Stalling IPO Market To Spark M&A Uptick In Brazil

It seems the woes of the Brazilian IPO market are increasing the scope for M&A activity. We previously identified that in anticipation of concerns over Latin America's largest economy overheating and posing a risk to asset markets, companies were rushing to tap the equities market while the nation's macroeconomic recovery remained credible in the eye of global investors (see, 'Firms Race To Tap Brazilian Capital Market' ( CFW , February 1 2010). While a string of firms have successfully gone to market capitalising on the Bovespa's strong performance, which saw it climb 80% in 2009, the recent correction is to blame for the IPO window rapidly closing. And if the market begins to fall, valuations will likely fall south once again also, making acquisitions more attractive.

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