M&A Market Overview
In 2023, volume in Brazil M&A activity declined to 1,400 total transactions, representing a 9.3% decrease compared to the same period in 2022. Sectors that were more active included financial / insurance, technology, energy and equipment, and food and beverage. Brazil also experienced declining public offerings in 2023 - IPOs (0) and follow-ons (22) – so M&A activity should be poised to take advantage and show strength in the coming years.
Private Equity and Venture Capital
In 2023, financial investors invested almost BRL 50 billion (bn) in Brazil, and VCs significantly outperformed PE investment. In 2023, financial sponsors were present in 33.2% of the transactions, with investments of BRL 98.2 bn.
Equities Activity
Activities in the capital market in 2023 remained at the same level as 2022, with only 22 follow-ons totaling BRL 32 bn. Since January 2022, Brazil capital markets has had no IPOs. The inflation in Brazil (measured by the Índice de Preços ao Consumidor Amplo [IPCA]) reached an accumulated 4.62% in 2023. Brazil’s Central Bank (BACEN) started a review, and the country’s basic interest rate (named SELIC) was reviewed to 11.75% on December 31, 2023, after sitting at 13.75% since the end of 2022. Market expectations are 9.0% by end of 2024. Fitch Ratings confirmed Brazil's sovereign rating at “BB,” with a stable outlook.
