BRAZIL LAW AND PRACTICE Contributed by: Alan Campos Elias Thomaz, Juliana Sene Ikeda, Ricardo Barretto Ferreira da Silva and Camila Sabino Del Sasso, Campos Thomaz Advogados
erations. The most common structures include share/ asset purchases, mergers and joint ventures. Share purchases are the predominant method for private company acquisitions. They allow continuity of operations, contracts and licences but transfer all existing liabilities, including tax, labour and environ - mental obligations. Asset purchases are used when buyers want to avoid assuming historical liabilities, but they can involve multiple registrations, consents and taxes. Mergers or corporate reorganisations are typically used for group restructuring or consolidation. Joint ventures or strategic partnerships are widely used in regulated or strategic sectors, allowing risk- sharing, compliance with ownership restrictions and access to local expertise. For public company acquisitions, transactions are highly regulated under Brazilian Corporation Law (Law No 6,404/1976) and the Brazilian Securities and Exchange Commission ( Comissão de Valores Mobil- iários CVM) rules. Common methods include tender offers, market purchases or mergers, with manda - tory offers required when acquiring control. Private company deals are more flexible, governed mainly by contractual arrangements, with a focus on representa - tions, warranties and indemnities. Key considerations for foreign investors include obtaining regulatory approvals, assessing tax impli - cations (capital gains, withholding and transfer taxes), evaluating liability exposure, complying with BACEN registration requirements, and structuring corporate governance and exit strategies. Minority investments are usually made via new share subscriptions or capital increases, supported by shareholders’ agreements granting veto and infor - mation rights. Control acquisitions, in contrast, gen - erally involve majority share purchases or mergers, potentially triggering Administrative Council for Eco - nomic Defence ( Conselho Administrativo de Defesa Econômica , or CADE) antitrust review and sector- specific approvals. Overall, share purchases dominate private transac - tions, tender offers and mergers dominate public deals, and joint ventures or minority stakes are pre -
ferred for entry into regulated sectors or gradual mar - ket participation. Structure selection is driven by the desired level of control, risk allocation, tax efficiency and regulatory compliance. 3.2 Regulation of Domestic M&A Transactions Mergers and acquisitions in Brazil are subject to man - datory notification to the CADE, when they meet cer - tain thresholds established by Law No 12,529/2011. CADE is an agency linked to the Ministry of Justice and Public Security ( Ministério da Justiça e Segurança Pública , or MJSP). The notification requirement applies to transactions involving mergers, acquisitions of control or significant shareholdings, and the establishment of joint ventures or consortia with permanent effects on the market. Notification is required when, in the year preceding the transaction, at least one of the parties involved had annual gross revenues of BRL750 million or more in Brazil, while the other party had revenues of BRL75 million or more within the country. Market share is not a criterion for mandatory notification, although it is considered when analysing the operation. Transactions must be notified and approved before completion, and consummation without prior approv - al may result in fines and eventual annulment of the transaction. The main objective is to prevent exces - sive market concentration and ensure free and fair in the Brazilian market. 4. Corporate Governance and Disclosure/Reporting 4.1 Corporate Governance Framework Brazilian corporate governance is primarily governed by the Civil Code, the Corporation Law – as amended – and CVM regulations. The framework emphasises transparency, accountability and the protection of minority shareholders. The two main corporate forms are the limited liability company ( sociedade limitada Ltda), typically used for private companies, and the corporation ( sociedade anônima SA), commonly used for public companies.
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