BRAZIL Law and Practice Contributed by: André Menescal Guedes, Raissa Freire de Almeida and Bruno Paiva, André Menescal Advogados
steps. If a competing offer is announced, the timetable can be extended to allow shareholders to compare alternatives. In practice, the revised timetable and final auction occur on harmonised terms to ensure an orderly process and equal access to improved bids. 4.14 Timing of the Takeover Offer A takeover or tender offer in Brazil may be extend- ed if regulatory or antitrust approvals have not been obtained before the expiry of the offer period. Under CVM rules, the bidder may request an extension of the acceptance period or postpone settlement to accom- modate pending approvals, provided that the exten- sion is duly disclosed to the market and all sharehold- ers are treated equally. The extension must have a justified purpose and cannot alter the economic terms of the offer. In practice, most bidders seek to obtain regulatory and antitrust approvals after announcing but before launching the offer. Approvals from authorities such as CADE and sector regulators like ANEEL or ANTAQ are often filed in parallel with the preparation of tender documentation. Launching the offer before approvals are granted is possible but requires clear disclosure that completion is conditional upon such authorisa- tions. This sequencing ensures transparency while preserv- ing deal certainty. Market practice favours completing all material regulatory reviews prior to settlement to minimise execution risk and avoid post-offer chal- lenges. Overall, extensions are permissible but tightly controlled to maintain predictability and investor con- Privately held companies in Brazil are typically acquired through share purchase agreements or, less commonly, mergers and incorporations governed by the Brazilian Civil Code and Corporate Law. The transaction structure depends on the company’s size, its regulatory exposure, and whether it operates in a concession-based or strategic sector such as energy, logistics or sanitation. fidence in the public M&A process. 4.15 Privately Held Companies In most cases, acquisitions are negotiated directly between shareholders and the buyer, with compre-
hensive due diligence covering corporate, tax, envi- ronmental, labour and regulatory aspects. In regulated industries – such as electricity, ports, or water and waste management – prior consent from sectoral authorities (eg, ANEEL, ANTAQ or ANA) is required before closing. Purchase price mechanisms often include earn-outs, price adjustments and escrow arrangements to man- age post-closing risks. Representations and war- ranties are broader than in public transactions and typically backed by indemnities, insurance or retention accounts. Foreign buyers must also consider foreign invest- ment registration with the Central Bank (through the Electronic Declaratory Registry of Foreign Direct Investment (RDE-IED) system) and potential currency exchange restrictions on remittances. Tax structuring is another key consideration, as share acquisitions may be subject to capital gains tax, while asset deals can trigger VAT and transfer taxes. Overall, private M&A in Brazil remains highly contrac- tual, with negotiations focusing on risk allocation, regulatory compliance and post-closing integration in sectors with complex licensing and concession obligations. 5. Overview of Regulatory Requirements 5.1 Regulations Applicable to Energy and Infrastructure Companies Setting up and operating a company in Brazil’s energy and infrastructure sectors is subject to extensive regu- latory oversight, varying by subsector and the nature of the activity. Each segment – generation, transmis- sion, sanitation, logistics or ports – requires specific authorisations and licences from federal and state authorities before operations can commence. In the electric power sector, new companies must obtain authorisation from the National Electric Energy Agency (ANEEL) for generation, transmission or distri- bution activities, in addition to environmental licences issued by state agencies such as SEMACE or IBAMA.
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