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Brazil-China Partnership

Foreign Investors are behind most Brazil acquisitions

March 30 2016

Foreign investors were behind the majority of business acquisitions in Brazil in 2015, beating domestic investors for the first time since 2002, according to a report published Wednesday by the local media.

Foreign investors accounted for 51 percent of acquisitions and capital increases last year, up from 38 percent in 2014, according to the report, which was released by PwC’s Brazilian unit and published by the daily Folha de S. Paulo.

That percentage is expected to rise to 55 percent in 2016.

The depreciation of the real against the dollar and the difficulties some sectors are facing amid a severe economic crisis – with gross domestic product (GDP) contracting for three straight quarters and inflation well above the targeted level – have facilitated the arrival of foreign companies and investors.

“Foreigners are going to remain interested in Brazil while domestic companies will continue to have financing difficulties,” Rogerio Gollo, a senior partner at PwC Brazil, said.
The sectors most likely to attract foreign investment in 2016 are information technology, trade, agribusiness and renewable energies, Gollo said.

A total of 672 acquisitions of majority or minority stakes in Brazil-based companies took place last year, with foreign investors accounting for more than half of those transactions.
A “drastic reduction” in acquisitions by domestic investors has occurred since July amid a worsening political crisis that could even lead to President Dilma Rousseff’s impeachment, Gollo said.

Source Latino Fox News

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