With the in-person economy all but halted by the Covid-19 pandemic, many of Brazil’s small businesses are expected to perish. Even among major players, the situation is dire — and in this emerging form of corporate Darwinism, only the biggest will survive. In many sectors, companies are unlikely to endure the crisis without significant government help — not only by way of direct financial assistance but also through changing antitrust regulations to allow mergers and acquisitions, according to a major shareholder at Brazil’s leading domestic airline Gol, who spoke to The Brazilian Report.
Analysts expect a marked increase in mergers and acquisitions in the post-pandemic world. A part of this jump will be down to an existing pre-pandemic backlog, as PricewaterhouseCoopers identified 168 such operations pending analysis before many government agencies reduced their operations — a 63-percent increase from the average of the previous five years.
However, the coronavirus will drive these numbers up even further. Many companies are seeing their debts pile up on a weekly basis and may need to merge with their competitors to weather the crisis. Moreover, the devaluation of the Brazilian currency makes local assets cheaper and thus more appealing to foreign players.
Investment analyst Pedro Galdi is gambling on mergers and acquisitions in the banking, infrastructure, aviation, and telecommunications...
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