M&A expected to recover after drop in 2023
After a year in which there was no shortage of challenges for asset sales, the mergers and acquisitions (M&A) queue is expected to pick up pace. There are still uncertainties surrounding the market, but the sector predicts a more normal 2024, with some large transactions.Last year, the volume of operations announced up to December 27 reached R$234 billion, which represents a 17% drop compared to 2022, when the segment had operations of R$283.04 billion. The figures are from the Dealogic consultancy and already take into account the announcement of the sale of health insurance company Amil to businessman José Seripieri Junior, for R$11 billion. The deal, agreed just before Christmas, was one of the biggest of 2023 and helped mitigate the fall, but it didn’t prevent last year’s performance from being the worst in the last six years.With the signs of improvement that have come into play mainly since the second half of 2023, investment banks operating in Brazil have gained mandates again. Thus, operations are expected to gain traction.Among the transactions expected to be closed in 2024, there are multibillion deals with the potential to boost annual volume. Among them, expectations lie with the possible merger between Eneva and Vibra and the sale of Braskem, a process that has been dragging on for years."The year [2023] started off very adversely, but after March talks resumed and halfway through the year these talks turned into mandates. And the expectation is that these mandates will become transactions in 2024," said Diogo Aragão, head of mergers and acquisitions with Bank of America. The executive says that the volatile scenario is still in play, but notes that, at the current level, it is already possible for companies to think again about strategic operations, opening up space for M&A agendas to advance.Bruno Amaral, a partner with BTG Pactual in the M&A area, said that in the second half of last year, the industry gained traction, which was reflected in the increase in the number of mandates at the financial institution. "We saw a much stronger second half of the year than the first and a movement very much guided by the return of foreign interest."However, according to the executive, more than the growth in the number of transactions, the improvement in the environment can be seen in the reduction in the time it takes to close deals. Agreements, which used to take between nine and 18 months to complete, have returned to the normal pace of six to 12...
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