Large transactions sustained merger and acquisition activity in Brazil in 2025, despite higher interest rates raising the cost of financing, according to data compiled by Dealogic.

Announced deal value reached BRL234bn ($43.06bn) by mid-December, close to the BRL231bn recorded in 2024, Valor reported.

Market participants expect some growth in 2026, though the election cycle may affect transactions, particularly if exchange-rate swings reduce appetite among foreign investors. Brazilian M&A reached a peak of BRL482bn in 2021.

UBS BB investment banking head Anderson Brito said volumes could rise about 10% next year, to around $55bn, with cross-border deals increasing their share. “There is a lot of interest from Europeans and Asians in Brazil,” he said.

Among the largest transactions this year were J&F’s acquisition of Paper Excellence’s stake in Eldorado, the Marfrig-BRF merger creating MBRF, Iberdrola’s purchase of Previ’s holding in Neoenergia and Prio’s acquisition of 40% of the Peregrino and Pitangola operations from Equinor. Motiva’s airport sale and Visma’s purchase of Conta Azul also featured.

Itaú BBA’s Roderick Greenlees said public tender offers leading to delistings added volume and that the energy sector “will continue to be a relevant contributor to M&A volumes in 2026.”

Seneca Evercore data show energy and natural resources accounted for 52% of deal value in 2025. “We believe 2026 could be a better year for M&A, with the Selic reaching lower levels,” said Daniel Wainstein.

Bankers at BofA, Santander, Goldman Sachs, BTG Pactual, Citi and XP also expect activity to improve, with elections influencing timing and structure. “From April onward, deal flow becomes conditioned by the elections,” said Diogo Aragão.