Banco do Brasil Sees Growing M&A Pipeline Amid Slowing Economy

Banco do Brasil SA, Latin America’s biggest bank by assets, said its pipeline of mergers and initial public offerings has grown to about 30 companies since the bank restructured its advisory business about a year and a half ago.

Three of the deals are IPOs, Mauricio Maurano, the Brasilia-based company’s head of wholesale business, said Friday in an interview in Sao Paulo. In addition to those transactions, private-equity funds managed by Banco do Brasil are evaluating about 10 other purchases, Maurano said.

“Banco do Brasil has been taking advantage of the synergy of its capital-markets and wholesale areas in Brazil and abroad,” Maurano said.

Many companies are looking to combine operations as Brazil’s economic contraction pushes sales lower and costs higher. President Dilma Rousseff has been cutting spending and raising taxes to reduce the fiscal deficit, while the central bank keeps interest rates at a nine-year high to fight inflation. The real dropped 30 percent this year against the U.S. dollar, the worst performance among the world’s major currencies.

Banco do Brasil’s 30-person advisory team works with the firm’s research and private-equity executives to boost the M&A business. The company has advised on four M&A transactions this year, compared with five for all of last year, it said in an e-mailed statement.

Banco do Brasil is coordinating the IPOs of state-owned Caixa Economica Federal’s insurance unit and reinsurer IRB-Brasil Resseguros SA, according to regulatory filings.