BRAZIL Law and Practice Contributed by: Rafael Lacerda, Eric Nahum, Rômulo Martins and Fernando Oliveira, Lacerda Diniz Advogados
• increase of controlling shareholder’s stake – when the controlling shareholder, or an affiliated party, increases its holdings to more than one third of the outstanding shares of any category or class; • delisting – when the company seeks to delist its shares and go private; and • sale of control – upon the transfer of control, the purchaser must launch a tender offer to acquire voting shares held by minority shareholders at a price of no less than 80% of the per-share price paid for the controlling block. Enhanced protections under B3 premium listing seg - ments include: • Novo Mercado – 100% tag-along rights for com - mon shares (ON); and • Nível 2 – 100% tag-along rights for both common (ON) and preferred shares (PN). 7.4 Consideration In Brazil, cash is the most common form of considera - tion in tender offer transactions. The regulatory frame - work emphasises funding certainty and the prevention of abusive conditions. Under CVM Resolution No 85, all tender offers must: • have their financial settlement guaranteed by a licensed financial institution; and • be intermediated by a duly authorised broker or dealer. In control-transfer situations, tag-along tender offers must be priced at no less than 80% of the per-share price paid for the controlling block, pursuant to Article 254-A of the Corporations Law. All OPAs are intermediated by a licensed financial institution and settled through B3, with the necessary guarantees in place. 7.5 Conditions in Takeovers The offer does not depend on the direct or indirect actions of the offeror or its related parties. Permissible conditions generally fall into three categories:
• macroeconomic risks – protect the offeror against systemic disruptions, such as war, banking cri - ses, restrictions on access to funds, or significant adverse changes in market indicators; • regulatory risks – address potential changes in the legal or regulatory framework that could impact the transaction; and • target company risks – relate specifically to the financial and operational situation of the target, typically framed as the absence of a material adverse effect (MAE) reflecting no significant undis - closed deterioration in assets or value. From 1 October 2025, CVM Resolution No 215 will replace Resolution No 85. The new framework prohib - its conditioning tender offers on obligations assumed by the bidder with the financial intermediary, thereby reinforcing funding certainty and equal treatment of shareholders. 7.6 Acquiring Less Than 100% Under Brazilian corporate law, a bidder may obtain effective control of a company by acquiring a major - ity of its voting shares, even without holding 100% of the equity. Control generally grants the right to elect the majority of the board of directors and to direct the company’s strategic decisions. From a governance perspective, control can also be exercised through negotiated arrangements, even without majority ownership. Such arrangements may include rights to appoint one or more board members, veto powers over specific strategic matters, or super - majority requirements for certain corporate actions. The most common squeeze-out mechanism in Bra - zil is through a delisting tender offer (cancellation of registration), which requires acceptance by holders of two thirds of the free float. CVM Resolution No 215 introduces calibrated alter - natives for delisting tender offers in scenarios of very low free float, while maintaining minority shareholder protections. 7.7 Irrevocable Commitments The practice of obtaining irrevocable commitments from controlling shareholders in public takeover trans -
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