Mergers and acquisitions (M&A) started 2022 on a high note in Brazil, continuing the trend seen in 2021, a year in which the country recorded... record value in this type of operation, according to a survey by the consulting firm Bain & Company.
Between January and June 2022, according to data from PwC Brazil, the following were recorded: 807 transactions Of this nature, a new record for the country. The highlight is the technology sector, which has led this market for 10 years.
It is also worth highlighting mergers and acquisitions involving startups, which, although generally involving smaller amounts, are extremely significant in volume. There were 110 in the first semester., a 7% decrease compared to the same period in 2021.
Despite the reduction, this is positive data for fintechs, since investments in this segment plummeted 44% in the first half of the year. According to experts, uncontrolled inflation, high interest rates, political uncertainties, and geopolitical factors, such as the war in Ukraine, are some of the factors that explain this drop.
That said, below are the biggest mergers and acquisitions in Brazil in the first half of 2022!
Major mergers and acquisitions in Brazil in 2022
Check out some of the biggest mergers and acquisitions of the first half of 2022, broken down by sector.
Technology
Unico, a Brazilian digital identity (IDtech) startup, received a US$100 million investment (R$498 million as of May 5th) in March 2022, led by Goldman Sachs.
With this, Unico's value increased to US$2,6 billion, placing it among the largest SaaS companies in Latin America.
Following this investment, Goldman Sachs became part of Unico's board as an investor and strategic partner.
Financial
Among the mergers and acquisitions transactions in the first half of 2022, one of the most talked about occurred in the financial sector. This was the purchase of 11,3% of XP Investimentos' capital by Itaú Unibanco for R$ 7,9 billion.
Another transaction that caught the market's attention was the acquisition of 5,23% of Itaú Unibanco's shares by the American company GQC Partners for R$ 5,9 billion.
Public services
In the last month of the first half of 2022, Eneva SA, a Brazilian company in the electricity sector that also operates in the generation, exploration and production of hydrocarbons, acquired CELSEPAR (Centrais Elétricas de Sergipe Participações) for R$ 6,1 billion.
Under the agreement, Eneva assumed the debt of Centrais Elétricas de Sergipe (CELSE), a wholly-owned subsidiary of CELSEPAR, of R$ 4,1 billion. Therefore, the total value of the transaction reaches R$ 10,2 billion.
Also in June 2022, the Brazilian Nuclear and Binational Energy Holdings Company (ENBPar), a state-owned company created in 2021, made an investment of R$ 3,5 billion in Eletrobras.
This transaction is part of the privatization process of Eletrobras and gave ENBPar control of activities that were not privatized. Under the agreement, the state-owned company will manage public policies and control the companies Itaipu Binacional and Eletronuclear, responsible for the Angra 1, 2 and 3 nuclear power plants.
Health Insurance
The healthcare sector also witnessed significant mergers and acquisitions in 2022. Among them, it is worth mentioning the acquisition of Serviços Hospitalares Yuge, owner of Hospital São Francisco, by Kora Saúde.
The transaction involved figures of R$ 330 million and was carried out through the company Itapuã, controlled by Kora.
Another noteworthy transaction was the purchase of Grupo Smile (Smile Saúde) by Hapvida, for the amount of R$ 300 million.
Oil and gas
In April 2022, Petrobras announced it had received R$ 5,26 billion from Shell's Brazilian subsidiary as compensation for its 25% stake in the Atapu block, a pre-salt area in the Santos Basin.
Retail
Announced to the market in 2021, Carrefour's acquisition of Grupo Big was completed in June 2022. This transaction, one of the largest in recent retail mergers and acquisitions history, cost R$ 7 billion.
In April 2022, BrMalls and Aliansce Sonae announced their merger. When completed, the operation will create a company with 69 new shopping centers and a market value of R$ 13,4 billion, the largest in Latin America.
The transaction still needs to be approved by the Administrative Council for Economic Defense (Cade).
Also in the retail sector, in April 2022, Lojas Renner announced the acquisition of Uello Tecnologia, a logistics startup (logtech) specializing in offering customized solutions for medium and large corporate clients. The value of the transaction was not disclosed.
What to expect for the second half of the year
Market expectations are that mergers and acquisitions will remain high in the second half of the year, especially in the startup sector.
In fact, some of these acquisitions have already been announced, such as RD Station's purchase of Tallos for R$ 6,7 million.
For startup founders looking to take advantage of this positive moment, here are some tips:
Organize your company.
Before considering a potential sale or merger of the business, your startup needs to have its house in order.
This means having well-defined processes that align with best practices and market guidelines in financial, accounting, governance, and other matters.
Your startup must be able to demonstrate operational data while simultaneously offering assurances that this information is reliable.
In this sense, the use of a system quality ERP can be of great help.
Be open to proposals and negotiations.
Even if you don't intend to "get rid" of your business right now, it's important to be open to conversations about mergers and acquisitions.
This will help to "ventilate" the company's name in the market, build relationships with investors and businesspeople, and pave the way for future transactions, including capital investments.
Consider more than one option.
It's not uncommon for startup founders to receive multi-million dollar offers to sell their company. However, it's not advisable to accept the first offer without first evaluating the market.
It's possible that your startup is positioned in a very promising market, and other companies may be interested in acquiring it. In that case, you can evaluate the most advantageous offers.
In the event of a merger, carefully evaluate all aspects involved in the transaction.
In general, the merger process is much more complex and delicate than a sale, since a new company is created from this transaction.
Therefore, before moving forward with negotiations, it is essential to assess aspects such as organizational cultures, synergies, management aspects, business complementarity, etc.
Did you enjoy learning more about mergers and acquisitions in Brazil? Then also read: ERP for Startups – How to make the right choice!
