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Deputy finance minister Paulo Rogerio Caffarelli has suggested BNDES may face funding cuts |
When Laurent Noual, a corporate development officer at French tyre manufacturer Michelin, presented an acquisition opportunity in Brazil to the company last year, he did not try to disguise Brazil’s problems.
Despite a falling stock market and stagnating economy, Noual was able to convince his management and board to go ahead with an investment of R$1.6 billion ($560 million). He says the purchase of Sascar, a Brazilian trucking fleet-management company, was a means to expand Michelin’s client networks in a country that remains one of its top four markets globally.
“If we are in Brazil, it’s for the long run,” says Noual. “We decided a long time ago that Brazil is not an easy country, but it’s a growing country. […] You have to look beyond the circumstances that you see now.”
Investment bankers say other firms will take a similar view, in spite of low growth across Latin America, as equity issuance falls off and local groups in need of capital switch to M&A. They say even apparent setbacks like a multi-billion-dollar corruption scandal at Petrobras, Brazil’s national oil company, could be drivers of deal flow.
