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The Ibovespa rose for the first time in three days, dodging a global rout, as Ultrapar Participacoes SA’s plan for a $635 million acquisition fueled speculation that Brazil is ripe for more deals as the economy rebounds from its worst recession in a century.
Ultrapar, the operator of the Ipiranga chain of gasoline stations, rose the most in eight months and was the biggest contributor to the equity gauge’s advance. The index also rose as commodities erased earlier losses sparked by concerns that the U.K. may leave the European Union. Raw-material producers including miner Vale SA advanced.
Ultrapar joins other Brazilian companies that have announced merger plans in the past two months, after the operator of the country’s exchange moved to combine with a rival and the country’s biggest for-profit college operators discussed a tie-up. The companies are seeking to position themselves for a new wave of growth in Brazil, betting that the government of Michel Temer will be able to shore up the nation’s finances and revive investors’ confidence.
"The fact that big, important companies are eyeing acquisitions is a very good signal for the country," said Raphael Figueredo, an analyst at the brokerage Clear Corretora in Sao Paulo. "We may really be entering a new cycle."
The Ibovespa added 0.5 percent to 49,660.79 at the close of trading in Sao Paulo as 36 of its 59 stocks advanced. Ultrapar rose 4.9 percent after saying Sunday that its Ipiranga unit would buy closely held Ale Combustiveis for 2.17 billion reais, subject to antitrust approval. Vale climbed 1.8 percent.