BRAZIL Law and Practice Contributed by: André Menescal Guedes, Raissa Freire de Almeida and Bruno Paiva, André Menescal Advogados
decisions of third parties, the company is required to publish a market notice once negotiations reach a material stage. The board of directors plays a central role in deter- mining the permissible level of due diligence. It must balance transparency with the duty to protect cor- porate interests and confidential data. Typically, the board authorises a structured process with virtual data rooms, staged disclosure and pre-defined Q&A procedures. In regulated sectors such as energy and infrastructure, additional care is taken to ensure that concession contracts, regulatory filings and envi- ronmental licences are disclosed in compliance with agency confidentiality obligations. 7.2 Restrictions While due diligence is a standard step in Brazilian M&A transactions, several legal and regulatory limits apply, particularly in the energy and infrastructure sec- tors. These restrictions aim to protect confidentiality, personal data, and public-interest information associ- ated with concessions and regulated activities. The main limitation arises from CVM Resolution No. 44/2021, which prohibits the selective disclosure of material non-public information. Public companies may only share such information under confidentiality agreements and for legitimate negotiation purposes. If the disclosure becomes material to market valuation, the company must immediately inform the market through a public notice. In regulated sectors, due diligence involving conces- sion agreements, grid data or operational reports must comply with the rules of agencies such as ANEEL, ANTAQ or ANA. Certain documents classified as stra- tegic or sensitive to national infrastructure cannot be fully disclosed without prior authorisation. Additionally, Brazil’s General Data Protection Law restricts the handling of personal data during due diligence, requiring that information about employ- ees, customers or suppliers be shared only for clearly defined transaction purposes and under secure data- management protocols.
Environmental, tax and labour files are generally accessible but may require formal powers of attor- ney or consent from the target company. Overall, the approach in Brazil balances investor transparency with regulatory confidentiality, ensuring that diligence does not compromise public-service integrity or mar- ket fairness.
8. Disclosure 8.1 Making a Bid Public
In Brazil, a bid for a public company must be disclosed immediately after the decision to proceed becomes material. Under CVM Resolution No. 44/2021, the bid- der and the target company are both responsible for ensuring timely and accurate disclosure of information that could influence investor decisions or affect the trading price of securities. The obligation to make the offer public arises once (i) the bidder’s management or board formally author- ises the transaction, (ii) negotiations reach a defini- tive stage, or (iii) market rumours or abnormal trad- ing activity indicate that inside information may have leaked. In such cases, the bidder or the target must issue a material fact notice ( fato relevante ) through the CVM and B3 platforms, describing the nature of the offer, the parties involved and the expected next steps. The detailed terms of the tender offer (OPA) must then be published in the official notice of the offer, which includes the offer price, timetable, conditions and settlement procedures. From that moment, trading in the target’s shares remains subject to disclosure and blackout rules to ensure fairness and avoid insider trading. In summary, the guiding principle is market symme- try: once the intent or structure of the transaction is capable of influencing investor behaviour, disclosure becomes mandatory and must occur through formal regulatory channels. 8.2 Prospectus Requirements In Brazil, when a stock-for-stock takeover offer or business combination involves the issuance of new
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