Economy

Economic unrest is fueling Brazil’s M&A market in 2022

High interest rates and the global slowdown are prompting companies to seek financial discipline and delay IPOs and follow-ons. For well-capitalized Brazilian companies, however, it's time to go shopping

m&a deals
Photo: 3rdtimeluckystudio/Shutterstock

Despite high benchmark interest rates and increased investor caution in times of economic unrest, well-capitalized companies and funds are poised to make 2022 another record-breaking year for mergers and acquisitions in Brazil. 

Data from PwC tabulates a total of 807 deals announced in the first six months of the year, more than the same period in 2021, which currently holds Brazil’s M&A record. 

For startups, it could be an ideal moment to merge with competitors or accept incumbent offers in exchange for resources to continue their growth trajectory.

The second half of the year is typically more auspicious for mergers and acquisitions, says Leonardo Dell’Oso, partner and deals lead at PwC Brazil. He emphasizes that there are multiple reasons to expect a record-setting year, even with inflation and the risk of recession in the U.S. and Europe.

Companies from sectors that benefited from the Covid pandemic — such as technology, financial services, energy, health, and agribusiness — want to accelerate their expansion and diversification plans to emerge even stronger from the crisis. Diagnostic companies Fleury and Dasa are a great example, expanding their operations...

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