Brazil on sale? an analysis of mergers and acquisitions involving brazilian companies

Abstract

The global economic dynamics, with an emphasis on the monetary policies of the Federal Reserve (FED) of the United States and the Central Bank of Brazil (Bacen), exert a significant influence on business decisions, especially mergers and acquisitions (M&A). These processes are crucial for the expansion and consolidation of large corporations and are closely linked to capital market conditions and competition. In recent years, the Brazilian market has seen a significant increase in M&A transactions, which calls for a more in-depth analysis of market conditions, both domestic and international. This study seeks to explore the impact of interest rate variations from the FED and Bacen on M&A involving Brazilian companies in Brazil, Brazilian-controlled companies with headquarters in Brazil or abroad, foreign-controlled companies acquiring Brazilian-controlled companies, both in Brazil and abroad, and foreign-controlled companies acquiring foreign-controlled companies in Brazil. Interest rates directly affect the attractiveness and viability of M&A, influencing financing costs, asset valuation, and return expectations. In times of crisis, acquisitions can result in good financial returns if made strategically. The study aims to provide insights into how these interest rate variations impact business decisions, both in Brazil and abroad, and offers a solid foundation for managers and investors to make informed decisions in times of economic uncertainty.