The Brazilian energy and infrastructure M&A market has remained resilient in 2025, showing a modest recovery in value terms compared to 2024. According to market reports, Brazil continues to lead Latin America in deal count and capital deployed, with energy and infrastructure representing a disproportionate share of total transactions. Large-cap deals in regulated assets – such as transmission lines, hydro plants, sanitation concessions and port terminals – are driving market activity and attracting both strategic investors and global infrastructure funds.

The key driver of this activity has been the pursuit of inflation-protected, long-term cash flows in a still high-interest-rate environment. Although the Selic rate has declined gradually, financing for greenfield projects remains selective, pushing investors towards brownfield and late-stage assets with stable or regulated revenues. Inflation itself has been secondary; the greater challenge is the cost of capital and access to long-term credit, which have encouraged portfolio rotation. Sponsors are selling mature assets to recycle capital, while foreign funds and industrial players seek scale through acquisitions.

Renewable generation remains a strategic focus, but valuations in wind and solar have softened due to curtailment risks in the Northeast. Transmission constraints have limited dispatch for several projects, directly affecting energy sales and investor confidence. As a result, M&A interest in renewables is increasingly tied to hybrid projects with storage, firm offtake contracts or access to dispatchable capacity. Conversely, transmission, gas-fired and multi-fuel thermal assets, sanitation and logistics concessions continue to attract strong interest as “defensive” infrastructure.

Geopolitical uncertainty – including conflicts in Ukraine and the Middle East – has reinforced Brazil’s position as a diversification hub for global capital seeking energy security. Domestic policy has also evolved: the government recently announced guidelines for the 2026 capacity auction (LRCAP 2026), signalling continued remuneration for firm generation, including thermal plants using biodiesel.

Overall, while deal volume has stabilised, transaction values have increased, reflecting consolidation and selective investment. Compared to the global M&A environment, Brazil’s energy and infrastructure market remains robust, with activity broadly aligned with international trends and outperforming in regulated and dispatchable segments.

Over the past 12 months, three major trends have defined Brazil’s energy and infrastructure landscape: (i) consolidation of mature assets; (ii) repricing of renewable portfolios affected by curtailment; and (iii) acceleration of the low-carbon industrial agenda led by hydrogen, biofuels and port-based energy hubs.

M&A activity increasingly reflects a shift from growth-driven acquisitions to strategic repositioning. Large utilities and infrastructure groups have focused on portfolio optimisation and deleveraging, selling non-core assets to finance participation in regulated concessions or firm-capacity projects. Global investors, in turn, have concentrated on acquiring operational assets with predictable revenues rather than early-stage developments.

ESG considerations have become more embedded in deal execution rather than treated as a separate compliance layer. Investors are demanding measurable decarbonisation metrics, governance transparency and credible social impact data. The introduction of corporate emission reduction targets aligned with Brazil’s Paris Agreement commitments has also influenced due diligence processes and valuation models.

Regulatory stability remains a key differentiator. The recently announced LRCAP 2026 guidelines, which include biodiesel and other alternative fuels in capacity auctions, reflect a more pragmatic approach to the energy transition – balancing decarbonisation with reliability. In parallel, the federal government’s hydrogen initiatives, including support from the federal innovation agency FINEP for the Northeast Hydrogen Call, signal a long-term industrial policy aimed at creating new export corridors through ports such as Pecém and Suape.

Investors are accessing the Brazilian energy and infrastructure M&A market through a combination of direct acquisitions, structured partnerships and platform-based investments. Traditional asset purchases and equity stakes in operating companies remain dominant, but there is a growing preference for joint ventures and co-investment vehicles designed to mitigate regulatory and financing risks. Foreign investors often partner with local developers or infrastructure funds to navigate environmental licensing, tax structuring and complex concession frameworks.

Private equity and infrastructure funds, both domestic and international, have become central players. Leading global funds with long-term mandates – particularly those from North America, Europe and the Middle East – are targeting regulated assets such as transmission lines, sanitation concessions and logistics corridors. Pension funds and sovereign wealth investors are also increasing exposure through infrastructure debentures and brownfield portfolios.

On the corporate side, major energy utilities and industrial groups are engaging in M&A to reposition their portfolios. Brazilian conglomerates are divesting non-core assets to deleverage, while international players such as Iberdrola, Engie and Brookfield continue expanding through selective acquisitions.

New entrants in renewable fuels and hydrogen are accessing the market through early partnerships with port authorities and state development agencies, taking advantage of public-private initiatives to develop export-oriented hydrogen and ammonia infrastructure, particularly in the Northeast.

Brazil’s current energy and infrastructure pipeline is increasingly diversified, combining renewable expansion with new forms of firm capacity and grid resilience. More than BRL500 billion in investments are projected through 2030, led by electricity transmission, sanitation, logistics corridors and emerging low-carbon fuels.

Renewables remain the backbone of generation growth, with over 25 GW of wind and solar capacity under development – mostly concentrated in the Northeast. However, persistent curtailment and transmission bottlenecks have prompted a shift in project design. Developers are prioritising hybrid configurations that integrate solar, wind and storage solutions to ensure firm supply and optimise dispatch.

A key policy evolution concerns battery energy storage systems (BESS). Brazil is moving towards the creation of a dedicated regulatory framework and a specific auction for storage capacity. The forthcoming mechanism is expected to treat BESS as a system resource, connected to the grid rather than operating “behind the meter”. This approach would allow BESS to participate in capacity and ancillary service markets, enhancing system flexibility and supporting renewable integration.

At the same time, the 2026 Capacity Reserve Auction (LRCAP 2026) is set to reinforce investment in firm generation, including multi-fuel thermal plants capable of co-firing natural gas, biodiesel and hydrogen blends. These assets are attracting infrastructure and private equity investors seeking predictable long-term revenues.

In parallel, port-based industrial clusters such as Pecém and Suape are consolidating Brazil’s position in the green hydrogen and ammonia value chains, supported by R&D initiatives such as FINEP’s Northeast Hydrogen Call. Together, these developments point to a more integrated and resilient infrastructure matrix – balancing renewables, storage, dispatchable capacity and logistics to sustain long-term energy security.

Early-stage ventures in Brazil’s energy and infrastructure sectors remain less common than in mature markets but are gaining in importance, particularly in emerging technologies such as green hydrogen, biofuels, storage and digital infrastructure. The key considerations for establishing and financing these companies involve regulatory complexity, access to long-term capital, and the need for credible industrial or offtake partnerships.

Start-ups and early developers must navigate a multi-layered regulatory environment encompassing environmental licensing, grid access and sectoral approvals. Unlike mature infrastructure assets, early-stage projects typically depend on development capital, venture funding or strategic investors rather than traditional bank finance. Equity funding rounds are often structured through convertible instruments or partnership agreements with industrial players seeking innovation exposure.

Public funding mechanisms have become crucial to unlock this segment. FINEP’s Northeast Call, launched in 2025, exemplifies the government’s push to accelerate pre-commercial hydrogen technologies and port integration projects, among other energy transition enterprises. Other agencies, such as BNDES, are expanding green innovation credit lines tied to decarbonisation and digital efficiency.

Given the capital intensity and long development horizons, early-stage ventures in Brazil often align with state development agencies, port authorities or larger energy groups. The prevailing trend is to anchor financing through industrial collaboration rather than purely financial speculation, fostering projects with tangible scalability and export potential.

Liquidity events for early-stage energy and infrastructure ventures in Brazil commonly take two forms: (i) equity exits, through the sale of development rights or controlling stakes to strategic investors; and (ii) contractual liquidity triggers embedded in financing instruments.

Equity exits occur once projects reach key maturity milestones, such as environmental licensing, grid access or secured offtake, allowing founders to monetise value before full construction. These transactions often involve utilities, infrastructure funds or foreign industrial players seeking local platforms.

On the financing side, venture and project-level instruments increasingly include early maturity or liquidity clauses tied to performance and regulatory risk. In renewables, curtailment exposure, delays in transmission reinforcement or material regulatory changes can trigger early repayment obligations or step-in rights by lenders or strategic investors.

Given these risks, founders and investors must ensure that financing documents clearly define material adverse change provisions, performance thresholds and cure periods. Aligning ESG and technical compliance with lenders’ covenants is now essential to avoid premature liquidity events.

Overall, liquidity in Brazil’s energy start-up ecosystem remains more contractual and event-driven than market-based, reflecting a pragmatic adaptation to sectoral volatility and regulatory uncertainty.

Spin-offs are not yet widespread in Brazil’s energy and infrastructure sectors but are becoming more frequent as corporate groups pursue capital efficiency and regulatory segregation. Traditionally, large utilities, oil and gas companies, and diversified industrial conglomerates operated multiple business lines under a single corporate structure. The current M&A cycle, however, has encouraged corporate separation to unlock value, attract specialised investors and facilitate project financing.

Key drivers include: (i) the need to ring-fence regulatory or operational risks, such as curtailment exposure in renewables or tariff adjustments in regulated assets; (ii) the opportunity to monetise specific portfolios, such as transmission lines or distributed-generation clusters; and (iii) the objective of creating clearer ESG and governance profiles for capital markets or private equity entry.

Spin-offs have also emerged as a tool for energy transition repositioning. Companies are isolating green-hydrogen, biofuel and storage businesses from legacy fossil operations to capture decarbonisation incentives and access concessional finance. This structure is particularly relevant where state-owned or mixed-capital companies seek to attract partners while maintaining control of strategic assets.

Although not yet routine, spin-offs are increasingly viewed as a strategic step preceding M&A rather than purely as a corporate reorganisation exercise, enabling investors to participate selectively in high-growth or regulated segments without assuming group-wide liabilities.

Under Brazilian tax law, spin-offs can be structured as tax-neutral transactions at both the corporate and shareholder levels, provided that certain statutory conditions are met. The key principle is the continuity of the corporate entity and the proportional transfer of assets, liabilities and equity interests between the original and the resulting companies.

To qualify as tax-free, the spin-off must not generate capital gain or result in any effective enrichment of the transferring entity or its shareholders. Assets and liabilities must be transferred at their book values, and the transaction must be properly documented through corporate resolutions, updated balance sheets and filings with the Commercial Registry and tax authorities. Any revaluation of assets or distribution of value to shareholders may trigger taxation.

At the shareholder level, the event remains neutral if there is no change in the proportion of ownership, ie, shareholders of the spun-off company receive equivalent participation in the resulting entity. When proportionality is not maintained, capital gain recognition may occur.

In the energy and infrastructure sectors, spin-offs are often used to isolate regulated or project-financed assets without triggering tax costs, particularly when creating special purpose vehicles for concessions or renewable portfolios. Proper accounting segregation and adherence to book-value continuity are essential to preserve tax-free status.

Spin-offs immediately followed by a business combination are permissible in Brazil and have become a practical tool in the energy and infrastructure market for reorganising assets before a sale or partnership. The structure is often used to separate regulated or capital-intensive assets, such as transmission concessions, port terminals or hydrogen ventures, into dedicated vehicles before integrating them with new investors.

To qualify for tax neutrality, the transaction must present a clear economic and operational purpose, such as improving governance, facilitating financing or aligning regulatory obligations. Brazilian tax authorities closely scrutinise reorganisations that appear motivated solely by tax minimisation. If the spin-off and subsequent combination lack demonstrable business substance, the operation may be reclassified as a taxable transfer, subject to fines and penalties for abusive tax planning.

Corporate approvals, balance sheets no older than 120 days, and registration with the Commercial Registry are required. In regulated sectors, prior authorisation from agencies such as ANEEL, ANTAQ or ANA may also be necessary before completion. Antitrust analysis may also be applicable.

When properly structured and substantiated, this sequence can efficiently separate risks and unlock value while maintaining compliance with tax and corporate regulations.

A typical spin-off in Brazil takes between three and six months to complete, depending on the complexity of the corporate structure, the number of stakeholders involved, and the regulatory sector. The process begins with the preparation of interim balance sheets and supporting valuations, followed by shareholder approvals and filings with the Commercial Registry and, where applicable, regulatory agencies such as ANEEL or ANTAQ.

There is no legal requirement to obtain a prior ruling from the Brazilian tax authority to execute a spin-off. However, taxpayers must ensure that the transaction complies with the legal and accounting conditions for tax neutrality, including the transfer of assets and liabilities at book value and the preservation of ownership proportionality among shareholders.

Although advance rulings are not mandatory, companies may seek formal consultations from the Receita Federal to confirm the tax treatment of specific structures. These consultations are optional and typically take six to 12 months for a response, depending on the complexity of the matter.

In practice, most corporate groups proceed without a ruling, provided that the transaction has a demonstrable business purpose, is properly documented, and does not involve revaluation or distribution of assets that could trigger taxation.

It is relatively common in Brazil for investors to acquire a minority stake in a public company before making a formal takeover offer, especially in sectors such as energy, logistics and infrastructure, where listed vehicles control regulated or concession-based assets. This strategy allows investors to gain market familiarity, signal long-term commitment and facilitate subsequent negotiations with controlling shareholders.

Under Brazilian Securities Commission (CVM) regulation, any investor whose ownership reaches, exceeds or falls below 5% of the voting or total capital of a listed company must immediately notify both the issuer and the CVM. The disclosure must specify the purpose of the investment, indicating whether the acquirer intends to alter control, seek board representation or increase its position.

There is no formal “put up or shut up” regime requiring an investor to make or withdraw a proposal within a defined period. However, insider trading and market manipulation rules are strictly enforced, and any accumulation of shares must be consistent with public disclosures and insider-information restrictions.

Stakebuilding is therefore a legitimate preliminary step towards control acquisitions, but it is tightly monitored by the securities regulator. If the investor subsequently crosses the control threshold, a mandatory tender offer obligation may arise, ensuring equal treatment for minority shareholders.

Under Brazilian securities law, a mandatory tender offer (oferta pública de aquisição – OPA) is required whenever an investor acquires control of a publicly traded company. Control is presumed when the buyer obtains rights that allow it to elect the majority of the board of directors or determine corporate policies, regardless of the exact ownership percentage. In practice, this often corresponds to a shareholding above 50% of the voting capital, but control can also be established through shareholders’ agreements or voting arrangements. The tender offer must be addressed to all remaining voting shareholders.

In addition to control acquisitions, certain corporate events – such as delisting, cancellation of registration, or changes in corporate purpose that materially affect minority rights – may also trigger mandatory offers under specific CVM regulations.

This framework ensures equal treatment and transparency in control transactions and prevents discriminatory premiums being paid exclusively to the controlling block.

The most common structure for acquiring a public company in Brazil is a tender offer, launched pursuant to the rules of the CVM and the stock exchange (B3). The tender offer allows the acquirer to purchase control or delist the target by offering to acquire shares from all shareholders under equal terms and price conditions.

Alternatively, acquisitions can be structured through private share purchases from controlling shareholders, followed by a mandatory tender offer to the minorities. This two-step model remains the market standard in energy and infrastructure, where control blocks are typically concentrated.

Although Brazilian law allows mergers, amalgamations and incorporations of shares as means of combination, these structures are less frequently used for public company acquisitions. The main reasons are procedural complexity, lengthy shareholder and regulatory approvals, and the requirement for independent valuation reports and fairness opinions. Mergers are therefore more common in intragroup reorganisations or between private entities than in open-market control transfers.

Recent practice shows increased use of hybrid structures, in which a tender offer is followed by a merger to simplify post-closing integration. In regulated sectors, prior consent from authorities such as ANEEL or the antitrust authority (CADE) is also necessary, which further extends timing compared to private acquisitions.

In Brazil, acquisitions of public companies, including those in energy, infrastructure and technology, are predominantly structured as cash transactions. Cash consideration remains the preferred mechanism due to its simplicity, clearer valuation, and investor protection under CVM rules. Stock-for-stock transactions are legally permitted but less common, as they require complex fairness opinions, additional disclosure obligations and shareholder approvals, particularly when the acquiring company is not listed in Brazil.

Cash payment is permissible in both tender offers and merger-based transactions, though in practice it is used almost exclusively in tender offers or private control transfers. In mergers, consideration can be paid in shares, cash or a combination of both, provided that all shareholders in the same class receive equivalent treatment.

Brazilian regulations impose a minimum price requirement for takeover offers involving control transfers: the price offered to minority shareholders must be at least equal to the highest value paid per share to acquire control within the preceding 12 months. This ensures equal treatment and avoids discriminatory control premiums.

In deals involving valuation uncertainty, such as renewable portfolios exposed to curtailment risk or early-stage hydrogen ventures, it is increasingly common to use earn-outs or contingent payment mechanisms. These tools align post-closing performance with future regulatory or operational outcomes, particularly where energy dispatch, licensing milestones or carbon-credit monetisation affect long-term value.

Takeover offers in Brazil are subject to strict transparency and equal-treatment rules established by the CVM and the B3 Listing Rules. Common conditions include regulatory approvals, particularly from CADE and, in the case of infrastructure or concession assets, prior consent from sectoral regulators such as ANEEL, ANTAQ or ANA. Obtaining these clearances is usually a condition precedent to closing, rather than to launching the offer.

Another frequent condition is the achievement of a minimum acceptance threshold, typically ensuring that the bidder acquires a controlling interest or reaches the ownership level required to effect a subsequent corporate reorganisation. Material adverse change clauses and conditions linked to accuracy of representations are less common, as Brazilian law emphasises offer certainty once the tender offer is announced.

The offer price conditions and requirements were addressed in 4.4 Consideration and Minimum Price. In short, all shareholders of the same class must receive equal treatment, and the minimum price for control transactions must match the highest price paid to acquire control within the last 12 months.

Regulators generally restrict excessive conditionality that could create uncertainty or mislead investors. As a result, Brazilian tender offers are typically “firm” proposals, with limited scope for discretionary withdrawal once announced.

It is customary in Brazil for the bidder and the target company (or its controlling shareholders) to enter into a transaction agreement in connection with a takeover offer or business combination. The agreement typically governs process co-ordination, representations and warranties, and the conduct of the target’s business during the offer period.

In the case of a public tender offer, the target’s board may agree to support or recommend the transaction, provided that its fiduciary duties to all shareholders are preserved. The target may also commit to customary non-solicitation, information access and co-operation obligations to facilitate due diligence and regulatory filings. However, these commitments must not unduly restrict competing bids, and the board must remain free to evaluate superior offers.

Representations and warranties are generally limited in scope for public companies, focusing on corporate authority, share capital, compliance with disclosure rules and the absence of material litigation. Broader operational or environmental warranties are more common in private M&A transactions, where due diligence is deeper and negotiation more flexible.

Break-up fees and exclusivity undertakings may appear in negotiated control transactions but are scrutinised to ensure they do not hinder shareholder decision-making or discourage competing offers. Overall, Brazilian practice balances contractual certainty with regulatory safeguards for market fairness and board independence.

In Brazil, the minimum acceptance condition for a tender offer typically corresponds to the acquisition of control, which is understood as the ownership of shares conferring the ability to elect the majority of the board of directors or otherwise direct corporate policies. In practical terms, this usually requires acquiring more than 50% of the voting shares, though control may also be achieved through shareholder agreements or voting arrangements.

For voluntary tender offers aimed at delisting or acquiring strategic influence, bidders often set a lower acceptance threshold, such as one-third or two-fifths of the voting capital, depending on the purpose of the transaction. In OPAs for delisting (tender offers for cancellation of registration), CVM regulations require acceptance by at least two-thirds of the holders of free-float shares voting at the specific meeting convened for that purpose.

Minimum acceptance thresholds are used to ensure that the bidder obtains effective control or a sufficient level of influence to implement its intended strategy, avoiding fragmented outcomes that could undermine governance stability. Once the minimum threshold is achieved, the offer can be declared successful and settled in accordance with CVM and B3 procedures.

Brazilian law provides limited mechanisms for forcibly acquiring shares from minority shareholders following a successful tender offer. There is no automatic squeeze-out procedure equivalent to those in some other jurisdictions. Instead, the controlling shareholder must resort to corporate actions governed by the Brazilian Corporate Law (Law No. 6,404/1976) and CVM regulations to consolidate ownership.

After acquiring control through a tender offer, a shareholder that reaches at least 90% of the voting shares of a publicly traded company may initiate an OPA for delisting (tender offer for cancellation of registration) to acquire the remaining free-float shares. This process requires approval by at least two-thirds of the holders of free-float shares that participate in the delisting meeting. Once approved and completed, the company’s registration with the CVM and listing on B3 can be cancelled, effectively allowing the controlling shareholder to become the sole or near-sole owner.

Alternatively, the controlling shareholder may pursue a corporate merger or incorporation of shares, exchanging minority shares for consideration in cash or stock, provided that the transaction complies with fairness and valuation requirements and does not violate minority rights.

While full squeeze-outs are exceptional in Brazil, these mechanisms offer a practical route for consolidating ownership after a control acquisition, subject to robust procedural and valuation safeguards.

Brazilian regulations do not require “certain funds” in the same sense as some common law jurisdictions. However, bidders must demonstrate financial capability to complete the transaction when launching a tender offer. The offeror is legally responsible for ensuring full payment of the consideration to shareholders once the offer becomes effective.

In practice, the buyer itself makes the offer, while a financial institution authorised by the Central Bank of Brazil (Banco Central do Brasil). and accredited by the CVM acts as intermediary and settlement agent. This intermediary must confirm the bidder’s financial capacity and guarantee the proper execution of payments through an escrow account or equivalent mechanism.

If external financing is required, the bidder may announce the offer conditional upon obtaining such financing, provided that the terms and conditions are clearly disclosed in the offer document and that the financing process is at an advanced stage. Nevertheless, conditional offers are uncommon because Brazilian regulators and market practice favour certainty of funds to protect minority shareholders and market stability.

Therefore, while it is not legally mandated, bidders generally secure committed or near-committed financing before launching an offer to ensure credibility and avoid potential liability for non-performance.

Deal protection measures are permissible in Brazil but must be carefully structured to comply with fiduciary duties and minority shareholder protections. The most common protections include break-up fees, matching rights and non-solicitation clauses, which are designed to give bidders a degree of transactional certainty without unduly restricting competitive offers.

Break-up fees are enforceable when proportionate and clearly disclosed. They are typically limited to 1%–3% of deal value, compensating the bidder for expenses if the target withdraws its recommendation or accepts a superior proposal. Excessive penalties may be challenged as abusive or contrary to the public company’s duty to maximise shareholder value.

Matching rights allow the initial bidder to match competing offers within a specified period. These are common in negotiated control transactions but must be structured to ensure that the target’s board can still consider superior bids objectively.

Non-solicitation and confidentiality provisions are standard and aim to prevent active solicitation of competing offers while allowing the board to respond to unsolicited superior proposals. “Force the vote” provisions, by contrast, are rare, as Brazilian governance rules emphasise the board’s continuing fiduciary discretion and shareholder autonomy.

In all cases, the CVM may review deal protections to ensure that they do not inhibit market transparency or fairness in takeover processes.

If a bidder acquires control of a public company in Brazil but does not reach 100% ownership, it may still exercise full managerial and voting control through mechanisms established under the Brazilian Corporate Law. Once control is obtained, typically through ownership of a majority of the voting shares or equivalent rights, the bidder can appoint the majority of directors and officers, approve strategic policies and determine dividend distribution within statutory limits.

Brazilian law does not recognise domination agreements or profit-and-loss transfer arrangements like those found in some European jurisdictions. However, the controlling shareholder can enter into shareholders’ agreements with minority investors to regulate voting rights, governance procedures or tag-along and drag-along provisions, provided they are filed with the company.

In listed companies, minorities holding at least 15% of voting shares may request cumulative voting for board elections, ensuring minimum representation. Independent directors and audit committees under B3’s corporate governance segments (such as Novo Mercado) further balance control and minority protection.

Thus, even without full ownership, a bidder achieving control has broad governance authority under Brazilian law, but must comply with disclosure, fairness and related-party transaction rules to ensure transparency and protect minority shareholders.

It is relatively common in Brazil for bidders to secure irrevocable commitments from principal shareholders of the target company to tender or vote in favour of a proposed transaction. These commitments are particularly important in listed companies with concentrated ownership, where controlling or reference shareholders hold decisive influence over the outcome of the offer.

Such undertakings are typically formalised through support or lock-up agreements, executed prior to the launch of the tender offer. They outline the shareholder’s obligation to tender shares or vote consistently with the bidder’s proposal and often include information and co-operation clauses to facilitate regulatory approvals.

While generally binding, these agreements usually contain a fiduciary out or “superior offer” clause allowing the shareholder to withdraw support if a materially better or legally mandatory competing offer arises. This flexibility aligns with CVM principles requiring fairness and equal treatment of all shareholders.

In public transactions, irrevocable commitments must be disclosed as part of the tender offer documentation. Their enforceability depends on compliance with securities laws, insider-trading restrictions and public disclosure rules.

Overall, these instruments are a standard tool for ensuring deal certainty, while maintaining transparency and competitive neutrality in Brazil’s public M&A environment.

A tender offer for a listed company in Brazil must be filed with the CVM and conducted through an authorised intermediary on B3. The CVM reviews the offering documents for compliance with disclosure, procedural fairness and equal-treatment rules. Although there is no formal “pre-clearance” of the business rationale, the offer cannot be launched to the market without this regulatory filing.

The review period varies with complexity, but in a standard control or delisting offer the market expects a review on the order of several weeks. The CVM may request amendments, additional disclosures or valuation support, especially in delisting or related-party situations. The CVM does not freely set the economics of the deal, but it can challenge or require justification for the offered price in transactions that affect minority protection, such as going-private or cancellation of registration.

Once the offer terms are cleared for publication, the tender timeline follows the rules in the offer materials and applicable CVM and B3 regulations, including notice periods, auction procedures and settlement steps. If a competing offer is announced, the timetable can be extended to allow shareholders to compare alternatives. In practice, the revised timetable and final auction occur on harmonised terms to ensure an orderly process and equal access to improved bids.

A takeover or tender offer in Brazil may be extended if regulatory or antitrust approvals have not been obtained before the expiry of the offer period. Under CVM rules, the bidder may request an extension of the acceptance period or postpone settlement to accommodate pending approvals, provided that the extension is duly disclosed to the market and all shareholders are treated equally. The extension must have a justified purpose and cannot alter the economic terms of the offer.

In practice, most bidders seek to obtain regulatory and antitrust approvals after announcing but before launching the offer. Approvals from authorities such as CADE and sector regulators like ANEEL or ANTAQ are often filed in parallel with the preparation of tender documentation. Launching the offer before approvals are granted is possible but requires clear disclosure that completion is conditional upon such authorisations.

This sequencing ensures transparency while preserving deal certainty. Market practice favours completing all material regulatory reviews prior to settlement to minimise execution risk and avoid post-offer challenges. Overall, extensions are permissible but tightly controlled to maintain predictability and investor confidence in the public M&A process.

Privately held companies in Brazil are typically acquired through share purchase agreements or, less commonly, mergers and incorporations governed by the Brazilian Civil Code and Corporate Law. The transaction structure depends on the company’s size, its regulatory exposure, and whether it operates in a concession-based or strategic sector such as energy, logistics or sanitation.

In most cases, acquisitions are negotiated directly between shareholders and the buyer, with comprehensive due diligence covering corporate, tax, environmental, labour and regulatory aspects. In regulated industries – such as electricity, ports, or water and waste management – prior consent from sectoral authorities (eg, ANEEL, ANTAQ or ANA) is required before closing.

Purchase price mechanisms often include earn-outs, price adjustments and escrow arrangements to manage post-closing risks. Representations and warranties are broader than in public transactions and typically backed by indemnities, insurance or retention accounts.

Foreign buyers must also consider foreign investment registration with the Central Bank (through the Electronic Declaratory Registry of Foreign Direct Investment (RDE-IED) system) and potential currency exchange restrictions on remittances. Tax structuring is another key consideration, as share acquisitions may be subject to capital gains tax, while asset deals can trigger VAT and transfer taxes.

Overall, private M&A in Brazil remains highly contractual, with negotiations focusing on risk allocation, regulatory compliance and post-closing integration in sectors with complex licensing and concession obligations.

Setting up and operating a company in Brazil’s energy and infrastructure sectors is subject to extensive regulatory oversight, varying by subsector and the nature of the activity. Each segment – generation, transmission, sanitation, logistics or ports – requires specific authorisations and licences from federal and state authorities before operations can commence.

In the electric power sector, new companies must obtain authorisation from the National Electric Energy Agency (ANEEL) for generation, transmission or distribution activities, in addition to environmental licences issued by state agencies such as SEMACE or IBAMA. The timeframe for full licensing may range from six months to two years, depending on project complexity and environmental sensitivity.

In transport and port infrastructure, concessions and leases fall under the National Land Transport Agency (ANTT) and the National Waterway Transport Agency (ANTAQ), respectively. In sanitation, regulatory authority lies primarily with the National Water and Sanitation Agency (ANA) and local regulators under the new federal sanitation framework.

Environmental approvals under the National Environmental Policy (Law No. 6,938/1981) and CONAMA regulations are mandatory for nearly all infrastructure projects. For large-scale developments, impact assessments (EIA/RIMA) and public hearings are required, often extending approval timelines.

While the incorporation of a company can be completed within weeks, the operational licensing phase is far more time-consuming and determinative of project feasibility. Co-ordination among environmental, energy and sectoral authorities is therefore essential to mitigate delays and regulatory risks.

The CVM is the primary regulator overseeing M&A transactions involving publicly traded companies in Brazil. The CVM is responsible for enforcing disclosure, transparency and minority shareholder protection rules under the Brazilian Securities Law (Law No. 6,385/1976) and the Corporate Law (Law No. 6,404/1976).

B3, the country’s stock exchange, operates as a self-regulatory organisation under CVM supervision. It monitors compliance with listing rules, corporate governance standards and trading procedures. B3 also manages the public auction and settlement processes for tender offers (OPAs).

In addition to these market regulators, CADE may review M&A transactions that meet antitrust thresholds, while sectoral regulators, such as ANEEL for electricity, ANTAQ for ports and ANA for sanitation, must approve ownership changes involving concession or regulated assets.

Together, these authorities ensure that transactions are transparent, competitive, and compliant with both market and sector-specific regulations.

In general, Brazil maintains an open regime for foreign investment, and there are no broad restrictions on foreign ownership of companies, including in the energy and infrastructure sectors. Foreign investors may hold up to 100% of the equity of Brazilian entities, provided that the investment is properly registered with the Central Bank through the RDE-IED system. This registration is mandatory but not suspensory, meaning it does not require prior approval, as it primarily serves statistical, foreign exchange and repatriation purposes.

However, specific restrictions apply in certain sensitive areas. The most notable limitation concerns ownership of rural land and land located within the border strip (faixa de fronteira), an area extending 150 kilometres inland from national borders, under Law No. 5,709/1971 and its regulations. Foreign individuals, foreign companies, and Brazilian companies controlled by foreign capital are subject to size and location restrictions when acquiring rural property. Such transactions may require prior approval from the National Institute for Colonisation and Agrarian Reform (INCRA) or even from Congress if the acquisition exceeds statutory limits.

Additionally, sectors related to aerospace, nuclear energy, postal services and certain media activities remain restricted or reserved for Brazilian ownership. In all other sectors, including electricity, sanitation, ports and transport, foreign investment is permitted, subject to the same licensing and concession requirements as domestic investors.

Brazil does not have a formal national security review mechanism comparable to regimes such as CFIUS in the United States or FIRB in Australia. However, acquisitions that may affect national sovereignty, strategic infrastructure or defence-related assets are subject to scrutiny under general laws and by specific government bodies.

The National Defence Council (Conselho de Defesa Nacional) may review transactions involving assets located within the border strip, where foreign ownership and certain economic activities are restricted. The purpose of this rule is to safeguard territorial integrity and national security interests.

There are also sectoral controls. For example, companies involved in aerospace, telecommunications, nuclear energy, and port or airport operations may face restrictions on foreign participation or requirements for prior government authorisation. Investments originating from jurisdictions subject to international sanctions may trigger enhanced due diligence by banks and regulators.

Brazil maintains an export control system governed by the Ministry of Development, Industry, Commerce and Services and the Ministry of Defence. The framework restricts the export and transfer of dual-use goods, defence materials and nuclear technologies, consistent with international treaties such as the Nuclear Non-Proliferation Treaty.

Although there is no broad national security approval regime, acquisitions in sensitive sectors are monitored closely, and regulators retain discretion to impose conditions or deny licences if national interest considerations are at stake.

Mergers and acquisitions in Brazil, including takeover offers and business combinations, are subject to mandatory pre-merger notification to CADE when certain turnover thresholds are met.

A filing is required when, in the preceding fiscal year, one of the economic groups involved had gross revenues of at least BRL750 million in Brazil and another group had gross revenues of at least BRL75 million in Brazil. These thresholds are cumulative and apply to the consolidated groups of the buyer and target, not just to the individual entities directly involved in the transaction.

Transactions requiring CADE approval include mergers, acquisitions of control or minority stakes that confer material influence, joint ventures and certain long-term association agreements. The filing must occur before closing, and completion of the transaction is suspended until clearance is obtained. Implementing a deal before approval may result in gun-jumping penalties, including fines and possible transaction annulment.

CADE’s review period is typically 30 to 240 days, depending on complexity. Fast-track procedures are available for transactions with no significant horizontal or vertical overlaps. In the energy and infrastructure sectors, CADE often co-ordinates with regulators such as ANEEL or ANTAQ to assess competitive and market access implications.

Acquirers in Brazil must pay close attention to the country’s labour continuity rules and the high level of worker protection established by the Consolidation of Labour Laws (CLT) and related jurisprudence. In an acquisition, whether through share purchase, merger, or transfer of going concern, all existing employment contracts and labour liabilities automatically transfer to the buyer by operation of law. This principle of successor liability makes thorough labour due diligence essential.

There is no legal requirement for consultation with a works council or similar body prior to a business combination, as Brazil does not have works councils in the European sense. However, labour unions play an active role in collective bargaining and may need to be informed or consulted when a transaction entails operational changes, workforce restructuring or integration of collective agreements.

Union consultation is generally not binding, but maintaining dialogue helps mitigate reputational and industrial relations risks. Certain collective agreements in regulated sectors, such as oil and gas or power generation, may impose specific notice periods or negotiation procedures before implementing structural changes.

Disclosure of labour information during due diligence must comply with data protection rules under the General Data Protection Law (Law No. 13,709/2018), ensuring that employee data is shared only as necessary for transaction purposes.

In summary, buyers should focus on potential contingent liabilities, compliance with collective instruments, and integration planning to ensure a smooth post-closing transition.

Brazil does not impose prior approval requirements by the Central Bank for M&A transactions, but foreign exchange and investment registration rules must be strictly observed. All cross-border equity investments and related payments must be reported through the RDE-IED system, administered by the Central Bank.

This registration is mandatory but declaratory, meaning that it serves information and monitoring purposes rather than that of transaction approval. Once properly registered, the investor gains legal access to the foreign exchange market for the remittance of dividends, repatriation of capital and reinvestment of profits without additional authorisation.

Payments relating to M&A transactions between residents and non-residents must be made through authorised financial institutions operating in the Brazilian foreign exchange market. These institutions verify the accuracy of documentation, including the share purchase agreement, proof of registration, and tax compliance certificates.

Brazilian currency control rules are relatively liberal and are being further simplified under the Foreign Exchange Law (Law No. 14,286/2021), which modernised capital inflows and outflows. However, transactions involving strategic sectors or government concessions may still require prior consent from relevant regulatory agencies (such as ANEEL or ANTAQ) before closing, even though no specific Central Bank approval is needed.

A key legal development in Brazil’s energy and infrastructure M&A environment over the past three years has been the judicial and regulatory consolidation of rules governing control transfers and concession assignments, alongside the emergence of litigation concerning curtailment in renewable generation.

The Superior Court of Justice (STJ) reaffirmed that mergers, spin-offs and share transfers involving concession-holding companies do not require a new public tender, provided that regulatory consent is obtained and service continuity is guaranteed. This precedent has significantly increased transactional certainty for M&A in the electricity, sanitation and logistics sectors, where corporate reorganisations are common as part of portfolio optimisation or foreign investment entry.

Equally important, the past three years have seen the rise of curtailment-related litigation in Brazil’s courts and regulatory agencies, particularly involving wind and solar generators in the Northeast. These cases concern claims for economic compensation due to grid dispatch restrictions that prevent plants from selling their full contracted output. Developers have argued that such curtailment constitutes a regulatory or operational risk beyond their control, seeking damages or relief from performance obligations under power purchase agreements.

While final judicial outcomes remain pending, first-instance and appellate decisions have begun to acknowledge the exceptional nature of curtailment and the need for regulatory reform to clarify risk allocation. The issue has become central to M&A due diligence, as buyers increasingly assess exposure to dispatch constraints when valuing renewable portfolios.

Taken together, the consolidation of corporate-transfer jurisprudence and the ongoing curtailment litigation mark a decisive phase in Brazil’s energy law evolution, strengthening regulatory predictability while highlighting the urgent need for grid and market modernisation.

Brazil’s most significant development in the last three years has been the formal adoption of an integrated decarbonisation agenda that links renewable electricity, low-carbon fuels and industrial policy. The federal government approved the Fuels of the Future Law (Law No. 14,993/2024), which creates mandatory programmes for sustainable aviation fuel, renewable diesel and biomethane, and sets progressive blending and emission-reduction targets in the transport and gas sectors. The same law introduces a regulatory framework for carbon capture and storage and supports synthetic fuels produced from green hydrogen and captured CO2. These measures form part of a broader national transition strategy aimed at lowering lifecycle emissions in hard-to-abate sectors such as aviation, refining, fertilisers and steel.

Brazil has moved beyond pilot announcements and is now attempting to anchor a domestic green hydrogen and green ammonia economy in the Northeast. FINEP launched the Northeast Hydrogen Call to channel concessional funding towards projects tied to export-capable port complexes such as Pecém and Suape. Parallel legislative measures, including the emerging low-carbon hydrogen framework and attribution of regulatory authority to the national oil and fuels regulator (ANP), seek to standardise certification and define which forms of hydrogen and e-fuels qualify as “renewable” or “low carbon” for incentives and offtake. This policy is explicitly industrial: the objective is to create new export corridors, not only to decarbonise domestic power generation.

At the same time, large-scale wind and solar projects in the Northeast have faced curtailment due to transmission congestion, which has generated disputes over compensation and has affected pricing in M&A for renewable platforms. Buyers now demand contractual protection for dispatch risk and evaluate exposure to grid expansion schedules when valuing assets. In response, Brazil is preparing a market design for utility-scale battery energy storage systems. The current direction is to treat storage as a grid resource to be procured through future auctions for capacity and ancillary services, rather than limiting batteries to behind-the-meter optimisation. This is intended to relieve congestion and stabilise renewable revenues.

Brazil has also reintroduced firm thermal capacity as a policy instrument for security of supply. The Ministry of Mines and Energy published guidelines for the 2026 Capacity Reserve Auction, which will contract dispatchable generation able to guarantee availability and, in some cases, operate on alternative fuels such as biodiesel. This shows a recalibration of energy policy: emission reduction remains a strategic priority, but reliability of supply and adequacy of the grid are being treated as matters of public interest, to be remunerated explicitly alongside decarbonisation.

Politically, there is broad federal and state-level alignment around an energy transition that is market-facing rather than purely declaratory. The transition agenda has been folded into Brazil’s wider industrial policy, including the national plan for ecological transformation, climate finance instruments backed by public development banks and regional funds in the Northeast, and incentives for value-added processing of renewable molecules, not only for domestic consumption but for export.

In Brazil, public companies may provide due diligence information to potential bidders, but disclosure must comply with CVM Resolution No. 44/2021, which governs material information and insider trading. Access is permitted when justified by a legitimate negotiation purpose and must not compromise the principle of equal treatment among shareholders. Sensitive or non-public data can be shared under confidentiality agreements, but the company must ensure that the information is limited to what is strictly necessary to evaluate the transaction.

If multiple bidders are involved, the board of directors must ensure equal access to comparable information to avoid any perception of preferential treatment or unfair market advantage. When disclosure could influence the price of securities or the investment decisions of third parties, the company is required to publish a market notice once negotiations reach a material stage.

The board of directors plays a central role in determining the permissible level of due diligence. It must balance transparency with the duty to protect corporate interests and confidential data. Typically, the board authorises a structured process with virtual data rooms, staged disclosure and pre-defined Q&A procedures. In regulated sectors such as energy and infrastructure, additional care is taken to ensure that concession contracts, regulatory filings and environmental licences are disclosed in compliance with agency confidentiality obligations.

While due diligence is a standard step in Brazilian M&A transactions, several legal and regulatory limits apply, particularly in the energy and infrastructure sectors. These restrictions aim to protect confidentiality, personal data, and public-interest information associated with concessions and regulated activities.

The main limitation arises from CVM Resolution No. 44/2021, which prohibits the selective disclosure of material non-public information. Public companies may only share such information under confidentiality agreements and for legitimate negotiation purposes. If the disclosure becomes material to market valuation, the company must immediately inform the market through a public notice.

In regulated sectors, due diligence involving concession agreements, grid data or operational reports must comply with the rules of agencies such as ANEEL, ANTAQ or ANA. Certain documents classified as strategic or sensitive to national infrastructure cannot be fully disclosed without prior authorisation.

Additionally, Brazil’s General Data Protection Law restricts the handling of personal data during due diligence, requiring that information about employees, customers or suppliers be shared only for clearly defined transaction purposes and under secure data-management protocols.

Environmental, tax and labour files are generally accessible but may require formal powers of attorney or consent from the target company. Overall, the approach in Brazil balances investor transparency with regulatory confidentiality, ensuring that diligence does not compromise public-service integrity or market fairness.

In Brazil, a bid for a public company must be disclosed immediately after the decision to proceed becomes material. Under CVM Resolution No. 44/2021, the bidder and the target company are both responsible for ensuring timely and accurate disclosure of information that could influence investor decisions or affect the trading price of securities.

The obligation to make the offer public arises once (i) the bidder’s management or board formally authorises the transaction, (ii) negotiations reach a definitive stage, or (iii) market rumours or abnormal trading activity indicate that inside information may have leaked. In such cases, the bidder or the target must issue a material fact notice (fato relevante) through the CVM and B3 platforms, describing the nature of the offer, the parties involved and the expected next steps.

The detailed terms of the tender offer (OPA) must then be published in the official notice of the offer, which includes the offer price, timetable, conditions and settlement procedures. From that moment, trading in the target’s shares remains subject to disclosure and blackout rules to ensure fairness and avoid insider trading.

In summary, the guiding principle is market symmetry: once the intent or structure of the transaction is capable of influencing investor behaviour, disclosure becomes mandatory and must occur through formal regulatory channels.

In Brazil, when a stock-for-stock takeover offer or business combination involves the issuance of new shares to the target’s shareholders, the transaction must generally be accompanied by a prospectus or equivalent disclosure document in accordance with CVM Resolution No. 160/2022 (which replaced the former public offering rules). A prospectus is required whenever the securities to be delivered are offered to the public in Brazil or will become freely tradable on the Brazilian market.

If the acquirer’s shares are already listed on B3, the exchange and the CVM will review the prospectus and supporting materials to ensure compliance with disclosure and governance standards. When the acquirer is a foreign company, its shares must either be listed on a recognised foreign exchange and registered with the CVM as a foreign issuer, or be represented by Brazilian Depositary Receipts duly authorised for distribution in Brazil.

Certain exemptions may apply when the offer is made exclusively to qualified investors or when the shares issued are restricted securities subject to lock-up periods. However, in cross-border stock-for-stock deals, parties typically prepare a simplified or dual-language prospectus to meet both domestic and international requirements.

Overall, the goal of the prospectus regime is to guarantee transparency and ensure that minority shareholders receive sufficient and symmetrical information with which to evaluate the transaction.

Bidders in Brazil must include financial statements in their disclosure documents when launching a tender offer or business combination, whether the consideration is in cash or shares. The level of detail depends on the transaction type, the bidder’s corporate form, and whether the securities offered are publicly traded in Brazil.

For publicly listed bidders, audited financial statements prepared in accordance with Brazilian Generally Accepted Accounting Principles (BR GAAP), which are fully convergent with International Financial Reporting Standards (IFRS), must be included in the offering materials. If the bidder is a foreign company, the CVM may accept IFRS or the accounting standards of its home jurisdiction, provided that reconciliation or explanatory notes are included where necessary for comparability.

In stock-for-stock transactions, pro forma financial information is typically required to illustrate the combined entity’s financial position and results. The CVM and B3 may also request interim financials if the last audited statements are older than 90 days.

For cash offers, simplified financial disclosures may suffice, but the bidder must still demonstrate financial capability to honour the offer, often supported by audited statements and, when relevant, confirmation from the financial intermediary responsible for settlement.

The overarching objective is to provide shareholders with transparent, verifiable financial data to assess both the bidder’s creditworthiness and the transaction’s economic rationale.

In Brazil, the principal transaction documents – such as the tender offer notice, purchase agreement and shareholder commitments – must be filed with the CVM and B3 as part of the public offer documentation. Confidential annexes may be redacted, but material terms affecting shareholders must be fully disclosed.

Under Brazilian law, directors owe their duties primarily to the company itself, rather than directly to shareholders or individual stakeholders. Their legal obligations, defined in the Brazilian Corporate Law, include the duties of diligence, loyalty and information, requiring them to act in the company’s best interest, with the care expected of a prudent businessperson.

In the context of a business combination, directors must ensure that decisions are grounded in economic rationale, fairness and transparency, particularly when evaluating control transactions that may affect minority shareholders. Although the law does not explicitly impose stakeholder-oriented duties, modern governance practice and B3 listing rules encourage directors to consider environmental, social and governance (ESG) impacts, recognising that long-term corporate value depends on broader stakeholder relationships.

Brazilian boards frequently establish special or ad hoc committees to assist in the evaluation of M&A transactions, especially when potential conflicts of interest arise. While not mandatory by law, this governance practice has become common among listed companies and those adhering to higher B3 governance segments such as Novo Mercado.

Committees typically review transaction terms, oversee fairness opinions and co-ordinate independent due diligence. They enhance the credibility of the board’s recommendation and serve as an additional safeguard for minority shareholders. When controlling shareholders or related parties are involved in the transaction, the formation of an independent committee is considered best practice and may be requested by the CVM to ensure procedural fairness.

Their conclusions are not legally binding but provide a valuable record of diligence and independence, which can reduce potential liability for directors and support regulatory or judicial review if the transaction is later contested.

In Brazilian public companies, the board of directors must play an active and informed role in evaluating, negotiating and approving M&A transactions. The board is expected to safeguard the company’s interests, verify that the proposed transaction serves a legitimate business purpose, and ensure equal treatment of shareholders. While management typically conducts negotiations, the board is responsible for approving key terms, disclosing material information and issuing a recommendation to shareholders.

Boards may actively defend the company against hostile or undervalued offers, provided that their actions align with fiduciary duties and aim to maximise long-term corporate value. Defensive tactics – such as seeking alternative bids or restructuring assets – must be proportionate and transparent.

Shareholder litigation challenging board decisions has increased, particularly in related-party transactions and delistings. Courts and the CVM scrutinise whether directors exercised proper diligence and obtained independent advice. Buyers should therefore expect rigorous governance procedures and possible delays while the target ensures full regulatory compliance.

Given this environment, directors rely heavily on specialised legal and financial advisers to substantiate their decisions and to demonstrate that the transaction process met standards of fairness, transparency and procedural integrity.

In business combinations, Brazilian directors commonly engage independent legal, financial and technical advisers to ensure informed and defensible decision-making. The most frequent external input is a fairness opinion issued by a qualified financial adviser assessing whether the transaction’s economic terms are fair from a financial standpoint.

Legal counsel plays a crucial role in reviewing governance procedures, disclosure duties and related-party considerations under CVM and B3 rules. Environmental and regulatory advisers are often retained in the energy and infrastructure sectors to confirm compliance with concession and licensing requirements.

The use of independent advice helps directors demonstrate diligence and mitigate liability risks. This documentation also serves as evidence that the board’s decision was based on a reasoned assessment, an increasingly important factor in regulatory investigations or shareholder suits. In complex or high-value transactions, the cost of such advice is viewed as an essential governance investment rather than an optional safeguard.