Brazil is undergoing a political and economic crisis, which is creating unique challenges and opportunities. A critical issue for the interim government (which could turn into a permanent government if President Rousseff is impeached) is how to rebuild investors’ confidence in the country’s economy.
President Temer is addressing this issue by building a strong and reliable cabinet, and launching programs such as the Investment Partnership Program (IPP), focused on developing new projects and on privatizing a large number of assets. We are seeing a lot of opportunities in the M&A area, not only those related to distressed assets or to the favorable exchange rate—which have been trends over the last year—but also those resulting from strategic local divestments and from the announced government privatizations.
The main areas for M&A would include the energy, agribusiness, technology, education, health, and aviation sectors, as well as airport, road, and railroad privatizations and regulated markets. We also expect to continue to see a strong focus on restructuring, dispute resolution, and compliance activities. Finally, as Brazil continues to be a huge market with immense potential for growth, there is an acute need for large infrastructure development. Given that investment into Brazil has continued over the past few years, we believe there will be even greater opportunities for new project work, a revival of entrepreneurism, and support for business innovation and reform.