Brazil’s Q1 registers highest number of mergers and acquisitions in 20 years – KPMG

RIO DE JANEIRO, BRAZIL – In the first quarter 2021, 375 mergers and acquisitions were registered, the majority of which – 244 – among Brazilian companies, points out KPMG.

The number of such deals in the period is the highest in 20 years, according to the survey conducted by the consultancy on a quarterly basis, with companies from 43 national economic sectors. Internet and telecommunications companies lead the ranking, with 77 operations in this years’ first 3 months.

In second place, with 48 operations in the period, is the information technology sector, followed by education, financial institutions, and real estate, each with 11, followed by telecom and media with 10, service companies with 9, retail with 8, and energy companies with 7.

“Adding the transactions made by internet and information technology companies, the total is 125 deals closed, which is almost half of total domestic transactions. This is the first time this has occurred in the survey, indicating that the transaction scenario has changed. With the pandemic, many companies decided to invest in digital transformation. Consequently, the share of companies in these sectors has gained more relevance in the number of transactions”, says Luis Motta, KPMG’s partner and research coordinator.

Of the total number of transactions completed in the first quarter 2021, 116 were of the CB1 type, that is, 31% represent transactions of foreigners buying Brazilian companies.

Another 13 operations were of type CB2, when Brazilians acquire from foreigners a company established abroad; 1 was of type CB3, in which Brazilians acquired, from foreigners, a company established in Brazil; and 1 was CB4, in which a foreigner acquires, also from foreigners, a company established in Brazil.

“Brazilians making acquisitions in Brazil have been the transactions driver this year. In addition, there is a trend toward resuming the share of foreigners in the country, which had been lost last year when the pandemic started. Thus, some internationalization plans were set aside until there was a more predictable scenario. However, with the expectation of the vaccine, companies adapted to a new reality and came back with business plans,” explains Motta.

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