BRAZIL Trends and Developments Contributed by: Mauro Cesar Leschziner and Diana Pacifico Henne, Machado Meyer
Machado Meyer Av. Brigadeiro Faria Lima 3200 5th floor, 01453-050 São Paulo, SP Brazil Tel: +55 113150 7481 Email: dhenne@machadomeyer.com.br Web: www.machadomeyer.com.br
Introduction In 2024, Brazil saw an increase in M&A trans - actions, with 1,426 announced deals, a rise of 1.9% when compared with 2023, as reported by the Brazil Transactions Insights – Winter 2025 issued by Kroll. This rise was mainly led by the technology, energy and infrastructure, healthcare and agribusiness sectors. Brazilian investors were involved in 82.3% of the M&A transactions in 2024, while foreign investors were present in only 17.7%. Most of the M&A deals in 2024 were driven by strategic reasons, with strategic investors representing 63.5% and financial players only 36.5%. Although 2024 has already shown a reaction in relation to the numbers of M&A transactions of the previous year, the numbers are still far from the historical levels of 2021 and 2022. The decrease in relation to the post-pandemic years, however, should not be viewed with pessimism, as the 2024 figures were higher than the pre- pandemic period and market specialists fore - see good opportunity for the M&A landscape in 2025. This article provides a brief summary of the key trends regarding M&A transactions in Brazil in 2025, including with respect to economic and
market conditions, Brazilian tax reform, artificial intelligence and other legal aspects of the mar - ket. Economic and Market Conditions Brazil’s economic environment is an important factor that affects M&A activity. Brazil’s inflation rate in 2024 was 4.83%, which was the high - est since 2022 and also higher than the govern - ment’s target of 3%. As a response, the Brazilian Central Bank has increased the basic interest rate (the Selic Rate) to 12.25%, affecting the cost of debt and of deal structuring. Additionally, the end of 2024 was marked by a significant depreciation of the Brazilian real against the US dollar, impacting foreign invest - ment and cross-border transactions. Although currency depreciation can make acquisitions more attractive for international players, as Bra - zilian assets become more affordable for foreign investors, it also increases concerns regarding repatriation of funds and cost of debt. In 2024, according to ABVCAP (the Brazilian Private Equity and Venture Capital Associa - tion), private equity investments in Brazil fell to their lowest level of the past five years. Brazil - ian economic and market conditions have also
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