More acquisitions and fewer offers in 2008
Valor Econômico 01/07/2008
With more than R$ 40 billion in the pocket (US$ 22.7 billion), raised through IPO's in 2007, the publicly-held corporations promise a new record for 2008. However, this time it may not occur through the IPO's but in the market of mergers and acquisitions. New and old companies of the São Paulo Stock Exchange raised money last year and in the previous years aiming at expanding their businesses. Great part of this money will be used, precisely, to buy the competition. The follow-up made by Broadspan Capital, an institution specialized in assisting businesses and preparing companies for the market, shows that acquisitions are among the plans of almost all new companies of the São Paulo Stock Exchange. Practically all companies that issued stocks have undertaken to use at least 25% of what they acquired in the stock market for purchases. There are cases in which this percentage reaches 80%. In accordance with another survey, by KPMG, the record volume of 677 transactions of mergers and acquisitions led by Brazilian companies was registered last year, an amount 43% above the 2006 record. The total of business has been growing year after year and, despite the strong increase of 2007, it is expected that 2008 brings a new historical mark.