- Market uncertainty in M&A persists due to deeper structural issues
- Prosus anticipates competition with China in the Brazilian market
- CADE publishes study on Standard Essential Patents
- A hospital syndicate was fined in Mato Grosso do Sul
- Brazil confirms global trend of blockchain market consolidation
Market uncertainty in M&A persists due to deeper structural issues
Despite Trump’s concessions toward Brazil, the mergers and acquisitions (M&A) market, along with the country’s manufacturing sector, remains under strain. On July 30, Trump issued an executive order exempting certain critical goods in bilateral trade from a heightened 50% tariff. This includes Brazilian imports such as orange juice, fertilizers, civil aviation products (Embraer), steel and aluminum (already subject to a 50% tariff), timber and pulp, certain minerals, and fossil fuels, including coal.
Meanwhile, the National Confederation of Industry (CNI) forecasts stagnation and slowing growth in its sector. Despite positive production trends in the automotive industry, the mining, oil and gas, and food industries are faltering. The latter is particularly significant for Brazil’s export revenues due to its high global competitiveness, whereas Brazilian cars are primarily a regional export, mainly in demand in Argentina and other Latin American countries. The CNI notes that tariffs, which are already impacting Brazil’s machinery and automotive sectors, play a significant role in the ongoing deindustrialization process affecting the national industry. For many companies, business restructuring through M&A deals serves as a way to navigate these challenges.
However, both the dynamics of international M&A deals involving Brazil and the ongoing deindustrialization are driven by deeper issues. The share of international M&A transactions involving Brazil has dropped from 49% in 2015 to 18% in recent years, while the industrial sector’s contribution to GDP has been declining since the country began actively exporting raw materials, particularly to China. These are structural problems in the Brazilian economy that the government is attempting to address. The high key interest rate in the country also contributes to the decline in international M&A activity involving Brazil.
Source: O Globo, Fusões & Aquisições, Fusões & Aquisições
Prosus anticipates competition with China in the Brazilian market
Dutch investment company Prosus, which controls major food delivery companies worldwide, including iFood in Brazil, has reduced its stake in Chinese delivery operator Meituan from 4.5% to approximately 3% and plans to continue exiting its management of the Chinese company. The divestiture is valued at $99 billion.
This follows Meituan’s announcement of plans to actively enter the Brazilian market with its brand Keeta by the end of 2025. The Chinese company also intends to invest around $1 billion in the Brazilian market over the next five years, including planned acquisitions such as Rappi and Zig, to compete with iFood.
Prosus’s divestiture is believed to serve multiple objectives. First, it frees up a portion of Prosus’s capital, which the investor can redirect toward new acquisitions in Brazil. Given the company’s ongoing acquisitions in Brazil, this aligns with Prosus’s strategy of focusing on the Brazilian food delivery and catering services market. Second, the divestiture aims to mitigate reputational risks that could arise from potential regulatory claims against Meituan, including antitrust issues or labor-related concerns.
Source: Fusões & Aquisições
CADE publishes study on Standard Essential Patents
The Brazilian antitrust regulator, CADE, has prepared and published a study on the significance of Standard Essential Patents (SEPs) for competition in markets with high levels of scientific and technological intensity.
The study examines legal approaches and practices in different countries regarding SEPs. It notes that countries such as China, Japan, and South Korea have specific guidelines and recommendations for judicial handling of this patent category, while in the United States, for instance, disputes involving SEPs are primarily addressed under antitrust regulation principles. In Brazil, there is currently no specific regulation for SEPs, but there are precedents where courts have made decisions based on general patent regulations.
SEPs are becoming increasingly important in sectors such as telecommunications, consumer electronics, the automotive industry, and the Internet of Things, where legal disputes often involve intellectual property issues and royalty payments.
The study also addresses competition-related challenges, such as refusals to grant patents, abuse of contract terms, improper patent exploitation, and the creation of patent pools that could potentially harm competition. It also highlights territorial issues in patent registration and use, as well as challenges in resolving transnational disputes, where decisions by antitrust authorities may conflict depending on the jurisdiction.
Source: CADE
A hospital syndicate was fined in Mato Grosso do Sul
On August 6, CADE issued a guilty verdict against the Syndicate of Hospitals and Health Institutions of the State of Mato Grosso do Sul (Sindhesul) due to cartel collusion. The fine exceeded $65,000.
The hospitals within the organization used inflated prices to offset costs of medicines and medical supplies covered by health insurers. Pricing recommendations were publicly available on Sindhesul’s website, indicating the adoption of uniform commercial practices.
As a defense argument, the accused party attempted to claim a market power imbalance favoring insurance companies as justification for this "compensatory" practice, but to no avail. No substantial evidence of such an imbalance in favor of insurers was provided.
Source: CADE
Brazil confirms global trend of blockchain market consolidation
Financial services company Transfero, which utilizes blockchain technology, has secured minority stakes in startups such as Cremona Capital (30%), Openi (25%), and Mzic (20%). All acquisitions aim to strengthen its own infrastructure and expand offerings within its digital asset ecosystem.
Transfero is known for issuing BRZ, Latin America’s largest stablecoin backed by Brazilian reals. Cremona Capital specializes in cryptocurrency market expertise, Openi provides accounting services incorporating new digital technologies and automation, while Mzic is a payment and settlement platform focused on media, also leveraging DeFi (decentralized finance) solutions.
Over the past two years, the number of mergers and acquisitions in the blockchain infrastructure and digital asset market has increased, and Transfero’s moves confirm the global trend toward blockchain ecosystem consolidation.
Source: Fusões & Aquisições
