UPDATE 1-Brazil M&A deals struggle with flagging outlook in 1st qtr-report
(Adds information on fees for the quarter)
By Guillermo Parra-Bernal
SAO PAULO, April 2 (Reuters) - The value of mergers and acquisitions in Brazil in the first quarter slipped to its lowest in two years, as slumping confidence and an economic downturn prevented buyers and sellers from finalizing deals in Latin America's largest economy.
In the year through March 31, companies showed $8.51 billion worth of corporate takeovers in Brazil, according to a Thomson Reuters report on M&A activity released on Thursday. Some 122 deals were announced in the quarter, up from 119 a year earlier.
Corporate tie-ups, restructurings, delistings and spin-offs may gradually gain momentum in coming months as lower asset values and a weaker currency boost the allure of local businesses for multinational firms and investment funds, bankers and M&A lawyers said. But the process will not be linear.
An economy on the verge of recession is helping make some potential targets cheaper but is also widening the gap between asking prices and bids. Worries over President Dilma Rousseff's ability to reverse years of erratic policies are fanning uncertainty and further stretching out that gap, bankers said.
"This year will be a year of complexities as deals should take longer to be concluded," said Alessandro Farkuh, head of M&A for Bradesco BBI. "Good opportunities will arise, but we believe the outlook will remain challenging."
Rothschild's Brazilian unit and Itaú BBA, Itaú Unibanco Holding SA's wholesale and investment banking unit, topped last quarter's Brazil M&A rankings in terms of value and number of deals, respectively.
Rothschild, led by veteran dealmaker Luiz Muniz, advised on three deals worth $5.88 billion during the quarter. Itaú BBA's investment banking unit, led by Jean-Marc Etlin, advised on four deals, including Duratex SA's purchase last month of bathroom fittings maker DuchaCorona Ltda. Continuación...