Foreign investment in Brazil rises again, but should only translate into M&A activity in 2026

(Valor Econômico) Among the ten largest M&A transactions in 2025, foreign buyers were involved in only two, a share far below that of 2023, when they accounted for half of the top deals.

After consecutive declines since February, Foreign Direct Investment (FDI) inflows into Brazil rose again in September, according to Central Bank data compiled by Seneca Evercore and obtained exclusively by Valor. Net inflows totaled US$10.7 billion for the month — the highest volume for the period in the past five years and the strongest result since March 2023, when US$10.8 billion were recorded.

“The investor, especially the American, is more confident in the bilateral relationship between Brazil and the U.S., supported by expectations of a gradual decline in the Selic [the benchmark interest rate] and a more stable Brazilian real,” says Daniel Wainstein, founding partner of Seneca Evercore.

Despite the recovery, these inflows should translate into new mergers and acquisitions (M&A) only throughout the first half of 2026, Wainstein says. That is because such processes tend to be complex and require months to complete.

The firm’s monthly report reinforces this view. In October, the number of M&A transactions fell to its lowest level in five years, totaling 33 deals — fewer even than at the beginning of 2020, at the height of the pandemic.

Overall, 2025 has not been a favorable year for M&A. From January to October, Brazil recorded 530 mergers and acquisitions, the lowest level for the period since 2020. In value terms, the transactions amounted to just over US$44 billion, ahead only of 2023, according to Seneca.

Foreign investor participation has also been muted. Among the ten largest transactions in 2025, they appeared as buyers in only two — a share far lower than in 2023, when they accounted for half of the major deals. “The last quarter should not show much change, but we are confident about a more pronounced improvement throughout the first half of 2026,” Wainstein says.

Even amid softer overall performance, some sectors remain resilient. Energy and natural resources, for instance, continue at record levels and accounted for eight of the ten largest transactions of the year, totaling US$20.2 billion in value.

Published on 11/25/2025 and available at: https://valor.globo.com/empresas/noticia/2025/11/25/investimento-estrangeiro-no-pais-volta-a-subir-mas-so-deve-virar-operacoes-de-fusoes-e-aquisicoes-em-2026.ghtml