Brazil and China in M&As: expanding strategic connections

How Brazilian companies can attract Chinese capital and structure transactions in a secure way, aligned with a long-term vision

In a global scenario of geopolitical realignments and reconfiguration of supply chains, the relationship between Brazil and China takes on a new role.

With the rise of protectionist policies in traditional economies, such as the United States, Brazil is solidifying its position as a strategic partner for Chinese investors interested in long-term assets, particularly in sectors such as energy, infrastructure, and agribusiness.

China seeks to expand its influence through investments in countries with the potential to meet logistical, energy, and food supply demands, and Brazil occupies a central position on this map.

But how can Brazilian companies leverage this growing interest? And what is required to structure M&A transactions with security and feasibility?

Sectors with the most opportunities in 2024

The Brazilian market has seen growth in M&A transactions across several sectors that are also on the Chinese radar.

• Technology: software, fintechs, and e-commerce continue to thrive. Deals like the sale of Pismo to Visa highlight the sector's strong appeal.
• Renewable energy: solar, wind, and biomass have attracted global players such as Equinor and TotalEnergies, sectors aligned with China’s strategic agenda.
• Infraestructure: with a 150% increase in transactions, assets like Sabesp and railway projects are attracting the interest of major Asian groups.
• Agribusiness: focus on fertilizers, seeds, and bioenergy, as seen in the joint venture between BP and Bunge, reinforces Brazil's position as a key supplier.

These sectors are directly aligned with the Belt and Road Initiative (BRI), China's long-term plan for economic and geopolitical expansion. Although Brazil is not formally part of the initiative, it is already actively participating through direct Chinese investments in key infrastructure projects.

What Brazilian companies need to understand about Chinese investors

China operates with a distinct logic from the Western approach. A long-term strategic vision, based on decades rather than quarters, directly influences investment models.

Additionally, many investors are linked to conglomerates with state or state-affiliated involvement, which requires a cautious and multilateral-sensitive approach to negotiations.

Examples such as SPIC Brasil (energy) and projects like the Bioceanic Railway (which connects the Pacific Ocean to the Atlantic via the Port of Aratu in Bahia) illustrate how Chinese presence is tied to critical infrastructure and export logistics.

For Brazilian entrepreneurs, understanding this logic, and aligning their assets with China's geoeconomic interests, can be the differentiator between being selected or not as an investment partner.

How to structure Brazil–China operations securely.

Cross-border operations with Chinese players require a high level of preparation. The regulatory, tax, and cultural context must be addressed with attention from the very early stages.

• Regulation and antitrust: Brazil has a solid regulatory environment, but it requires special attention in cases of market concentration. Transactions with international players must undergo analysis by CADE and other regulatory bodies, such as ANEEL or ANP, depending on the sector.
• Environmental aspects: sectors such as energy and infrastructure are subject to stringent environmental requirements. Brazilian legislation is more stringent than Chinese law in several areas, which can lead to conflicts if there is no prior alignment.
• Tax planning: exchange rate fluctuations, risks of double taxation, and corporate structures need to be clearly designed. A poorly conducted valuation, for example, can be impacted by retention rules or ongoing tax changes.

Negotiations with Chinese investors also tend to be more gradual and relationship-driven. It is common for the process to be extended in order to build trust, especially in strategic sectors or large-scale assets.

How to position yourself as a strategic target

To attract Chinese capital, it's not enough to be available — you must be relevant. This means presenting projects that align with China's key areas of interest: energy security, food security, digital infrastructure, and logistics.

Brazilian companies that position themselves clearly, demonstrating professionalism, strategic planning, and regulatory readiness, have the competitive edge. Moreover, being open to cultural adaptation and building long-lasting relationships is key to establishing long-term alliances.

Looking to attract international investors or execute an M&A deal with Asian players?

Upside Investment has expertise in cross-border transactions and provides comprehensive support in strategic, financial, and legal structuring to ensure security, clarity, and solid results.

Get in touch with our team. We are ready to support your next move.