M&A Landscape in Brazil in 2025
June 2025
Despite the high level of the interest rates in Brazil (the basic rate was 12.25% at the end of 2024 and is 14.75% at the beginning of June 2025) and the global and domestic macroeconomic uncertainties, some industries continue to see a reasonable level of M&A activity. Just to give an example, the energy sector saw a record level of reported transactions in 2024 (72 according to KPMG).
To be fair, the M&A numbers in the beginning of 2025 seemed to be mixed. While PwC saw a solid increase in the number of transactions in the first four months of 2025, the data gathered by TTR showed a decrease of 21.22% in the number of deals in 2024 and an increase of 10.10% in the value of deals in 2024 (when compared to 2023), as well as mere decrease of 0.92% in the number of deals and a 25.05% decrease in value the first four months of 2025 (when compared to the same period in 2024). These numbers of transactions represented around 58% of the deals in LATAM in 2024 and around 62.6% of the deals in LATAM in the first four months of 2025. But the tide might change. With a different cut, Dealogic has just reported that, if one considers the transactions announced up to June 5, 2025, there has been an increase of 50% in value and a decrease of 31% in the number of deals, thus suggesting that the last few weeks have seen a considerable number of large transactions.
It is worth noting that none of the reports can cover all the transactions that actually occurred, as many deals – especially the smaller ones – are not reported.
Also, while the deals led by strategic players sustain the better portion of those numbers, ABVCAP reported a decrease in the number of PE deals around 15.5% (and 45.2% in terms of value) in 2024, and a 15% decrease in number in the first quarter of 2025. Venture capital activity saw a decrease of 44.9% in number of deals in 2024, but a 24.7% increase in the values involved, showing that the players have preferred to look for fewer deals with greater quality; the first quarter of 2025 saw decreases of 33% in the number of deals and 36.4% in values.
Industries
The industries leading such M&A activity were technology, real estate, financial services and software, followed by energy and healthcare / life sciences.
Distressed assets may have played a role as well. While Brazil had a solid GDP growth in 2024 (3.4%) and low unemployment rate (6.2%), fueled by a concerning fiscal expansion, the number of insolvency procedures increased around 70% in the last two years in the wake of the increasing interest rates. Even companies that were not near insolvency were forced to sell assets to improve their financial ratios and better navigate in a scenario of high inflation and high interest rates.
Foreign Capital
Foreign interest in Brazil remains active. The level of FDI has remained stable, varying around USD 70 billion on a 12-month rolling basis for several months.
While the uncertainties triggered by the US tariff threats led many players to pause their negotiations, particularly in April 2025, some factors, such as the need for geographic diversification and the perception that Brazil may be one of the least affected countries, may have led to the redirection to Brazil of investments that would otherwise go other countries. This was also felt at the Brazilian Stock Exchange, whose index soared near 14% in local currency (and even more in USD) between January and May 2025 (also because the valuations were at a record low).
The number of cross-border deals involving foreign players has increased in 2025. TTR reports 175 deals in the first four months of 2025. The main country of origin of the deals remains the United States, followed by the Netherlands, France, Argentina, the United Kingdom, Italy and Spain.
While Chinese companies had already been very active in buying mining companies in Brazil, in May 2025, Chinese companies announced BRL 27 billion in new investments in Brazil, through M&A and greenfield operations, ranging from automotive, mining, infrastructure and tech services.
Countries from the Gulf Cooperation Council (GCC) have also shown interest in increasing their assets in Brazil, having announced investments.
On the other hand, Brazilian companies are also shopping abroad. The main destination was also the United States in 2025, followed by Portugal, Spain, Chile, France and Argentina.
What to Look Ahead
The deals in the second half of 2025 will probably continue to be led by the technology, real estate, financial services and energy sectors. More mining deals will be probably announced in light of the search for critical minerals in the new geopolitical order (just to give one example, Brazil has the second largest reserve of rare earth minerals).
Agribusiness is promising a good year, with another record output and possibly a good scenario for exports in light of the disputes between the US and China.
Finally, we should mention the infrastructure sector, as Associação Brasileira da Infraestrutura e Indústrias de Base (Abdib) expects that more than 500 projects may be offered to the private sectors, possibly involving investments of more than BRL 750 billion, ranging from toll roads, ports, water treatment to other sectors, which tends to lead to joint ventures and other types of M&A activity.
This bulletin is for information purposes only and should not be relied upon to obtain legal advice on any of the topics dealt with here. For additional information, please contact the leaders of the Mergers and Acquisitions team.
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