Brazil: M&A slows down as closer scrutiny and corruption crackdown loom

Brazil’s Merger and Acquisition’s activity could be set for a slow year in 2017, as new rules come in in a country-wide bid to increase transparency and regain credibility. The announcement of tougher rules has already rocked some important upcoming agreements, as several business groups have increased pressure on the government to stop its strategy of selling off state assets to pay off mounting debts. Many companies have requested competition regulator CADE to investigate their rivals in recent months, stalling many important agreements.

Among the deals affected are those by state-owned oil company Petrobras. Back in December 2016 a court ruled to stop the sale of Petrobras’ assets, scuttling the company’s fund-raising target for the year set at $15.1 billion USD. Reuters news service has reported on 14 other M&A deals worth a combined total of over $8 billion USD that have been held back or postponed due to the uncertain legal consequences.

Flavio Valadão, M&A Director for Banco Santander Brazil, has said that the activities in this sector will likely slow down due to a deepening recession and the numerous cases of corruption that continue to be discovered.

Full Content: Latin Post

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