BRAZIL Law and Practice Contributed by: Vitor Henriques and Gabriela Sella, Franco Leutewiler Henriques Advogados
1. Trends 1.1 M&A Market
reflecting the search for sustainable and innova - tive solutions. 1.3 Key Industries In 2024, the Brazilian M&A market remained robust, with key sectors such as agribusiness, healthcare, energy and technology driving the significant activity. Agribusiness continued to be a cornerstone of the Brazilian economy, attract - ing investment due to Brazil’s position as a glob - al agricultural powerhouse and the increasing demand for sustainable practices. The health - care sector also saw increased M&A activity, driven by an aging population and the demand for innovative healthcare solutions, particularly in biotechnology and digital health. The renewable energy sector, especially wind power and green energy, experienced strong growth, supported by government incentives and global sustainability goals. The technology sector also flourished as Brazil’s digital econo - my expanded, with significant deals in fintech, e-commerce and artificial intelligence. On the other hand, the consumer goods sector faced challenges due to rising inflation and interest rates, which slowed M&A activity in this space. Overall, the Brazilian M&A market in 2024 was shaped by both ongoing growth in key sectors and some sector-specific challenges. 2. Overview of Regulatory Field 2.1 Acquiring a Company The first step is a preliminary analysis of the tar - get numbers, business and general concerns. Upon the purchaser declaring interest in the acquisition and the parties executing preliminary instruments, it is recommended to conduct due diligence on the target in order to assess poten -
In 2024, the Brazilian M&A market demonstrated resilience despite economic challenges. While Brazil’s GDP growth exceeded initial expecta - tions, the market faced headwinds due to a con - tinued rise in interest rates. The Central Bank’s decision to increase the SELIC rate as a measure to combat inflation created a more challenging financing environment, leading to a cautious approach by investors and companies consid - ering new M&A transactions. However, despite the higher cost of capital, there were still notable opportunities in strategic sec - tors which attracted attention due to their long- term growth potential and alignment with global sustainability trends. The approval of the wide tax reform, which aims to simplify the tax system and enhance Brazil’s competitiveness, also con - tributed to a more favourable outlook for M&A activity over the coming years. The global geopolitical climate, including the most recent rising protectionism in the US, and ongoing trade tensions between the US and Chi - na, presented Brazil with unique opportunities to attract foreign investments. As a result, while the M&A market faced some near-term challenges due to higher interest rates, there remains an optimistic outlook for strategic sectors. 1.2 Key Trends Brazil is the main agribusiness player in the world, with many M&A and corporate transac - tions taking place in this sector. While other sta - ble business sectors have attracted investment focus over the past 12 months (including health, real estate, technology and food), other sectors such as sanitation, green energy and biotechnol - ogy have emerged as new investment frontiers,
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