Energy Leads M&A Activity in 2025, with Interest Rates Set to Shape Deals in 2026

(InfoMoney) Between January and November 2025, the total value of mergers and acquisitions transactions in Brazil increased by 18% compared to the same period of the previous year — that is, the aggregate deal value. The number of transactions, however, fell by 25%. The data were compiled by M&A boutique Seneca Evercore at the request of InfoMoney.

“The increase in total deal value is due to a small number of large-scale transactions, concentrated mainly in the energy and natural resources sectors, which include, for example, power generation and distribution companies, oil and gas, pulp and paper, and mining,” explains Rodrigo Mello, founding partner at Seneca Evercore.

The acquisition of an equity stake in Equinor’s offshore Peregrino field by PRIO for US$3.35 billion was the largest transaction of the year, followed by the acquisition of Serena Energia by Actis, in a divestment by Tarpon, for US$2.82 billion. Also within the energy and natural resources sector, the third-largest deal was J&F’s acquisition of Eldorado Brasil, after eight years of dispute with Paper Excellence.

Since 2021, the energy sector has gained increasing relevance in the M&A market, rising from a 10% share of total deal value in 2020 to 54% in 2025. From January to November this year, the total value of transactions in energy and natural resources reached US$28.2 billion, representing a 47% increase compared to the same period last year.

“One of the factors explaining this trend is the more resilient nature of these sectors, which are less exposed to domestic market fluctuations and to the country’s political and economic uncertainties,” Mello notes.

This scenario is not expected to change significantly in 2026. According to Guilherme Steagall, managing partner at 44 Capital, one of the key M&A trends for next year will be consolidation in sectors that are currently highly regionalized — such as certain power generation businesses.

“There are ongoing efforts to consolidate these capabilities. Many solar energy projects, for example, are highly regionalized and locally based. We have seen many funds and other players raising capital specifically to acquire large-scale capacity, particularly when long-term power purchase agreements (PPAs) are in place,” Steagall says.

According to the executive, a higher number of transactions in 2026 should also be concentrated in sectors such as logistics, technology, education, and infrastructure. According to Seneca Evercore’s study, after energy and natural resources, consumer and retail accounted for 14% of deal value, followed by industrials at 9%, transportation and logistics at 8%, and technology at 7%.

Deals in 2026

After another year in which energy and natural resources stood out in Brazil’s M&A landscape, attention is turning to monetary policy. According to analysts interviewed by InfoMoney, interest rate dynamics are expected to affect asset pricing and encourage equity divestments, while a still-elevated Selic rate could make M&A an attractive financing alternative.

Expectations of cuts to the benchmark interest rate, currently at 15% per year, are a central element in market projections for M&A activity in 2026. “It could be a better year, with the Selic potentially reaching lower levels, which could boost asset prices and encourage shareholders to once again consider selling stakes,” says Mello of Seneca Evercore.

Similarly, he notes that lower financing costs could support buyers seeking funding for acquisitions. Market participants currently expect the Central Bank to begin an interest rate cutting cycle as early as the beginning of next year. In the most recent Focus Bulletin, market agents reduced their Selic projection from 12.25% to 12.13%. The report, published on December 15, compiles market expectations for the economy.

Steagall cautions that persistently high interest rates may lead companies to view mergers and acquisitions as an alternative to traditional financing. “It is very difficult to remain independent with interest rates at a 15% level — it is hard to generate returns. The M&A market will be a solution: efficiency gains through consolidation of activities, especially along logistics and production chains. That is the path,” he says.

The 44 Capital executive projects a different deal profile for the next cycle. In his view, 2026 should see more transactions with somewhat smaller deal sizes than in 2025. “Mid-sized companies will play an important role. Of course, there will be new mergers, but this rationale applies especially to mid-sized businesses,” he says. Through November, Brazil recorded 592 transactions in 2025, with total deal value exceeding US$52 billion.

Published on 12/17/2025 and available at: https://www.infomoney.com.br/business/energia-puxa-mas-em-2025-e-juros-devem-ser-determinantes-para-2026/