Chinese investors renew interest in Brazilian assets

Recent deals involving Chinese buyers include the sale of Vast Infraestrutura, part of Prumo Logística, to China Merchants (CMP). Chinese wind blade manufacturer Sinoma Blade also came close to acquiring Brazilian wind turbine maker Aeris, which is currently navigating a financial crisis.

Late last year, China Nonferrous Metal Mining Co. (CNMC) purchased the tin, niobium, and uranium operations of Peruvian miner Taboca in Amazonas for $340 million. A source noted that a Chinese bidder was also actively involved in the sale of Vale’s energy assets under the Aliança brand.

Specialists believe Chinese investors are now also eyeing Brazil’s data infrastructure, including data centers, driven by the global race to expand capacity amid growing demand fueled by artificial intelligence. Brazil’s availability of land and clean energy has become a key attraction. Critical minerals and renewable energy assets are also expected to be major targets, with a focus on the energy transition.

Bankers say the ongoing trade war between the United States and China could further boost Chinese interest in Brazil.

“Chinese players are involved in the processes,” said Roderick Greenlees, global head of investment banking at Itaú BBA. He added that foreign presence in Brazil’s M&A market has increased this year, and that China’s renewed focus on international markets stems partly from tightened U.S. relations. “Latin America has returned as an alternative,” he said.

The new wave of interest, however, predates the latest tensions. Fabio Mourão, head of corporate clients at BNP Paribas in Brazil, said Chinese interest in traditional sectors like infrastructure has been growing for the past 18 to 24 months, well before the current escalation of U.S.-China trade tensions. “A new front has opened with Chinese investors actively seeking data center opportunities in Brazil,” Mr. Mourão noted.

Trade war impact

Anderson Brito, head of investment banking at UBS BB, recalled that Chinese names were more prevalent in Brazilian M&A between 2009 and 2015, with a decline afterward. Now, he said, there are signs of renewed appetite. Since 2018, when the U.S.-China trade war began, Chinese investment in the U.S. has slowed, pushing investors to explore other regions. “We have several new mandates involving Chinese interest, particularly in mining, infrastructure, and financial services,” he said.

Antonio Coutinho, head of M&A at Citi in Brazil, confirmed greater Chinese participation, especially in mining and infrastructure deals. “It’s not yet a Chinese boom, but there is a moderate uptick in interest,” he said. Mr. Coutinho noted that some newcomers—firms with no previous presence in Brazil—are also entering the market.

The appetite is likely to grow. Túlio Cariello, director of content and research at the Brazil-China Business Council, said that while China focused its investments on the U.S. and Europe in the 2000s, it has shifted toward other markets amid mounting restrictions. He expects that rising tensions with the U.S. will further accelerate this trend. One of Brazil’s main advantages, Mr. Cariello pointed out, is the size of its consumer market. Investments could come through both M&A deals and greenfield projects, he added.

Li Yong Hong, CEO and partner at Yafela Investimento, a Chinese firm specializing in foreign trade and M&A, believes Chinese interest in Brazil will continue to grow, although the first effects will likely be felt in trade before materializing into new investments. He said joint ventures are likely to be a favored route, helping to bridge cultural differences. In Brazil, Yafela has partnered with Volt, and the companies expect to close their first deal soon, said Volt’s founding partner Henrique Faria.