Distressed M&A could ease Brazilian corruption

Author: John Crabb | Published: 31 May 2017

A fire sale of Brazilian infrastructure assets could come as a boost to the country’s relentless fight against corruption.

In recent years quasi-sovereign entities including CPFL Energia, Odebrecht and Petrobras have been disposing of distressed, non-core assets – to anyone with cash readily available.

Paul Hastings partner Joy Gallup proposed that these deals could improve the landscape as demand for international business standards increases amongst prospective investors. But this view is not unanimous.

"It ultimately doesn't matter how big you are - you are going to be caught"

As the volume of state-owned assets decreases, such as in the case of Petrobras, and more assets are transferred into the hands of foreign investors, one prominent investor, Canadian Brookfield Infrastructure Partners, publically announced last year these deals are 'once in a lifetime opportunities’.

Gallup said that one viable outcome from the disposal of distressed assets is that as state owned entities become...