US$30.2 Billion Telecom Money Pumped into Brazilian M&A Market

Published By : 06 Jan 2015 | Published By : QYRESEARCH

The Brazilian market and acquisitions market saw the greatest expansion in 2014 in four years. Most businesses in the country have taken full advantage of the affordable asset prices, while telecoms looked for scaling through combinations.

The country’s number of deals increased by 16 per cent in 2014, to US$84.3 billion. This resulted in a 44 per cent of all transactions in Latin America. The boost was primarily driven by large enterprises that have the capacity to reach beyond a slow economy and the volatility of stock prices. Small buyers are not capable of doing that and therefore must wait for a steadier economy.

Brazil’s weaker currency has also made it a favorable destination for foreign businesses.

Banco Itau BBA SA investor Fernando Iunes, said that the investor profiles are looking bleak, but there is still sign of companies taking strategic decisions for the long run. Most of the deals that have been made recently are looking at growth after five, ten, or even fifteen years ahead.

The telecom giants were the ones that began this overhaul that will most probably carry on into 2015. The carriers are looking for ways to cut up expenses in the face of slow user growth.

All similar deal amounted to almost US$30.2 billion in 2014, a stark increase compared to the US$10.7 billion in 2013. The biggest name to add to the total was Telefonica SA from Madrid, which purchased the Brazilian broadband company GVT for US$8.88 billion from Vivendi SA.
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