TTR In The Press

Business News Americas / BN Americas

Maio 2020

M&As in Brazil: What the numbers tell us so far

Brazil saw 60 mergers and acquisition deals in April, half the number in April 2019, reinforcing a downward trend begun in March when COVID-19 erupted, according to a new report by M&A research firm Transactional Track Record (TTR).

Between January and April, the platform mapped 316 transactions in the country, down 29% over the same period 2019, for a total amount of 41.8bn reais (about US$7bn), 52% lower year-on-year.

But according to PwC, there was an increase in transactions in Q1. The first quarter registered 222 deals, 36% higher than the average of the last five years (163 transactions), and up 28% in relation to the same period last year, said the consultancy.

In March, while under the effect of the pandemic, the number was flat at 54 transactions.

PwC data, however, shows that the M&A appetite has grown much more among local investors, while acquisitions of Brazilian companies by international buyers have slowed.

Between January and March, PwC says there was 42% year-over-year growth in domestic-only transactions to 167 (78% of the quarter’s total), whereas those involving international investors grew by 4%.  

"Brazil’s transactional market is also beginning to stabilize, with deal volumes down dramatically over 2019, but plenty of activity keeping advisors occupied as they continue to isolate themselves in home offices," TTR wrote in its Brazil report.

TECH REIGNS

The technology sector continues to lead consolidation, with 76 transactions year to date, according to TTR, down 25%. Next comes the financial/insurance sector, with 38 deals (down 38%) and real estate with 35 (down 24%). 

With a 4% increase in transactions, healthcare and hygiene comes fourth with 34 deals.

PwC records 69 IT sector transactions in Q1, an increase of 23% over the same period 2019, and accounting for 33% of all deals in the period.

According to consultancy Duff & Phelps, cited by daily O Estado de S. Paulo, the M&A market in Brazil is expected to fall by half in 2020 due to COVID-19 effects. 

Until 2018, there were around 750 transactions per year, jumping to 1,050 in 2019 and the expectation was to reach 1,350 transactions in 2020. Now the forecast is 750 or less.

The consultancy expects a pick-up in the second half, with the resumption of privatizations and concessions.


Source: Business News Americas / BN Americas - Chile 


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