Understand the Current Mergers and Acquisitions Market and Expectations for 2021
As we discussed in our article, the mergers and acquisitions (M&A) process goes beyond just a company being bought or sold. There are several stages and processes to be completed in order to understand the exact position in relation to the processes, the challenges to be faced, and how the market is functioning.
Previously, political turbulence and the worsening of the pandemic led foreign investors to avoid the Brazilian stock market. However, with the vaccination phase finally underway in the country, and its pace constantly accelerating, companies have turned their attention back to Brazil.
>Also read: LGPD: Key Recommendations
Mergers and Acquisitions: The Recovering Market
In the first half of 2021, the volume of mergers and acquisitions (M&A) processes grew eight times compared to the same period in 2020. Sectors such as retail, which were heavily impacted by the pandemic, are now among the most active in business transactions.
With Brazil’s recovery and the increase in consumption, the economic outlook is becoming increasingly optimistic. Bankers expect M&A activities to remain strong in the second half of the year, with retail continuing to stand out.
Brazilian Companies
With the growing M&A market, it is recommended that companies use their cash reserves to invest in scaling up and strengthening their digital presence. This strategy will help attract competitors with significant merger or acquisition offers.
>> Learn How to Attract Investors According to the Largest Investment Funds in the Country
Brazilian companies are already closing excellent mergers and acquisitions deals. For example, in acquisitions, we have the purchase of Hering by Grupo Soma, and in mergers, the union of Hapvida and NotreDame Intermédica.
However, the largest Brazilian stock offering took place on June 30th: Petrobras sold its stake in the fuel distributor BR Distribuidora for 11.36 billion reais.
