Recent years have seen a surge of merger and acquisition (M&A) activity in Brazil as the result of a positive macroeconomic and social outlook, and political stability. Foreign investors have participated intensively in this activity, and new ones appear daily who want to start new operations or acquire existing businesses.
Although the country is very friendly to foreign investment, newcomers should pay attention to two preliminary issues when considering whether to make an acquisition in Brazil. The first is whether the relevant sector has any restrictions on foreign ownership. Health services, rural land, financial institutions, air carriers, publishing and television all carry some form of restriction.
The second consideration is whether the sector is heavily influenced by government policies that may have an effect on future cash flow. Energy, education and health are examples of such sectors.
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Carlos Alexandre Lobo is a partner at Veirano Advogados. He can be contacted at +55 21 3824 4747 or by email at carlos.lobo@veirano.com.br
