Emerging Markets Roundup: Brazil



By Antonio Guerrero


The BNDES national development bank and BDMG development bank for the State of Minas Gerais joined forces with Brazilian billionaire Eike Batista and other investors to establish Brazil’s first large-scale semiconductor plant.


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BNDES and Batista’s EBX Group will each take a 33% stake in SIX Semicondutores, while BDMG will hold a 7.2% stake. The plant is slated to begin production in late 2014, manufacturing silicon wafers. Annual revenues are projected at $500 million.


The Brazilian government introduced new tax incentives for automakers to invest in technology and fuel efficiency in a bid to boost competitiveness and fuel auto sales. The automobile sector accounts for 20% of Brazilian economic output. Despite being the world’s fourth-largest auto sales market, it is seventh in terms of production. Carmakers are expected to invest $22 billion in Brazil over the next three years. 


Mergers and acquisitions have fallen to a five-year low, with analysts blaming new antitrust laws, an economic slowdown and mounting government intervention in the economy. Deals totaled $54 billion between January and September, the lowest level since the $35 billion announced for the same period in 2007.   


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