BRAZIL Law and Practice Contributed by: André Menescal Guedes, Raissa Freire de Almeida and Bruno Paiva, André Menescal Advogados
The National Defence Council ( Conselho de Defesa Nacional ) may review transactions involving assets located within the border strip, where foreign owner- ship and certain economic activities are restricted. The purpose of this rule is to safeguard territorial integrity and national security interests. There are also sectoral controls. For example, com- panies involved in aerospace, telecommunications, nuclear energy, and port or airport operations may face restrictions on foreign participation or require- ments for prior government authorisation. Invest- ments originating from jurisdictions subject to interna- tional sanctions may trigger enhanced due diligence by banks and regulators. Brazil maintains an export control system governed by the Ministry of Development, Industry, Commerce and Services and the Ministry of Defence. The framework restricts the export and transfer of dual-use goods, defence materials and nuclear technologies, consist- ent with international treaties such as the Nuclear Non-Proliferation Treaty. Although there is no broad national security approval regime, acquisitions in sensitive sectors are monitored closely, and regulators retain discretion to impose conditions or deny licences if national interest con- siderations are at stake. 5.5 Antitrust Regulations Mergers and acquisitions in Brazil, including takeover offers and business combinations, are subject to man- datory pre-merger notification to CADE when certain turnover thresholds are met. A filing is required when, in the preceding fiscal year, one of the economic groups involved had gross rev- enues of at least BRL750 million in Brazil and another group had gross revenues of at least BRL75 million in Brazil. These thresholds are cumulative and apply to the consolidated groups of the buyer and target, not just to the individual entities directly involved in the transaction. Transactions requiring CADE approval include merg- ers, acquisitions of control or minority stakes that con- fer material influence, joint ventures and certain long-
term association agreements. The filing must occur before closing, and completion of the transaction is suspended until clearance is obtained. Implement- ing a deal before approval may result in gun-jumping penalties, including fines and possible transaction annulment. CADE’s review period is typically 30 to 240 days, depending on complexity. Fast-track procedures are available for transactions with no significant horizontal or vertical overlaps. In the energy and infrastructure sectors, CADE often co-ordinates with regulators such as ANEEL or ANTAQ to assess competitive and market access implications. 5.6 Labour Law Regulations Acquirers in Brazil must pay close attention to the country’s labour continuity rules and the high level of worker protection established by the Consolidation of Labour Laws (CLT) and related jurisprudence. In an acquisition, whether through share purchase, merger, or transfer of going concern, all existing employment contracts and labour liabilities automatically transfer to the buyer by operation of law. This principle of suc- cessor liability makes thorough labour due diligence essential. There is no legal requirement for consultation with a works council or similar body prior to a business com- bination, as Brazil does not have works councils in the European sense. However, labour unions play an active role in collective bargaining and may need to be informed or consulted when a transaction entails operational changes, workforce restructuring or inte- gration of collective agreements. Union consultation is generally not binding, but main- taining dialogue helps mitigate reputational and indus- trial relations risks. Certain collective agreements in regulated sectors, such as oil and gas or power gen- eration, may impose specific notice periods or nego- tiation procedures before implementing structural changes. Disclosure of labour information during due diligence must comply with data protection rules under the General Data Protection Law (Law No. 13,709/2018),
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