Brazil's hard lessons in public M&A

Author: Zoe Thomas | Published: 6 Feb 2015
The telco at the centre of one of the country's few public takeovers

The combination of telecommunication companies Oi and PT has taught Brazilian investors the downside of public M&A. A more thorough review of disclosures is likely to occur in future deals.

Public company M&A is rare in Brazil, and many difficulties faced in the merger of its biggest telco Oi with Portugal’s PT are typical pitfalls. The deal has been closely watched because of general stagnation in the Brazilian economy.

Investors of both companies are angry over what their boards may have concealed or planned before the merger. Brazilian shareholders have called for increased disclosure standards, claiming they should have been given an opportunity to revote on the deal after it was re-priced.

"Our law is conceptually a good one," said João Ricardo de Azevedo Ribeiro a partner with...