(Recasts to add more details on M&A activity, Credit Suisse outlook throughout)
By Guillermo Parra-Bernal and Tatiana Bautzer
SAO PAULO, Dec 15 (Reuters) - Mergers and acquisitions activity in Brazil measured in deal value will remain stable next year even as the steepest recession in a quarter century weighs down confidence in Latin America's largest economy, Credit Suisse Group AG bankers said on Tuesday.
Corporate takeovers in Brazil's energy and infrastructure industries will help spur M&A volumes as opposed to M&A in materials-related sectors, which are slated to sag, said Fabio Mourão, Credit Suisse's head of investment banking in Brazil, told reporters at a bank event in São Paulo.
According to Mourão, the value of announced M&A transactions could end next year around 150 billion reais ($39 billion), compared with his estimate of about 140 billon reais in 2015. Deal volume comparisons in reais and U.S. dollars have been severely impacted by the real's 35 percent slump this year, he added.
As Brazil wrestles with unemployment and business confidence at multi-year lows, the declining value of assets may keep luring foreign companies and investment funds into the country, Mourão added. This year, the Swiss bank ranked eighth in Thomson Reuters' Brazil M&A rankings in terms of value, after advising on eight deals worth almost $6 billion.
José Olympio Pereira, the bank's chief executive in Brazil, said the economic downturn has driven down valuations, helping somehow narrow the gap between asking prices and bids.
"For the investor who sees Brazil on a long term perspective, conditions have become attractive," Pereira said at the same event.
Local and foreign companies could boost their exposure to Brazil this year through purchases aimed at meeting a specific strategic need, Mourão said. So-called financial sponsors like private equity firms, which are flush with cash, will remain on the prowl to take advantage of declining valuations, he added.
For instance, Devry Education Group Inc agreed on Tuesday to pay 699 million reais for 96 percent of Grupo Ibmec Educacional, a Rio de Janeiro-based business school. Credit Suisse advised Ibmec on the deal.
Initial public offerings could gain traction next year, especially in a segment at the São Paulo Stock Exchange for small- and mid-sized firms, he added. This year, only one company went public in Brazil, the worst equity capital markets performance in at least 12 years, Thomson Reuters data showed.
$1 = 3.8749 Brazilian reais Additional reporting by Reese Ewing in São Paulo; Editing by Andrew Hay