'Brazilian investors now dominate investments within Brazil'

According to Kroll’s Brazil Transactions Insights – Winter 2025 report, Brazil recorded 1,426 M&A transactions in 2024, a 1.9% increase compared to the previous year. Brazilian investors accounted for 82.3% of the deal activity. The return to growth follows a 5.2% decline in activity in 2022, followed by another drop in 2023, this time of 9.3%. Some of the key transactions highlighted in the report include Positivo Tecnologia’s acquisition of Algar Telecom for R$235 million, Bradesco’s purchase of 50% of Banco John Deere in August and Grupo Bimbo’s acquisition of Wickbold. Leaders League got the thoughts of Kroll’s Managing Director of M&A, Alexandre Pierantoni.

Decisor Brasil: According to Kroll’s latest Brazil Transactions Insights report, Brazilian investors dominated M&A deals in the country in the past year. What factors can we attribute this to?

Alexandre Pierantoni: Brazilian investors participated in more than 84% of the M&A transactions conducted in Brazil in 2024. This figure is unprecedented, as foreign investors previously had an average participation of around 35% in past years (compared to just 16% in 2024).

The world has become more uncertain and challenging, leading to a natural trend toward local investments – evidenced by the fact that Brazilian investors now dominate investments within Brazil. Additionally, from a global perspective, Brazil has lost attractiveness as an investment destination, which has consequently impacted M&A activity involving foreign investors.

Obviously, the uncertainty surrounding fiscal issues and public policies, combined with other local challenges and the performance of the Brazilian economy –especially from a long-term perspective – also impact the country’s attractiveness and the volume of M&A transactions. Additionally, interest rates and investment alternatives have affected the capital markets, a key player in providing access to resources, which in turn has influenced M&A activity and the country’s overall appeal.

In your view, what was the main factor driving the recovery of M&A activity after two years of decline?

I prefer to analyze activity levels. In 2024, we saw 1,426 announced transactions, compared to 1,400 and 1,543 in the previous two years, respectively. Brazil recorded a peak of 1,627 announced transactions in 2021, which represented a different level of activity – mainly due to more favorable conditions regarding the cost of capital and access to funding. The range of 1,400–1,500 transactions observed in recent years reflects a stable performance in the Brazilian market in terms of investment and attractiveness to both domestic and foreign investors. It is also important to highlight that M&A activity in Brazil has a multi-sector and multi-regional profile, which contributes to this transaction stability.

What are the prospects for 2025?

I see two different scenarios: one for the global market and another for Brazil. While globally, we are already seeing an increase in M&A activity – particularly in the US – despite ongoing global challenges (geopolitical shifts, trade policies, and declining interest rates, which are positively impacting leveraged M&A transactions), Brazil faces yet another challenging environment.

We are experiencing a cycle of rising interest rates and capital costs, which could directly impact capital markets and M&A activity. Additionally, the well-known difficulties in various areas persist, and 2025 brings even more uncertainties. 

That said, there are certainly specific opportunities. In this sense, certain sectors – such as energy – could benefit. Moreover, Brazilian investors will likely continue driving deals, taking advantage of opportunities across various industries to consolidate or expand their operations or complement their product and service portfolios. Given this dynamic, I believe we may see M&A activity remain at current levels.