8.1. Corporate Transactions – M&A (Mergers and Acquisitions)
M&A (Mergers and Acquisitions) transactions encompass the purchase and sale of shares and/or quotas of existing companies, direct investments represented by the subscription of new shares and/or quotas, as well as corporate restructuring transactions such as transformation, merger, consolidation (fusão), and spin-off (cisão).
Corporate transactions are mechanisms that allow business owners to optimize the management of their operations—whether through tax planning, corporate restructuring, or other strategies—and represent an important part of the country’s economy.
According to KPMG, in 2023, a total of 1,505 M&A transactions were recorded. In 2024, there were 1,582 transactions, generating approximately BRL 178 billion, reflecting a slight increase compared to the previous year.
For 2025, as of the first four months of the year, the M&A sector has already generated BRL 56.6 billion, according to the report published by TTR Data.
It is important to note that corporate transactions involving foreign investments in Brazil are subject to electronic registration through the Central Bank of Brazil’s Information System (“SISBACEN”), by means of a declaratory electronic registration (known as SCE-IED – “Foreign Direct Investment Electronic Declaratory Registration System”), in accordance with Brazilian legislation and as further detailed in a specific chapter.
8.1.1. Types of corporate transactions
Brazilian corporate law provides for 4 (four) types of corporate transactions, namely: transformation, incorporation, merger and spin-off.
The types of transactions are provided for in the Civil Code, Book II, Title II, Chapter X, as well as in Law No. 6,404/1976 – Brazilian Corporation Law, in its Chapter XVIII.
The merger, merger and spin-off operations of publicly-held companies or affiliated companies, pursuant to Law No. 6,404/1976, constitute, as a rule, a material fact that must be disclosed to the Brazilian Securities and Exchange Commission and to the market.
In merger, merger or spin-off operations carried out by limited liability companies, the injured creditors may plead in court for the annulment of said operation, within 90 days after the publication of the respective acts (Civil Code, article 1,122).
In merger and merger operations carried out by corporations, the deadline for requesting the annulment of the transaction will be 60 days (Law No. 6,404/1976, article 232). In the case of spin-off operations carried out by corporations, the deadline will be 90 days for annulment of the spin-off of a corporation. (Law No. 6,404/1976, article 233, sole paragraph).
8.1.1.1. Transformation
Transformation is the operation through which a company moves from one type of company to another type, without changing its business structure and without that company being dissolved or liquidated.
This corporate transaction is not intended to change the business activity or the business developed, but to meet reasons of interest of the company’s partners, who have full freedom to choose the most appropriate corporate type for the development of their business.
The transformation also does not result in a change in the company’s legal personality, corporate structure or the company’s assets.
Consequently, there is no succession of rights and obligations, since the transformed company itself will remain as the holder of the same rights and obligations.
Furthermore, there will be no modification or prejudice, in any case, to the rights of creditors, who will continue, until the payment of their credit, with the same guarantees that the previous type of company offered them.
There will, however, be a change in the existing corporate type, and there may also be a change in the degree of liability of the partners, depending on the initial and final corporate type.
In this sense, in view of the possibility of modifying the degree of liability of the partners, combined with the fact that the choice of the corporate type is at the discretion and convenience of the partners, the decision on the transformation is exclusively up to the partners, unless the articles of association or bylaws of the company provide otherwise, and it is not possible for any judicial or administrative authority to question this resolution. Shareholders who oppose the resolution of transformation shall have the right to withdraw or withdraw, under the terms of the applicable legislation.
The transformation of the company can occur to any other type of company provided for by law, whether limited or unlimited liability.
In the transformation, the rules regulating the constitution and registration of the new corporate form to be adopted must be obeyed: the Brazilian Corporation Law for companies and limited partnerships, and the Civil Code for other corporate types.
8.1.1.2. Merger
Incorporation consists of the corporate transaction through which one or more companies are absorbed by another, which will succeed them in all rights and obligations. The merged company or companies will be extinguished and disappear, and its assets and liabilities will be transferred to the acquiring company, which will succeed it in rights and obligations. Thus, there will be universal succession of the company(ies) acquired by the acquiring company, of all the rights and obligations of the former.
The merger will always occur between two or more companies, which may or may not adopt the same corporate types.
Incorporation is a corporate operation widely used in business practice in Brazil. Among others, this operation is widely used in practice for strategic reasons, whether for synergy reasons, through cost reduction, or to increase negotiating power or occupy new markets, or even, for tax reasons, for the purpose of obtaining tax benefits and advantages in the sphere of corporate income tax, especially with regard to the offsetting of tax losses of the developer with profits of the merged company.
The merger must be resolved and approved by both the partners of the acquiring company and the partners of the merged company(ies), by minutes of the meeting or shareholders’ meeting or by amendment of the articles of association, as provided for in the applicable legislation for the corporate type in question.
The partners must also approve the protocol and justification of the merger and the appraisal report of the net equity of the merged company(ies). The protocol and justification of the merger must contain substantially the reasons or purposes of the merger operation to be carried out and the company’s interest in carrying it out, as well as the conditions of the operation. The main objective of this document is informational, with the purpose of demonstrating to the partners that the operation must be carried out to meet the interests of the company.
The appraisal report must mention the criteria for evaluating the net worth of the acquired company(ies), which may refer to book or economic values, as well as the amount that will be absorbed by the acquiring company.
It should be noted that if the merger transaction involves a publicly-held company, under the terms of the Brazilian Corporation Law, the acquiring company must also be a publicly-held company, obtaining the respective registration and, if applicable, promoting the admission of the trading of new shares in the secondary market, as provided for in paragraph 3 of article 223 of said law. The purpose of this rule is to prevent a shareholder of a publicly-held company, by virtue of the transaction carried out, from becoming a shareholder of a closely-held company, and may suffer damages as a result of the reduction in the liquidity of their shareholding.
8.1.1.3. Merger
The merger consists of the corporate operation through which two or more companies unite to form a new company, which will succeed them in all their rights and obligations. Thus, previously existing societies are extinguished and disappear, with the emergence of a new society.
In practice, the merger operation is little used, since the creation of a new company would imply obtaining new licenses and authorizations in the name of the new incorporated company, which depending on the type of activity and the number of establishments can be extremely bureaucratic. Thus, the merger operation through the unification of two or more companies has been recognized as more beneficial (to the detriment of the merger), as it allows the use of tax benefits and advantages, without the need to create a new company, being a more practical and simple procedure than the merger.
The merger operation, as in the merger operation, must also be resolved and approved by the partners, in minutes of the meeting or assembly of partners or amendment of the articles of association, according to the corporate type. In addition, the protocol and justification of the merger must also be approved by the partners of the companies involved, as well as the respective appraisal reports.
Furthermore, as in the case of the merger, the protocol and justification of the merger must describe the reasons or purposes of the merger operation to be carried out and the company’s interest in carrying it out, as well as the conditions of the operation. The appraisal reports must mention the criteria for evaluating the net worth of the merged companies, which may refer to book or economic values.
8.1.1.4. Spin-off
The spin-off consists of the corporate operation through which a company transfers a portion of its assets to one or more companies, already existing or constituted for this purpose.
Because it has been regulated by the legislation in force in a broad and flexible manner, the spin-off operation has a lot of practical use, as it allows the structural modification of the company in order to enable the adaptation of its structure to the requirements of the development of the company’s business. Thus, the spin-off can be used as a mechanism for decentralizing the original company, dividing its assets to other companies, enabling the diversification of investments, among others.
The spin-off may be total, when the entire assets of the spun-off company are transferred and absorbed to other companies. In this case, the spun-off company will be extinguished and disappear, and there will be a succession of its rights and duties to the companies that will absorb the net assets of the spun-off company, in proportion to the amount absorbed. On the other hand, the spin-off will be partial, when only the version to other company(ies) of part of the assets of the spun-off company occurs. In this case, the spun-off company will continue to exist, with only a reduction in its capital stock, to the extent of the net equity transferred to the other company(ies). The obligations and rights not related to the shareholders’ equity transferred and absorbed by the other company(ies) will remain with the initially existing company, now spun off.
Law No. 6,404/1976 stipulates in its article 233 that, in the spin-off with extinction of the spun-off company, the companies that absorb portions of its equity will be jointly and severally liable for the obligations of the extinct company. In addition, the spun-off company that survives and those that absorb portions of its equity will be jointly and severally liable for the obligations of the former, prior to the spin-off.
The act of partial spin-off may stipulate that the companies that absorb portions of the equity of the spun-off company will be liable only for the obligations that are transferred to them, without joint and several liability among themselves or with the spun-off company, and, in this case, any previous creditor may oppose the stipulation, in relation to their credit, provided that they notify the company within ninety (90) days from the date of publication of the spin-off acts.
As in merger and merger operations, the spin-off operation must also be deliberated and approved by the partners, in minutes of the shareholders’ meeting or assembly or amendment of the articles of association, according to the corporate type.
The protocol and justification of the spin-off must also be approved by the partners of the companies involved, as well as the respective appraisal reports.
Likewise, the protocol and justification of the spin-off must describe the reasons or purposes of the spin-off operation to be carried out and the company’s interest in carrying it out, as well as the conditions of the operation. On the other hand, the appraisal report must mention the criteria for evaluating the shareholders’ equity of the spun-off company, which may refer to accounting or economic values, as well as the amount that will be absorbed and transferred to another company(ies).
Lautenschlager, Romeiro e Iwamizu Advogados
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01310-200 – São Paulo-SP
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Fields of practice: contracts, mergers/acquisitions and auditing, corporate restructuring and reorganization, corporate Law, civil and commercial litigation, consumer protection law, labor law, social security law, tax law, among others.