Mergers & Acquisitions

Labor and social welfare aspects

The Brazilian legislation contains provisions that significantly affect mergers and acquisitons of companies, acquisitions of partnership interests, business lines, brands, assets, etc.

Due to the comprehensiveness of the legislation, in the majority of cases, the acquirer has to respond, solidarily or subsidiarily in relation to the seller, for any tax, labor or social contingencies related to the business acquired, independently of whether they are related to periods prior to the date of acquisition.

For this reason, these transactions should be preceded by specific investigations, to identify and quality contingency risks not revealed in the financial statements of the target company.

KPMG's Tax practice has specially trained professionals with wide experience in this type of investigation. We highlight below some of the services that we provide in this area.

Pre-acquisition due diligence

Directed towards purchasers or parties interested in a join venture, who wish to know the tax, labor and social welfare risks, which will be assumed by them through realization of the transaction. It permits that the contingencies identified are considered in the price negotiation, in the establishment of guarantees or in the identification of alternative negotiating structures, aiming at eliminating or reducing the risk of materialization of contingencies, safeguarding the planned benefits and results.

Pre-sale due diligence

Directed towards companies which to be prepared for sale or joint venture. The preliminary identification of contingency risks - which would be identified in a pre-acquisition due diligence permits adoption of measures to eliminate or reduce the risks (risk of additional tax asessment), greatly facilitating the negotiation process with any interested party.

Structuring the business

The tax burden on operations involving mergers and acquisitions can make the difference between a good or bad transaction. In this sense, we have advised both sellers and buyers (very often, both simultaneously), on the identification of legal alternatives or business structures, which result in a lower tax burden on the transaction or a reduction in the term for recovery of investment made by the buyer.

Post acquisition advisory services:

The main objective of our work in this phase is to review the corporate and operational structures, resulting from the merger or acquisition of companies or businesses, so as to identify alternatives to minimize the tax burden on the activities, increasing competitiveness and profitability and, consequently, reducing the term for return on investment.

If your company is planning to buy or sell a company or a line of business or to form a joint venture, get in contact with us.

For more information

Fax: 55 (11) 2183-3001