The Brazilian Mergers and Acquisitions market is very active, as occur in several other countries at this moment. In Latin America, Brazil concentrates on average 50% of all transactions in the region.
In the first quarter of 2021, M&A operations in Brazil had an increase of 50% compared to the same period in 2020, and volume 104% higher than the average for the quarter for the period from 2015 to 2019.
In 2020, there was a record of 1,038 transactions in Brazil, and 2021 presents an acceleration in business and a strong growth trend in the volume of transactions, with potential for a new record.
Due to Covid-19, which generated many uncertainties, especially in the months of March and April 2020, the resumption of growth in the number of transactions took place from June 2020, in a regular and significant manner. The volume for the 2nd quarter 2021 shows a growth of 23.7% compared to the previous quarter, and the 1st half of 2021 totaled 812 operations in Brazil, a volume 98% higher than in 2020, and investments of R$ 353 billion (+229.8%), with a predominance of Strategic Investors with a 91% increase in volume and 291.3% in investments compared to 2020. Financial investors recorded an increase of 111% in volume and 167.2% in amount.
Among the most active sectors in 2020 and 2021, Information and Communication Technology (IT), Financial Institutions and Hospitals and Clinical Analysis Laboratories stand out. Historically, around half of the transactions in the country are worth up to R$ 50 million reais (about US% 10M), with the IT sector being the most active, accounting for around 50% of all local transactions. The Southeast Region concentrates an average of 60% of the M&A activity, and only 5% of the volume of transactions takes place outside the country.
National Investors, in the accumulated result for the year, were responsible for a growth both in volume, of 113.8%, and in amount, of 249,5%, with 680 operations (+113,8%) compared to 2020, with 83,7% of operations. The investment was in the order of R$ 277,6 billion, equivalent to 78,6% of the total, corresponding to a growth of 249,5 % in relation to the same period of the previous year.
In the first half of 2021, Foreign Investors registered 132 operations, growth of 43,5%, and R$ 75,5 billion in investments, an increase of 173% over 2020, totaling 16,3% of M&A in the country. The most active foreign investors in the country are generally from the United States, followed by France and Spain, with an important participation of the United Kingdom, Germany, and Argentina.
Considering the role of the country as one of the world’s largest agriculture producer, with an important Privatization agenda in place, a huge demand for large Infrastructure projects, flourishing startup and innovation scenario, and a favorable exchange rate, Brasil stands out as a great capital investment destiny for the real economy in the short term.