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What is Selic and how does it impact the market?

The Selic rate, the basic interest rate of the Brazilian economy, directly influences the cost of capital for companies and investors. When the Selic rate falls, as it has been doing in recent months, it becomes cheaper to borrow money, which makes mergers and acquisitions more attractive.

Why is the falling Selic rate good for the M&A market?

• Cheaper financing: With the low Selic rate, companies can finance acquisitions with lower interest rates, making operations more financially viable.
• More capital available: Investors, with fewer attractive fixed income options, seek returns in other investments, such as mergers and acquisitions, increasing the supply of capital in the market.
• Increased risk appetite: Low interest rates encourage risk appetite, both for companies and investors, which can lead to an increase in the number of M&A transactions.

Which sectors are most benefited?

Growing sectors, such as technology, healthcare, and agribusiness, can be the most benefited by the falling Selic rate, as they tend to have a higher potential return for investors.

What to expect for the future?

The falling Selic rate is likely to keep the M&A market heated in Brazil, especially in sectors with high growth potential. However, it is important for companies and investors to conduct careful analyzes before carrying out any transaction, assessing the risks and potential returns of each operation.