Mergers and acquisitions hit record in Brazil in the 1st semester, study shows

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A survey carried out by PwC Brasil shows that the number of Mergers and Acquisitions (M&A) hit a record in Brazil in the first half of the year. In the first six months of 2022, there were 807 transactions against 706 deals made in 2021 – a year in which there was a historic M&A record, totaling 1,659 transactions.

The number of operations registered until June this year represents more than double the transactions registered in 2019 (390 operations), pre-pandemic period.

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The technology sector leads operations, accounting for 360 transactions (45.72% of the total volume). In 2021, the segment was responsible for 744 transactions (44.85% of the total volume).

Other hot sectors mentioned by the survey: agribusiness, food & beverage, financial institutions, education. In total, until June this year, there were 284 deals (35.19%), against 627 in 2021 (which represented 37.79%).

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In the assessment of the study, M&A transactions are attractive for the following reasons:

From the seller’s perspective

  • Enable expansion projects;
  • Accelerate growth;
  • Alternative to raise funds;
  • Make partner investments;
  • Lack of succession;
  • Financial difficulties;
  • Corporate disputes.

From the investor’s perspective

  • Investment alternative;
  • Accelerate growth;
  • Eliminate competitor;
  • Incorporate new technologies;
  • Increase the portfolio of products and services;
  • Enter new markets;
  • Win in synergy.

As opportunities, PwC cites the availability of liquidity in the market, both from investment funds and companies with robust cash flow; the M&A as a strategy to increase the companies’ capacity, even in difficult times and the prospect of the recovery of multiples, which increases the selling interest.

The challenges are mainly rising inflation globally and reducing operating margins, rising interest rates in countries, raising the cost of capital and increasing supply chain difficulties (lockdowns in China, war in Ukraine and geopolitical tensions). between the United States and China).

Source: CNN Brasil

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