Brazil

Brazil’s Natura is Avon’s logical final house call

23 May 2019

An equity value around $2 billion is an ignominious end for the famous cosmetics brand. But the Sao Paulo-based buyer, which also owns Body Shop and Aesop, is probably the right one, strategically and geographically. Synergies worth more than 3 times the premium attest to that.

Engie gets the gas but without the gearing

8 April 2019

The French utility’s $8.6 billion deal to buy Petrobras’ Brazilian gas pipelines enables expansion in one of its core areas. Doing so with Canada’s CDPQ limits the extent it needs to push up its debt. That should help keep its new three-year strategy on the road.

Santander’s Latam double-down comes at a cost

3 April 2019

The bank run by Ana Botin wants to raise its return on equity to as much as 15 percent. That looks hard with the UK mired in Brexit, and Europe slowing. Allocating more capital to fast-growing countries like Brazil makes sense, but risks making the business more volatile.

Honeymoon ends early for Brazil’s Bolsonaro

22 March 2019

The far-right president is finding governing harder than firing off incendiary tweets. A Washington meetup with fellow populist Donald Trump was low on substance, key pension reform is struggling and his popularity has plummeted. Even his predecessor’s graft arrest may not help.

Vale can keep pages from departing CEO’s playbook

4 March 2019

Fábio Schvartsman has stepped down weeks after a fatal dam collapse. Waiting for prosecutors to push the issue is bad form. Safety and governance will have to become bigger priorities for the $65 bln Brazilian miner, but many strategic and operational ideas are worth preserving.

3G’s special sauce runs out of financial flavor

25 February 2019

The Brazilian investment firm’s private equity-style penchant for buying companies, larding on debt and slashing costs can work to a point. But without good strategy, management and a plan for an exit, it can cause problems like those now besetting Kraft Heinz.

Guest view: Investors can shore up mining risks

6 February 2019

A $1.3 trln shareholder group wants better standards after Vale’s dam disaster killed at least 100 people. It’s a start. But real change means pushing firms on everything from profitability to climate change, argue Ceres’ Monika Freyman and Upmanu Lall of Columbia University.

Vale’s Brazil dam damage will hurt its peers too

29 January 2019

A second disaster in three years has already cost the mining giant $19 bln in market value. Fines and a management overhaul will likely follow. Fresh scrutiny from stakeholders will hit an industry already grappling with high costs, slow projects and risk-averse shareholders.

Vale disaster threatens Brazil’s deregulation push

28 January 2019

A lethal dam collapse wiped $18 billion off the mining company’s value. It may also derail President Jair Bolsonaro’s plans to bolster business by rolling back environmental and other regulations. Angry Brazilians and skittish lawmakers may want to go in the opposite direction.

Viewsroom: Global elite-lite takes Davos downer

24 January 2019

Pessimism reigns supreme at the annual gathering in the Swiss Alps thanks to trade wars, the U.S. government shutdown and rising populism. Several major leaders stayed away entirely. The event remains a networker’s dream, but self-awareness and problem-solving are sorely lacking.

Brazil’s Bolsonaro clears low Davos bar

22 January 2019

In his first overseas appearance since taking office, the president made a brief and vague sales pitch for a “new Brazil”. Business optimism about the country is running high, and modest changes can help deliver early wins. The longer term presents a more demanding challenge.

Brazil’s new president starts with the easy part

3 January 2019

Ex-army captain Jair Bolsonaro has fired a salvo of temporary decrees, favoring farmers over indigenous people and crimping NGOs. He may do the same to ease gun controls and start vital pension reform. But conquering Congress, which is needed for lasting change, will prove harder.

Brazil will get energy mostly right; Mexico won’t

28 December 2018

New regimes of opposing ideologies in Latam’s two biggest economies will wrestle with balancing 1970s-style nationalism against the need to open up to foreign and private capital to exploit their oil and gas resources. Brazil’s far-right president-elect has the better prospects.

Weed, China, guns and money lead most-read stories

27 December 2018

We promised 2018 would bring “Froth and Frustration,” and that’s just what readers got. Other topics that piqued your interest: Rising populism in Italy, Brazil and France; Broadcom’s doomed bid for Qualcomm and the sale of Refinitiv by Breakingviews’ parent. Plus, fake meat.

Boeing foots the bill for competitive misstep

17 December 2018

The aerospace giant lifted its offer for control of Embraer’s regional-jet business to $4.2 bln. It’s not the greatest deal – rival Airbus got Canada’s Bombardier for a song after Boeing’s aggressive trade tactics backfired. But it’s better to pay up than leave a flank exposed.

Brazil’s Bolsonaro gives China electric shock

5 November 2018

Beijing-backed energy companies hope to invest tens of billions in Brazilian power, but the president-elect has warned of Chinese intentions. Firms like State Grid would bring needed money and expertise, but populist suspicion might overrule commercial logic.

Viewsroom: Europe faces life after Angela Merkel

1 November 2018

Germany’s chancellor won’t seek re-election in 2021 and is stepping down as party chair next month after electoral setbacks. It may herald a rightward swing at home and less EU unity. Plus: investors’ embrace of Brazil’s far-right President-elect Jair Bolsonaro may prove risky.

Investors put excess faith in new Brazil president

29 October 2018

Markets approve of far-right populist Jair Bolsonaro’s election victory. Yet he’s only a recent convert to free-market policies and has odd ideas about the rule of law. Perhaps he can stick to his guns and dragoon Congress to fix the country’s fiscal woes. But it’s a risky wager.

In need of cool head, Brazil braces for opposite

25 October 2018

Far-right ex-army man Jair Bolsonaro looks set to win Sunday’s presidential runoff, riding voter anger over corruption, violence and economic stagnation. Prioritizing pension reform over strongman tactics would better address the nation’s ills. You can’t shoot fiscal deficits.

Brazil choice is how far back to wind the clock

3 October 2018

Elections on Sunday will probably send Jair Bolsonaro, a far-right nostalgist for military rule, and Fernando Haddad, a surrogate for jailed leftist icon Lula, into a two-man presidential runoff. Either would serve Brazilians best by letting his angriest backers down.