In Brazil, operations decreased by 16% from January to March compared to the same period in 2022, a decline higher than the global average and that of the United States, where operations decreased by 14%
You commissions persistent and the banking turmoil we WE and go Europe delayed recovery Mergers and acquisitions (M&A) in the main world markets. To the BrazilTHE Selico of 13.75% annually and the crisis of credit aggravated by the case Americans it affected the business, albeit to a lesser extent than in other Latin American countries such as Peru and Chile, and was also affected by political issues.
In Brazil, the number of M&As decreased by 16% from January to March compared to the same period last year, totaling 335 deals, according to data from the consultancy firm Kroll obtained by the Stadium/Broadcast. The pace of decline exceeds the global average and in the United States, where the lowest was 14%. However, that’s less than half the impact seen in Latin America, which accounts for 10% of the global market. In the region, the decline was 34%, in the same period of comparison.
cheap shares
On the stock exchange, highly depreciated securities can stimulate not only takeover bids of companies through funds and mergers. At BTG Pactual, executives stopped by each day to analyze how to execute M&As for companies that recently went public and are cheap, with shares falling close to 90%. “We will see many companies coming together,” predicted the bank’s director, Cláudio Berquó, at a recent event.
Retail is one of the most active sectors in Brazil in terms of prospects for takeovers or mergers, with several companies feeling the pinch in the context of high interest rates and a decline in purchasing power due to inflation. Among the names mentioned is a possible merger between Tok&Stok and rival Mobly.
Another very active sector is that of electricity, mainly in the generation and distribution of renewable energy, such as wind and solar. This week, Neoenergia sold 50% of eight transmission assets to GIC, Singapore’s sovereign wealth fund, for BRL 1.2 billion.
banking crisis
In the United States, the macroeconomic scenario of high interest rates and persistent inflation was aggravated by the banking turmoil in March following the fall of three dominoes in the sector, which increased market volatility and spilled over into M&A activity. “Expectation for 2023 was for a slightly more buoyant market, but, in March, the view was reversed and the M&As segment is still experiencing an upturn,” said partner at North American law firm Hughes Hubbard & Reed LLP. Carlos Lobo, A Stadium/Broadcast.
“Trust affects people’s ability to move forward, to be active in the M&A market, and certainly what’s happened in recent weeks has slowed down some of the dialogue,” said David Solomon, president of Goldman Sachs.
In addition to the number of transactions, the financial volume transacted by mergers and acquisitions decreased in all markets at the beginning of the year. Latin America, the Caribbean and Australia were the worst performers, down 69% in the first quarter over a year, according to US consultancy Dealogic. In the United States, the world’s largest merger and acquisition phase, financial volume decreased by 36% to $3.6 billion. Already in Europe, despite the hasty sale of Credit Suisse to rival UBS, the figure fell by almost half, a pace that slows to a minimum of 43% in a global perspective.
recovery
Despite the numbers, Wall Street bankers and Faria Lima remain optimistic and hope that mergers and acquisitions stalled in the midst of the toughest scenario will advance and help the market engage in a stronger recovery.
In Brazil, a recovery of activity is expected in the coming months and which could be accelerated according to the macroeconomic scenario, with the progress of the fiscal framework and the tax reform, in addition to the expected drop in interest rates in the country. Among the impulses for the Brazilian M&A market, the movement of large multinationals that review local portfolios can move the market, according to Pierantoni, of Kroll.
Source: Terra
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