12/21/2007 14h38

Mergers and acquisitions increase 43% this year

Folha de S. Paulo - 21/12/2007

The number of company mergers and acquisitions in the country increased 43% in 2007, with 677 transactions registered, according to the study released yesterday by the KPMG consulting company. The number of domestic transactions, which involve only Brazilian companies, reached 333 - 82% in relation to 2006. For Claudio Ramos, KPMG's partner and responsible for the research, the data reflects the good performance of the economy. According to him, the fall in the interest rate, stable inflation, credit offer, the increase of consumption and the reduction of the country-risk have influenced the result. The consultant points out the significance of the result of the domestic transactions, which have grown 82%, against an increase of 18% of the purchase operations of Brazilian companies by foreign companies. "What was seen in 2007 was a major move of the performance of Brazil's market conditions over the volatility of the foreign market", he affirms. The largest piece of the mergers and acquisitions are in the area of food, beverages and tobacco, with 66 transactions. Among the food companies that have made acquisitions, Ramos points out those related to the area of cold storage, such as Friboi and Perdigão. Even though they are tied up in third place, the sectors of real estate and shopping malls are pointed by the person responsible for the study as the ones that have grown the most in mergers and acquisitions in 2007. According to Ramos, the sectors are examples of how going public influences the purchase of other companies. "There is no doubt that the development of the capital market powered up the mergers, since it provided the companies the resources they did not have, and they went for the purchases", he concludes. In addition to providing resources for the acquisitions, the stock market is also one of the reasons for the companies to merge or buy others of the same sector.