Share block sales hit R$15bn, nearing record in Brazil

The largest deal this year took place in January, when Rubens Ometto’s Cosan sold part of its stake in mining giant Vale, moving R$9 billion—the biggest block trade ever on the Brazil’s B3 stock exchange. Investment firm Pátria sold a R$2.2 billion stake in gym chain Smartfit. Telecom operator Vivo held an auction of surplus shares worth R$1 billion. Canadian pension fund CPPIB offloaded R$700 million in GPS. Other transactions involved Carrefour, Clearsale, and Vitru Educação, the latter just last week.

Investment bankers say several shareholders are considering selling stakes through blocks, likely as more companies gain value on the exchange. Because these are fast-moving transactions, companies can launch an offer without prior notice, avoiding market volatility. A decision to sell can be made in one day, with banks quoting the deal—and execution happens at the opening of the next trading session, minimizing exposure to market swings.

Bruno Saraiva, co-head of investment banking at Bank of America (BofA) in Brazil, noted that a recent regulatory change now allows larger block sales without the previously required 48-hour notice, which had previously made many deals unfeasible. In a block trade, a bank offers a firm price for the shares, so the seller knows upfront how much they will receive. But when exposure to the market lasted longer, high risk often dampened banks’ appetite to structure such deals.

“It was a regulatory advance in Brazil. It created more flexibility,” Mr. Saraiva said. Under Brazilian law, block sales can only involve secondary tranches—that is, shares held by existing shareholders—because the law grants current shareholders preemptive rights, a structure only possible through a public offering.

Thus, companies that need to raise cash must turn to follow-on offerings.

Given this year’s tough and volatile market, the trend is for stake sales through exchange auctions. “We should see more block trades than other types of transactions,” Mr. Saraiva said.

With this momentum, volumes are expected to keep growing. Fábio Federici, head of equities at Goldman Sachs in Brazil, sees potential for a record year in 2025 as block trades increasingly become the preferred tool for monetizing investments. Beyond private equity firms’ portfolio sales, which can be auctioned on the exchange, he said controlling shareholders might also sell surplus stakes that do not jeopardize control. Other potential block sellers include funds that bought shares when the market was down, or even credit funds or banks that saw debts converted into shares.

“These are positions that easily surpass R$50 billion,” Mr. Federici said. “There’s a lot of pent-up deal flow,” he added, emphasizing that block sales are the most suited to the current market. “This type of operation is more adaptable,” he stressed.

More deals

Leonard Linnet, head of equities at Itaú BBA, said more deals are likely as stocks appreciate, a movement that has begun with the Ibovespa stock index’s current levels, reflecting the inflow of foreign capital. “It’s already starting to make sense for us to push some transactions,” he said.

Mr. Linnet pointed out that despite the benefits, block sales are not suitable for all companies, being more recommended for highly liquid stocks. In other cases, when a company needs to meet investors through management roadshows, a follow-on offering may be more appropriate.

Fabio Nazari, head of equities at BTG Pactual, added that follow-ons are also the path for companies seeking to raise funds and improve the quality of their shareholder base, as public offerings involve building an order book. He noted that the flow of foreign investors arriving in Brazil after “Liberation Day,” when U.S. President Donald Trump announced tariffs, has driven up many stock prices, creating room to unlock not only block trades but also follow-ons. “Deals are starting to move forward,” Mr. Nazari said.

Contacted for comment, Vitru said that “the sale of shares is a routine procedure, common in the capital markets. Vitru’s governance remains unchanged by this move.” The other companies did not comment.