Brazilian M&A powers ahead in 2022

Activity within Brazil’s energy sector—particularly renewables—along with international interest in telco and software have been key deal drivers

Brazil’s M&A scene has been booming, most recently set against a backdrop of political turmoil as a highly contested presidential election tested the country’s resilience.

In 2021, the country recorded its highest annual deal value and volume on record (728 deals valued at US$88.4 billion) and that momentum continued through 2022, with 685 deals worth US$67.5 billion, even as Luiz Inácio Lula da Silva and Jair Bolsonaro fought it out in the polls.

While down slightly year-on-year, the volume of deals in 2022 is still higher than the annual totals of any pre-2021 year on Mergermarket record.

International buyers eye telco and software 

The technology, media and telecom (TMT) sector in Brazil generated the largest number of deals in 2022—a total of 170, overtaking all annual volume totals on record, apart from 2021’s all-time high. Deal value, however, remained somewhat muted at US$6.6 billion, which was not the highest year on record but still above historical averages for the sector.  

The highest valued TMT deal of the year in the country saw Dutch consumer internet group Prosus acquire a final 33.3% stake in the Brazil based online food ordering company iFood from minority shareholder Just Eat Holding Limited, in a deal valued at US$1.8 billion.

The mid-market, meanwhile, saw a flurry of US investment firms actively seeking out local software companies. In April, ID protection startup Acesso Digital raised US$100 million from a group of investors including Goldman Sachs Asset Management, General Atlantic and SoftBank Latin American Fund. Acesso Digital, which offers digital identity authentication solutions such as facial recognition and electronic signatures, saw demand soar during the pandemic in line with the growth of remote work.

And in June, business messaging cloud platform Take Blip announced a US$70 million financing round led by US PE firm Warburg Pincus. The investment is set to fund international expansion, particularly in North America and Latin America, with acquisitions expected in the near future.

Energy firms bet on thermal power

Consolidation in Brazil’s energy sector—particularly electricity generation and renewables—was another major regional deal driver in 2022. Energy, mining & utilities was the second most targeted sector by value in 2022, after industrials & chemicals, with US$17.9 billion in deals announced.

A total of 51 deals took place in the energy sector, specifically—the highest annual figure on record. Dealmaking within Brazil’s burgeoning electrical power industry has been at the heart of this growth, as seen in the highest valued deal of the year: Equatorial Energia acquired Brazilian electricity distribution company CELG Distribuição for US$2.7 billion, from Enel, the Italy based generator, transmitter and distributor of electricity and gas across Europe.  

In another notable deal, Brazilian energy firm ENEVA purchased thermal power plant Celse, one of the region’s largest gas-fired thermoelectric plants, for US$2.2 billion. The purchase will grow ENEVA’s generation portfolio to around 6GW of installed capacity, helping it reach its goal of creating a “gas hub” on the Brazilian coast.

Also, in the second quarter, ENEVA announced the acquisition of Central Geradora Termeletrica Fortaleza (CGTF), a thermoelectric plant operator owned by Enel Brasil, for the sum of US$107 million.  

Hydro and solar receive investment boost

Other renewable energy sources such as hydro, solar and wind power have also attracted increased attention from investors.  

Hydropower currently dominates Brazilian energy production—the World Bank reports that, between 1970 to 2010, hydropower accounted for approximately 88% of the country’s total electricity consumption (compared to a current global average of around 16%).

In January 2022, Latin America-focused private equity (PE) firm Patria Investments agreed to acquire Contour Global do Brasil Participacoes, a renewable electricity firm, from UK-based renewables investor ContourGlobal. The deal, valued at US$318 million, will see Patria Investments gain ownership of nine hydropower plants across Brazil with 168MW of gross capacity.  

In a clear bet on solar energy, meanwhile, Brazilian energy firm Engie expanded its renewables portfolio through its US$119 million acquisition of two Brazil-based solar photovoltaic farms, with a combined capacity of 259.8 MWp. 

Platforms that enable consumers to invest in solar energy are also on the rise, reflecting a boom in solar energy adoption taking place across the country. In March 2022, Brazil-based solar investment platform Solfácil raised US$100 million in a funding round led by QED investors, with participation from Softbank, VEF and Valor Capital Group. This was followed by a US$30 million extension of its Series C round in September. The startup aims to use the investment to compete with banks such as BV and Santander and establish itself as the largest solar energy financier in the country.  

Brazil’s aim of sourcing 45% of its total energy mix from renewable resources by 2030 will require significant growth of the country’s solar energy sector. Domestic solar power association Absolar forecasts rapid growth in solar systems operating in Brazil, with US$10 billion outlined in investments from 2022, as rising electricity prices push consumers to seek alternatives.


Brazil’s economic growth has slowed in line with economic volatility across the globe and rising inflation. Yet, despite clear challenges, the economy surpassed expectations in 2022. In October, the country’s economic ministry announced that the Brazilian economy was expected to grow by 2.5 percent in 2022.

While a global recession and rising inflation rates loom, Brazil continues to be a dealmaking powerhouse within Latin-America, with the ongoing regional push toward renewable energy sources generating even more potential deals in 2023.

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