The Buyer from Abroad

The thesis

In a consolidated sector, the buyer most willing to pay is often outside the country, because it is buying access to a market that the local buyer already has. The price gap is real, but it reaches the seller only if the process is designed to capture it. Currency, structure, approvals and timing enter the negotiation from the outset, not after signing

The synergy only a foreign buyer pays for

A local buyer already active in the sector pays for incremental revenue and for overlapping cost savings. The foreign buyer pays for something the local buyer has no need to acquire: entry into the Brazilian market, a ready-made customer base, the licence, the distribution network and the time it would take to build all of this from scratch

This is why willingness to pay tends to be higher abroad. The value the foreign buyer ascribes to the company includes the cost it avoids, and that cost rarely features in the calculation of those already inside the market

The consequence for the seller is direct. A process that canvasses only local buyers may close at the right price for the domestic market and the wrong price for the market that could in fact pay

Currency between signing and payment

Transactions with foreign buyers are usually negotiated in dollars or euros and settled in reais, and months of regulatory approval elapse between signing and closing. During that interval, exchange rate movements change the amount the seller receives, upwards or downwards

There are three ways to address this, each allocating the risk differently. A price fixed in reais transfers the risk to the buyer. A price fixed in foreign currency transfers it to the seller. And a fixed price with a collar, under which movements beyond a threshold are shared, divides the risk on negotiated terms

The new foreign exchange framework has simplified the mechanics of bringing in the investment.¹ What has not changed is that the choice of who bears the risk must be written into the contract, not settled afterwards

Two approvals, and the timetable they impose

Every transaction that meets the turnover thresholds is subject to CADE's pre-merger control.² When the buyer is foreign, approval is frequently also required in its home country or in other jurisdictions where the parties operate

The reviews run in parallel, but not at the same pace, and the transaction closes only when the slowest is complete. The timetable of a cross-border transaction is built around the lengthiest approval, and it is that period which determines how long the currency exposure remains open

Long-stop date and termination clauses must reflect this scenario. If the foreign approval is delayed, who may walk away, and who bears the cost, is a matter for the contract

The structure that resolves taxation on both sides

Taxation of the seller's capital gain depends on the disposal structure and on the tax residence of the parties, and the difference between structures can be material to the net proceeds the owner takes home.³ With a foreign buyer, double taxation treaties and the rules of the home country also come into play

Selling shares directly, selling through a holding company, or combining an upfront cash payment with a retained stake produce different outcomes. The choice is not purely fiscal, and it also affects the security the buyer requires and the payment timetable

What the foreign buyer asks first

The first concern of a buyer from abroad is almost never price. It is tax and labour contingencies, because Brazilian tax complexity is the risk it is least able to assess on its own. A buyer that does not understand the liability applies a discount to cover it, and that discount is usually larger than the actual liability

The way to neutralise this is to anticipate the answer. Vendor due diligence, carried out before the process is launched, maps the contingencies, quantifies each of them and separates the probable from the remote. The buyer then negotiates on a known figure, rather than on the fear of what it has not seen

How to build the international shortlist

There are three natural candidates. Global consolidators in the sector that do not yet have a meaningful presence in Brazil. Groups that have declared the country part of their expansion plan and have not yet found the right asset. And buyers that have already tried to enter through another transaction and lost, because they know the market and are in a hurry

The approach is sequenced, not broadcast. The confidentiality agreement must set out the governing law and jurisdiction, and the initial materials are circulated on a no-names basis until interest is confirmed

What changes in the process

Due diligence in two languages, with the data room prepared for an auditor unfamiliar with Brazilian accounting. Warranty and indemnity insurance, more common in cross-border transactions, which shifts part of the seller's indemnity risk to an insurer. And an escrow holdback, frequently denominated in foreign currency

None of this prevents the transaction. Distance creates work, not obstacles. What decides whether the foreign buyer's premium reaches the seller is having thought these points through before the first offer arrives

Tiago H. dos Santos, partner in charge, Revenaz Assessoria, September 2026