cancellation of registration, or changes in corporate purpose that materially affect minority rights – may also trigger mandatory offers under specific CVM regulations. This framework ensures equal treatment and transpar- ency in control transactions and prevents discrimina- tory premiums being paid exclusively to the controlling block. 4.3 Transaction Structures The most common structure for acquiring a public company in Brazil is a tender offer, launched pursuant to the rules of the CVM and the stock exchange (B3). The tender offer allows the acquirer to purchase con- trol or delist the target by offering to acquire shares from all shareholders under equal terms and price conditions. Alternatively, acquisitions can be structured through private share purchases from controlling shareholders, followed by a mandatory tender offer to the minorities. This two-step model remains the market standard in energy and infrastructure, where control blocks are typically concentrated. Although Brazilian law allows mergers, amalgama- tions and incorporations of shares as means of com- bination, these structures are less frequently used for public company acquisitions. The main reasons are procedural complexity, lengthy shareholder and regu- latory approvals, and the requirement for independent valuation reports and fairness opinions. Mergers are therefore more common in intragroup reorganisations or between private entities than in open-market con- trol transfers. Recent practice shows increased use of hybrid struc- tures, in which a tender offer is followed by a merger to simplify post-closing integration. In regulated sectors, prior consent from authorities such as ANEEL or the antitrust authority (CADE) is also necessary, which fur- ther extends timing compared to private acquisitions.
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