Brazil: The first real M&A

Author: | Published: 1 Dec 2006
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Recommended firms
Tier 1
Machado Meyer Sendacz e Opice – Advogados
Mattos Filho Veiga Filho Marrey Jr e Quiroga Advogados
Pinheiro Neto Advogados
Tier 2
Barbosa Müssnich & Aragão
Tozzini Freire Teixeira e Silva Advogados

The takeoff in Brazil's equity capital markets has been mirrored by a leap in M&A. According to Dealogic, in the first 10 months of 2006 there were 193 deals involving a Brazilian target, up from 123 over the same period in 2005. These have been worth $47.6 billion, more than six times the value for last year.

Among the highlights this year has been Arcelor Mittal's attempts to include subsidiary Arcelor Brasil in its global merger. The Brazilian securities regulator, Comissão de Valores Mobiliários (CVM), ruled in September that the parent company must make a buyout offer to Arcelor Brasil's minority shareholders. Mattos Filho Veiga Filho Marrey Jr e Quiroga was Brazilian counsel to Mittal on the merger, Barbosa Müssnich & Aragão represented Arcelor.

Machado Meyer Sendacz e Opice was local counsel to UBS on the Swiss bank's acquisition of Banco Pactual for a total of $2.5 billion. Barbosa Müssnich acted for Pactual.

Last year Lojas Renner became the fist Brazilian company to not have a controlling shareholder when JC Penney sold 98% of the company's stock. Since then, a further 12 companies have got rid of their controlling shareholder or groups, raising the prospect of tender offers for the first time. Earlier this year shareholders in Perdigão, which was represented by Mattos Filho, rejected a tender offer from rival Sadia and companies have begun to adopt poison pills. Observers are asking the CVM to clarify its tender offer rules.