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TTR Data Dealmaker Q&A with Tauil & Chequer Advogados Partners Christian Roschmann and Liv Machado
Tauil & Chequer Advogados Associado a Mayer Brown
Partner in the Corporate and M&A practice at Tauil&Chequer. He has 30 years of experience in cross-border M&A operations, local and international joint ventures and private equity operations, advising companies, funds and financial institutions in their most important operations in Brazil and around the world. Throughout his career, he worked in offices in New York, Frankfurt, Munich and Singapore, in addition to São Paulo. Graduated in Law from the University of Munich, Germany, and the University of São Paulo (USP), he is a program ambassador and member of the selection committee for the German Chancellor Fellowship Program, organized by the Alexander von Humboldt Foundation. He is also vice-president of the Brazilian-German Chamber of Commerce and Industry of São Paulo and senior commissioner for Brazil of LAV – Association for Latin America in Germany (Lateinamerika Verein e.V.).
Master in Business Law, Liv Machado is a partner in the Restructuring and Bankruptcy practice. She has more than 15 years of experience in the area of judicial recovery and reorganization, advising local and foreign clients in credit and judicial recovery, as well as in extrajudicial and insolvency proceedings. Liv also assists investors in acquiring assets and companies in financial difficulties, as well as working on debt restructuring in DIP financing. She is recognized by Chambers & Partners Brazil 2023 in the area of Restructuring and Bankruptcy and is a member of the Latin America Committee, Future Leaders Committee and Fellows Committee of INSOL International.
TTR Data: How would you describe the current situation of the players in the transactional market in Brazil with the current political and economic situation?, What will Tauil & Chequer Advogados main challenges be in terms of M&A deals in Brazil during 2024?
C. R.: At Tauil & Chequer Advogados associated with Mayer Brown, we represent large foreign players interested in the mergers and acquisitions market in Brazil. Therefore, we are always attentive to the local scenario, in Brazil, and globally, thinking about geopolitics as a whole.
Currently, the transactional market in Brazil is facing a challenging environment due to the ongoing political and economic situation. The developments of the Tax Reform and the possibilities of interest cuts, for example, are important variables that can impact M&A market decisions.
On the international scene, factors such as the wars between Russia and Ukraine and Israel and Palestine and expectations about the presidential elections in the United States generate uncertainty for investors. As a result, it is natural for clients to reevaluate where and how they will invest.
In this context, even with the challenges that Brazil’s current situation can bring to foreign investors, the country is once again considered a place to make medium and long-term investments, especially for some sectors of the economy that bring many opportunities, such as agribusiness (due to its importance for global food security) and infrastructure.
Our challenge, as consultants, is to help our clients understand internal politics, how the sectors are regulated and which scenario they fit into, helping them feel comfortable in making decisions to make medium and long-term investments in Brazil.
TTR Data: The renewable energy sector continues to lead the top positions in the volume of M&A transactions in Brazil. As a leader in M&A advisory services in this sector, what does Tauil & Chequer Advogados believe will be the key drivers of consolidation in this sector over the long term?
C. R.: We assess that there are several factors that can contribute to the consolidation of renewable energies. The search for greater energy security, increased awareness of climate change and the need to reduce carbon emissions are factors driving the growth of the sector, especially in Brazil, which has great potential for generating clean energy.
In 2023, for example, 93.1% of the energy generated in the country came from renewable sources, according to data from the Electric Energy Trading Chamber (CCEE). And this attracts the attention of the big players we represent here at the office.
Furthermore, technological advances and falling costs of installing and operating renewable energy projects help to attract more investment, as does the emergence of new “green financing” models, such as green bonds and crowdfunding. This brings new investment possibilities in the sector.
TTR Data: Which other three sectors present the greatest opportunities for international investors in Brazil 2024, and why?
C. R.: In our view, agribusiness, infrastructure and energy are the three sectors that can offer the most opportunities for foreign investors in Brazil this year.
Our country has great potential in agribusiness. And there are many trading companies and companies linked to the agribusiness industry, both in terms of equipment and seeds, that are looking closely at Brazil. This is because there is important space, competence and technology for the sector’s growth.
The infrastructure sector is another segment that attracts the attention of investors. Brazil is seeking investment and financing to improve the country’s infrastructure, which is fundamental for the development of several other sectors of the economy, such as agribusiness. Right now, an important topic that is on the radar is the privatization of ports, which is related to the search for improvements in logistics and infrastructure necessary to meet the country’s import and export demand.
In addition to these sectors, the energy area, especially renewables, also brings important opportunities, as we pointed out previously. Foreign investors have increasingly looked to the country, looking for solutions and opportunities aimed at the energy transition. And Brazil offers the possibility of investing in renewable energy projects that help foreign companies achieve the sustainability goals defined by national and foreign regulatory bodies and so that companies can also acquire carbon credits.
TTR Data: How do you evaluate the Brazilian restructuring market in 2024?
L. M.: Restructuring is an important topic that we follow closely at Tauil&Chequer Advogados associated with Mayer Brown, relying on the experience of Liv Machado, partner who leads the Business Restructuring area.
In our assessment, we understand that the Brazilian restructuring market should remain dynamic and heated in 2024, reflecting the impact of several factors on the financial health of companies, such as economic conditions, political discussions and market trends. Changes in fiscal and regulatory policy and the developments of the new Tax Reform, approved last year by the National Congress, are examples of factors that can affect the financial viability of companies and impact restructuring processes, influencing the strategies adopted by companies and their creditors.
Furthermore, many companies continue to face significant challenges in the post-pandemic scenario, despite the fact that we are witnessing a gradual recovery of the economy. Sectors such as tourism, retail and services have been particularly affected, resulting in an increase in demand for restructuring services.
It is also important to point out that new approaches and financial instruments are emerging to deal with restructuring situations, including turnaround operations, debt restructuring and contract renegotiation.
TTR: How do you evaluate the Brazilian restructuring market in 2024?
C. R.: Restructuring is an important topic that we follow closely at Tauil&Chequer Advogados associated with Mayer Brown.
In our assessment, we understand that the Brazilian restructuring market should remain dynamic and heated in 2024, reflecting the impact of several factors on the financial health of companies, such as economic conditions, political discussions and market trends. Changes in fiscal and regulatory policy and the developments of the new Tax Reform, approved last year by the National Congress, are examples of factors that can affect the financial viability of companies, culminating in restructuring processes, whether extrajudicial or judicial.
Furthermore, there are great expectations of implications in the area due to the imminent approval of Bill 3/2024, which substantially alters Law 11,101/2005, Business Recovery and Bankruptcy Law. Following the trend of reform brought by Law 14,112/2020, which came into force in January 2021, the main objective of the PL is to speed up insolvency processes, expanding the powers of creditors, aiming to improve the institute and speed up the stage payment of credits.
In this scenario, while the interpretation of the provisions introduced by the reform that came into force in 2021 is still being discussed, a new reform is likely to occur, profoundly impacting the restructuring market.
Furthermore, many companies continue to face significant challenges in the post-pandemic scenario, despite the fact that we are witnessing a gradual recovery of the economy. Sectors such as tourism, retail and services have been particularly affected, resulting in an increase in demand for restructuring services.
In this scenario, the tendency is for 2024 to surpass the exponential growth in requests for judicial recovery seen in 2023, with the prospect that the retail sector will be the most affected, followed by agribusiness, both impacted by the increase in the price of inputs and the high cost to obtain credit. Another trend is the increase in the number of requests for extrajudicial recovery, which was observed in 2023 and is expected to continue in 2024.
It is also important to highlight the expectation of an increase in opportunities for financing companies in crisis in 2024, with an even greater use of new approaches and financial instruments, which were a priority in the reform brought by Law 14,112/2020.
TTR Data: What will be the main challenges for Tauil & Chequer Advogados in Brazil in the coming months?
C. R.: The main challenges for the office in the coming months is to keep our team always up to date and ready to meet customer demands. It is important to continue monitoring the M&As scenario and the factors that impact this segment, in order to help our clients navigate this market, which is volatile and challenging, but which also brings important investment and growth opportunities in Brazil.
Portuguese version
Tauil & Chequer Advogados Associado a Mayer Brown
Partner in the Corporate and M&A practice at Tauil&Chequer. He has 30 years of experience in cross-border M&A operations, local and international joint ventures and private equity operations, advising companies, funds and financial institutions in their most important operations in Brazil and around the world. Throughout his career, he worked in offices in New York, Frankfurt, Munich and Singapore, in addition to São Paulo. Graduated in Law from the University of Munich, Germany, and the University of São Paulo (USP), he is a program ambassador and member of the selection committee for the German Chancellor Fellowship Program, organized by the Alexander von Humboldt Foundation. He is also vice-president of the Brazilian-German Chamber of Commerce and Industry of São Paulo and senior commissioner for Brazil of LAV – Association for Latin America in Germany (Lateinamerika Verein e.V.).
Master in Business Law, Liv Machado is a partner in the Restructuring and Bankruptcy practice. She has more than 15 years of experience in the area of judicial recovery and reorganization, advising local and foreign clients in credit and judicial recovery, as well as in extrajudicial and insolvency proceedings. Liv also assists investors in acquiring assets and companies in financial difficulties, as well as working on debt restructuring in DIP financing. She is recognized by Chambers & Partners Brazil 2023 in the area of Restructuring and Bankruptcy and is a member of the Latin America Committee, Future Leaders Committee and Fellows Committee of INSOL International.
TTR Data: Como você descreveria a situação atual dos players do mercado transacional no Brasil com a atual conjuntura política e econômica? Quais serão os principais desafios do Tauil & Chequer Advogados Associado a Mayer Brown em termos de fusões e aquisições no Brasil ao longo de 2024?
C. R.: No Tauil & Chequer Advogados associado a Mayer Brown, representamos grandes players estrangeiros interessados no mercado de fusões e aquisições no Brasil. Por isso, estamos sempre atentos ao cenário local, no Brasil, e global, pensando na geopolítica como um todo.
Atualmente, o mercado transacional no Brasil está enfrentando um ambiente desafiador devido à conjuntura política e econômica em curso. Os desdobramentos da Reforma Tributária e as possibilidades de corte de juros, por exemplo, são variáveis importantes que podem impactar as decisões do mercado de M&A.
No cenário internacional, fatores como as guerras entre Rússia e Ucrânia e Israel e Palestina e a expectativa sobre as eleições presidenciais nos Estados Unidos geram incertezas para os investidores. Com isso, é natural que os clientes reavaliem onde e como vão investir.
Neste contexto, mesmo com os desafios que o atual momento do Brasil pode trazer aos investidores estrangeiros, o país voltou a ser considerado um local para se fazer investimentos de médio e longo prazo, especialmente para alguns setores da economia que trazem muitas oportunidades, como o agronegócio (em função de sua importância para a segurança alimentar global) e a infraestrutura.
Nosso desafio, enquanto consultores, é ajudar nossos clientes a compreender a política interna, como caminha a regulamentação dos setores e em qual cenário eles se enquadram, contribuindo para que se sintam confortáveis na tomada de decisão para fazer investimentos de médio e longo prazo no Brasil.
TTR Data: O setor de energias renováveis continua liderando as primeiras posições do volume de transações de M&A no Brasil. Como líderes em serviços de consultoria em fusões e aquisições neste setor, quais o Tauil & Chequer Advogados acredita serem os principais impulsionadores da consolidação neste setor no longo prazo?
C. R.: Avaliamos que há diversos fatores que podem contribuir para a consolidação das energias renováveis. A busca por uma maior segurança energética, o aumento da conscientização sobre as mudanças climáticas e a necessidade de reduzir as emissões de carbono são fatores que impulsionam o crescimento do setor, especialmente no Brasil, que possui um grande potencial para a geração de energia limpa.
Em 2023, por exemplo, 93,1% da energia gerada no país veio de fontes renováveis, segundo dados da Câmara de Comercialização de Energia Elétrica (CCEE). E isso chama a atenção dos grandes players que representamos aqui no escritório.
Além disso, os avanços tecnológicos e a queda dos custos de instalação e operação de projetos de energias renováveis ajudam a atrair mais investimentos, assim como o surgimento de novos modelos de “financiamento verde”, como green bonds e crowdfunding. Isso traz novas possibilidades de investimento no setor.
TTR: Como você avalia o mercado de restructuring brasileiro em 2024?
L. M.: Restructuring é um tema importante que acompanhamos de perto no Tauil&Chequer Advogados associado a Mayer Brown, contando com a experiência de Liv Machado, sócia que lidera a área de Reestruturação de Empresas.
Em nossa avaliação, entendemos que o mercado de restructuring brasileiro deve continuar dinâmico e aquecido em 2024, refletindo o impacto de diversos fatores na saúde financeira das empresas, como as condições econômicas, as discussões políticas e as tendências de mercado. As mudanças na política fiscal e regulatória e os desdobramentos da nova Reforma Tributária, aprovada no ano passado pelo Congresso Nacional, são exemplos de fatores que podem afetar a viabilidade financeira das empresas e impactar os processos de reestruturação, influenciando as estratégias adotadas pelas empresas e seus credores.
Além disso, muitas empresas ainda continuam enfrentando desafios significativos no cenário pós-pandemia, apesar de estarmos acompanhando uma recuperação gradual da economia. Setores como turismo, varejo e serviços foram particularmente afetados, resultando em um aumento na demanda por serviços de reestruturação.
É importante pontuar também que estão surgindo novas abordagens e instrumentos financeiros para lidar com situações de reestruturação, incluindo operações de turnaround, reestruturação de dívidas e renegociação de contratos.
TTR: Como você avalia o mercado de restructuring brasileiro em 2024?
C. R.: Restructuring é um tema importante que acompanhamos de perto no Tauil&Chequer Advogados associado a Mayer Brown.
Em nossa avaliação, entendemos que o mercado de restructuring brasileiro deve continuar dinâmico e aquecido em 2024, refletindo o impacto de diversos fatores na saúde financeira das empresas, como as condições econômicas, as discussões políticas e as tendências de mercado. As mudanças na política fiscal e regulatória e os desdobramentos da nova Reforma Tributária, aprovada no ano passado pelo Congresso Nacional, são exemplos de fatores que podem afetar a viabilidade financeira das empresas, culminando em processos de reestruturação, sejam extrajudiciais ou judiciais.
Ainda, há grandes expectativas de implicações na área em razão da iminência de aprovação do Projeto de Lei 3/2024 (“PL”), que altera substancialmente a Lei 11.101/2005, Lei de Recuperação de Empresas e Falência. Seguindo a tendência da reforma trazida pela Lei 14.112/2020, a qual entrou em vigor em janeiro de 2021, o principal objetivo do PL é conferir celeridade aos processos de insolvência, ampliando os poderes dos credores, visando a aprimorar o instituto e agilizar a etapa de pagamento dos créditos.
Nesse cenário, enquanto ainda se discute a interpretação dos dispositivos trazidos pela reforma que entrou em vigor em 2021, é provável que ocorra uma nova reforma, impactando profundamente o mercado de restructuring.
Além disso, muitas empresas ainda continuam enfrentando desafios significativos no cenário pós-pandemia, apesar de estarmos acompanhando uma recuperação gradual da economia. Setores como turismo, varejo e serviços foram particularmente afetados, resultando em um aumento na demanda por serviços de reestruturação.
Nesse cenário, a tendência é que 2024 supere o crescimento exponencial dos pedidos de recuperação judicial verificado em 2023, com a perspectiva de que o setor varejista seja o mais afetado, seguido pelo agronegócio, ambos impactados pela majoração do preço de insumos e pelo elevado custo para a obtenção de crédito. Outra tendência é o aumento do número de pedidos de recuperação extrajudicial, que foi observada em 2023 e deverá se manter em 2024.
É importante pontuar também a expectativa de aumento nas oportunidades para o financiamento das empresas em crise em 2024, com uma ainda maior utilização das novas abordagens e instrumentos financeiros, que foram prioridade na reforma trazida pela Lei 14.112/2020.
TTR: Quais serão os principais desafios para o Tauil & Chequer Advogados no Brasil nos próximos meses?
C. R.: Os principais desafios para o escritório nos próximos meses é manter nossa equipe sempre atualizada e pronta para atender às demandas dos clientes. É importante seguir acompanhando o cenário de M&As e os fatores que impactam este segmento, de modo a ajudar nossos clientes a navegar neste mercado que é volátil e desafiador, mas que também traz importantes oportunidades de investimento e crescimento no Brasil.