Brazil M&A Watch: Fewer but bigger deals in 2018

Brazil saw an increase in M&A deal value last year, while the number of transactions declined.

Deal value totaled 177bn reais (US$46.6bn), up 28% from 2017, according to Brazilian finance and capital markets association Anbima. The number of transactions fell to 140 from 143 the previous year.

Deal value was heavily impacted by the acquisition of local pulp producer Fibria by its rival Suzano, with a price tag of 47.6bn reais.

M&A was mainly concentrated in three sectors: pulp, energy and Ict.

BULLISH ON 2019

For 2019 Anbima is projecting a good year for M&A due to the market-friendly reform agenda of President Jair Bolsonaro.

"We are optimistic for this year as the new government is adopting an agenda that is likely to fuel the country's economic expansion," said Dimas Megna, M&A committee coordinator at Anbima, in response to a question from BNamericas at a press conference.

Anbima is optimistic on future deals in the infrastructure sector.

"The government already announced a plan to promote concessions and privatizations in the infrastructure area and this is likely to attract huge interest from local and international investors in the segment," said Megna.

According to the executive, this year's M&A activity could also be fueled by congressional approval of a major pension reform that the government has presented.

M&A ADVISORS

Last year saw investment banks from the US and Brazil dominate the scene of M&A advisers.

JP Morgan was ranked first, followed by local players Bradesco BBI and Itaú BBA, and then by Bank of America Merrill Lynch and Morgan Stanley.