IFLR 1000
The Guide to the World's Leading Financial Law Firms

Business is booming for Brazilian private equity and M&A lawyers. Since the 1990s, investors have been attracted by the country's huge domestic potential, economic growth and business-friendly policies. By April 2011, Brazil had overtaken China as the top target for private equity investment, according to a report by the Emerging Market Private Equity Association. One attorney remarks, "It's no longer BRIC – it's Brazil!"

Although the 2007-08 collapse of the economic systems in Europe and the US caused some disruption, lawyers report that the Brazilian markets have since made a comeback. According to a 2011 report by Bloomberg, Brazil's M&A activity is at a ten-year high. Energy and communications were amongst the hottest sectors, with blockbusters such as the sale of Brasilcel to Telefonica, and the sale of Repsol YPF Brasil to the China Petroleum and Chemical Company. "A number of transactions were really astounding," says one partner.

In particular, attorneys spent much of 2010 anticipating the "mammoth" Petrobras deal. In the world's biggest stock offering, the state-owned energy company raised $67 billion when the transaction finally took place in September that year. The event kept both Brazilian lawyers and their foreign counterparts busy, made international headlines, and was described by President Luiz Inacio Lula da Silva as "a new chapter in Brazil's development".

Practitioners report that consumer goods, mining, real estate, education and entertainment have also been doing well. One partner says that firms and their clients are "looking to market with very good expectations", while another notes that "bankers are very bullish about the equity market". In particular, lawyers have been busy assisting private equity asset managers with obtaining regulatory approval from the Brazilian SEC.

The explosion in activity has been helped by government incentives designed to increase foreign investment, such as the Brazilian Participation Fund (FIP). FIPs are vehicles which hold equity ownership interests in companies under a structure similar to that of a holding company. For foreign investors, they offer the added advantage that income or capital gains are not subject to any Brazilian withholding income tax, as long as certain requirements are met. In January 2011, the government lowered taxes for foreign investments in long-term Brazilian FIEE emerging company funds and FIP holding funds from 6% to 2%.

Whilst attorneys are optimistic that deal flow will continue to increase over the next 12 months, challenges lie ahead. These include long-standing issues such as controlling inflation and currency valuation, and maintaining liquidity in the credit markets.

Barbosa Müssnich & Aragão continues this year as one of a handful of Brazilian firms dominating the M&A market. As a corporate firm with an integrated banking and capital markets practice, its attorneys advise on both hostile and friendly takeovers, with special emphasis on publicly-held companies. The firm also has experience of dealing with regulatory issues, including those governed by the Central Bank of Brazil (BACEN), the Brazilian Securities Commission (CVM), and the National Monetary Council (CMN).

In December 2010, the firm suffered the loss of prominent partner Luciano Puccini Medeiros, who left to set up a private equity fund. However, the firm continues to retain talent such as senior partner Paulo Cezar Aragão, formerly a superintendent of Brazil's Securities and Exchange Commission. A competitior refers to name partner Paulo Aragão as "one of the best lawyers in Brazil".

In a deal which closed in November 2010 and was worth over R$40 billion ($24.6 billion), the firm represented the Diniz family, which controlled Grupo Pão de Açúcar. The transaction involved integrating the assets of retailers Brasileira de Distribuição (Grupo Pão de Açúcar), Casas Bahia, and Globex (Ponto Frio). It followed long negotiations over changes to a merger agreement signed in December 2009, and resulted in retail giant Nova Globex. The firm represented the Diniz family during the negotiations, advised on the corporate aspects of the transaction and handled the regulatory approval process in Brazil.

Other notable work includes advising Arminio Fraga Neto and other quota holders of $6 billion asset management company Gávea Investimentos on its sale to Highbridge Capital Management, which is owned by JPMorgan. The transaction, which closed in November 2010, involved six months of negotiations, and regulatory and tax requirements relating to Brazilian and US law.

One of Demarest's largest deals last year saw the team act for Fibria on the sale of various assets including industrial properties, lands and forests. The combined total came to R$1.5 billion.

Another key client is Pronto Participações who the team has acted on for three deals in the last 12 months alone. These included advise on the acquisition of 60% of the shares Thá Pronto Consultoria de Imóveis, the acquisition of stakes in Pronto Ducati Consultoria de Imóveis and Local Consultoria de Imóveis.

Another highlight saw the team act for GTIS Partners on a joint venture with AGER for the development of various real estate projects in Rio, Minas Gerais and Sao Paolo. The deal could reach $500 million.

Name partner Jorge Eduardo Prada Levy leads the corporate team at the firm who last year received one of its biggest mandates from Steel do Brasil Participações. Partner Ana Cecília Manente acted for the company on the acquisition of Mineração Minas Bahia and a 50% stake in Mineração Peixe Bravo for a combined total of $250 million.

The same client also called in the team as it looked to acquire iron ore exploitation company Mhag.

On the private equity front, Cecília Manente was again involved as the team acted for the Gávea Group on its fourth private equity fund raising, with funds in the realm of $2 billion.

The Lobo & de Rizzo corporate team was last year involved in deals across a wide range of sectors that showed the team's flexibility.

In one of the largest, Rodrigo Delboni Texeira acted for Pearson on a R$613 million acquisition of SEB's learning systems division.

In the fashion sector, a team led by department head José Orlando Arrochela acted for fashion holding company Inbrands on a joint venture agreement with the BRLabels Group.

Finally, name partner Valdo Cestari de Rizzo acted for KPMG Brazil on the combination of its business operations across the company.

Machado Meyer Sendacz e Opice is a leader in the Brazilian M&A and private equity markets. The firm advises a variety of corporate clients, financial institutions and governing bodies.

The firm took a hit in May 2010, when prominent partner Carlos Motta left to join Tauil & Chequer. However, in August 2010, Machado Meyer increased its corporate capacity with the addition of partner Daniella Teixeira de Carvalho Tavares, who has expertise in M&A, project finance and regulatory matters.

The firm advised petrochemical corporation Sinopec in the largest Chinese investment in Latin America to date. Sinopec teamed up with energy company Repsol Brasil, resulting in a business valued at $17.8 billion, in which Sinopec will have a 40% stake. Repsol carried out a capital increase worth more than $7.1 billion as part of the transaction. Due diligence and negotiations on the deal, which closed in December 2010, had to be carried out quickly. This was challenging, considering the various time zones of the parties involved.

Other notable work includes advising telecommunications company Telefónica on its acquisition of Brazilian mobile phone operator Vivo. The €7.5 billion transaction closed in September 2010.

Mattos Filho Veiga Filho Marrey Jr e Quiroga is one of the few Brazilian firms with a specialised M&A practice. The firm seperated its M&A, banking and capital markets teams 15 years ago and has since grown into one of the most active players in the Brazilian M&A and private equity market.

The firm has recently experienced some turnover. Maurício Negri Paschoal and Heber Gomes do Sacramento joined Pinheiro Guimarães in December 2010. In January 2010, Paula Vieira de Oliveira and Marcelo Sampaio Góes Ricupero were promoted to partner. A competitor describes the firm's M&A attroneys as "good people to work with".

In July 2010, the firm advised the Brazilian healthcare provider Qualicorp in relation to its acquisition by The Carlyle Group private equity firm for $1.2 billion.

Other notable work includes advising the financial services firm CETIP Balcão Organizado de Ativos e Derivativos in relation to its acquisition of 100% of the corporate capital of GRV Solutions, valued at $1.3 billion. The deal closed in December 2010 and included a public offering of $553 million in debentures.

Pinheiro Guimarães is a traditional law firm with an impressive M&A reputation. Over the past year, the firm has expanded its practice with the addition of two new partners from Mattos Filho. Maurício Negri Paschoal and Heber Gomes do Sacramento joined its ranks in December 2010.

In a deal which closed in January 2011, the firm advised Diagnósticos da América, the largest private medical diagnostics company in Latin America, on its R$1.8 billion ($1.1 billion) acquisition of MD1 Diagnósticos da América.

Other recent highlights include advising quotaholders of Simão e Gabriades Vestibulares, Gráfica e Editora Anglo, Editora Anglo, and Siga Educacional as sellers in the acquisiton of shares of Anglo Vestibulares. The shares were bought by Greentree Educacional and represented 100% of the quotas issued by the companies of Anglo Vestibulares. The deal was worth R$715 million and closed in September 2010.

With over 800 members of staff, Pinheiro Neto is one of the largest law firms in Brazil. One competitor referred to the firm as "a very finance-driven firm". During the first half of 2011, its attorneys worked on $14.37 billion worth of transactions, according to Thompson Reuters - more than any other Brazilian firm in that period. Pinheiro Neto is also the first Brazilian firm to be certified as carbon neutral.

In October 2010 Lior Pinsky, who was then an associate at Pinheiro Neto, moved to Veirano to become a partner. Carlos Alexandre Lobo also left Pinheiro Neto to join Veirano in January 2011. Competitors say that the firm has "a lot of weight and respect", but believe the losses may be a blow to its practice.

In a transaction which has received widespread media attention, Pinheiro Neto is representing LAN Airlines in a $10 billion deal which combines its operation with TAM, another airline operator, under a single parent entity.

The firm also advised Santander, one of the world's largest banks, on the sale of a $2.7 billion stake in its Brazilian assets. The sale, to government sovereign wealth fund Qatar Holding, made international headlines and closed in October 2010.

As a full-service law firm with a strong international client base, Souza Cescon Barrieu & Flesch continues to be regarded as a strong competitor in M&A and private equity. Souza was Brazil's top-ranking M&A firm in 2010 by both Bloomberg and Thomson Reuters, participating in deals valued at $28.6 billion. The firm regularly does pro-bono work, including its recent advice to the United Nations on human rights issues.

In January 2010, the firm advised petrol company Shell on the establishment of a $12 billion joint venture with Cosan Indústria e Comércio and Cosan which combined certain assets from both companies.

In another blockbuster deal, the firm represented Portugal Telecom on selling its 50% share in Brasilcel, which controls mobile telecom business Vivo, to Telefónica, which previously held the remaining 50%. Vivo has a market share of around 30% and the €7.5 billion ($10.6 billion) transaction required regulatory and antitrust approval.

TozziniFreire is a full-service firm with a vibrant M&A practice. The firm has been involved in some of the largest and most complex acquisitions in recent years.

The firm recently represented beverage company Femsa in the $7,7 billion sale of its Brazilian beer operations to Heineken. During the transaction, FEMSA also sold its Mexican beer operations.

The firm also advised retailers Casas Bahia and Pão de Açúcar Group in the largest-ever deal in the Brazilian retail market. The transaction involved the R$20 billion ($12.3 billion) merger of the companies into a single entity, Globex, controlled by Pão de Açúcar. TozziniFreire acted as deal counsel for both parties.

The M&A team at Trench Rossi is jointly led by Claudia Farkouh Prado in São Paolo and Anna de Mello in Rio.

By far the largest deal the team worked on last year saw the firm advised CPFL Comercialização Brasil as it acquired the quotas of Jantus a major wind farm operator. Another electricity related deal saw Claudia Prado act for Emerson Electric on the sale of its LANDesk business in Brazil to Thomas Bravo.

Another substantial deal saw the team act for ENI as it sold its stake in Gas Brasiliano Distribuidora to Petrobras Gás for $250 million. Gas Brasiliano is responsible for the distribution of natural gas in the northwest region of Brazil.

Veirano's corporate team, which is led by Robson Goulart Barreto, was enhanced last year with the hire of Lior Pinsky and Carlos Alexandre Lobo from Pinheiro Neto.

The firm scored quite a coup last year as it acted for Norwegian aluminium producer Norsk Hydro on the acquisition of the aluminium business of mining firm Vale for $4.9 billion. Included in the deal were Vale's bauxite mining site, various mineral sites and a major slurry pipeline, in addition to the world's largest aluminium refinery. Partner Carlos Americo Ferraz e Castro led the deal which was Norsk's largest ever foreign investment.

In the pharmaceutical sector, the team acted for Farmácia Guarapes in its partial sale to BR Pharma, the pharamaceutical arm of BTG Pactual.

Name partner Ricardo Veirano was also active last year advising Camargo Corrêa in the sale of waste management companies Cavo Serviços e Saneamento and Logística Ambiental de São Paulo to Estre Ambiental and a fund managed by Banco Pactual.