By Aline Bronzati and Altamiro Silva Junior
The recovery in mergers and acquisitions (M&A) in the United States in recent weeks should spread to other markets, including Brazil, according to experts. Although large deals are happening, in 2022 the pace of deals in the Brazilian market has been weaker than expected, with some companies waiting for less fiscal and political uncertainty after the elections before moving forward with buy or sell talks.
Data from S&P Global Market Intelligence, at the request of Estadão/Broadcast, show that transactions announced in Brazil so far in August total US$ 1.74 billion, almost R$ 9 billion. The volume is lower than that of July, which totaled US$ 2.24 billion or R$ 11.4 billion. However, it is already approaching June’s figure of US$ 1.83 billion, or more than R$ 9.3 billion.
In terms of number of deals, however, August is still more subdued in Brazil, just as in the US. So far, there have been 17 transactions compared to 40 in June and 53 in July, according to S&P Global Market Intelligence.
“The M&A recovery starts in the US but spreads to other countries. When American capital returns to buying, it targets not only the United States but the rest of the world as well,” says Carlos Lobo, partner at the North American law firm Hughes Hubbard & Reed LLP.
According to him, how quickly the “North American phenomenon” reaches other countries will depend on local circumstances. In Brazil, for example, the presidential elections in October generate uncertainty, he notes. On the other hand, the country is already seeing inflation fall, and the monetary tightening cycle is nearing its end.
“Brazil can benefit from the movement in the United States, as can Latin America,” says Lobo, in an interview with Broadcast.
In Brazil, data from Kroll show that the M&As announced in July fell 17% compared to the same month last year, the sixth consecutive monthly decline. In the first half, 735 transactions were announced, compared to 752 in the same period of 2021.
Source: Estadão