Brazil’s M&A market expected to pick up after big drop in 2023

The global pandemic sparked an M&A boom in Brazil through 2021, with 1,659 transactions reported by PwC. This was driven by a consolidation movement in sectors directly affected (for better or worse) by the pandemic and a record volume of follow-ons (publicly traded companies raising capital through secondary offerings).  However, the pace has cooled significantly since. 

The M&A market showed 1,556 transactions by the end of 2022, and slowed further in the first half of 2023 — 610 transactions versus 807 the previous year, a 24 percent drop. Political uncertainties surrounding the most polarized presidential election in Brazil’s history and high capital costs — stemming from a benchmark interest rate maintained at an all-time peak for a year — were prime reasons behind the drop in mergers and acquisitions.