BRAZIL Law and Practice Contributed by: Felipe Barreto Veiga, Rafael Teixeira, Gabriel Abdalla and Pablo Arana, BVA – Barreto Veiga Advogados
11. Activism 11.1 Shareholder Activism
11.3 Interference With Completion Activists may challenge announced transactions, par - ticularly where they believe the consideration is inad - equate, the decision-making process is deficient, or conflicts of interest may be present. However, given Brazil’s concentrated ownership structure and the influence typically exercised by controlling shareholders, activists rarely succeed in preventing transactions that have controller support and are carried out in compliance with applicable cor - porate and securities rules.
Shareholder activism exists in Brazil, but it remains relatively limited, largely due to concentrated own - ership structures and the prevalence of controlling shareholders. Where it arises, activism typically focuses on govern - ance reforms, capital allocation, board composition/ representation and corporate restructuring (including balance sheet and portfolio rationalisation measures). Activists may challenge announced transactions – often by advocating for improved process, pricing or minority protections – but they generally have limited ability to block deals that are supported by control - ling shareholders and conducted in compliance with applicable corporate and securities rules.
11.2 Aims of Activists Activists typically focus on: • governance improvements; • board composition/representation; • capital allocation discipline;
• dividend policy and return-of-capital initiatives; and • corporate restructuring and portfolio optimisation. Encouraging M&A, spin-offs or major divestitures may form part of broader strategic campaigns, particularly where activists view asset sales, carve-outs or combi - nations as catalysts to unlock value or address under - performance.
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