China’s outbound M&A deal volume in Brazil increased 64% year-over-year to USD 1.7bn in 1H25—the highest amount for the period since 2017, though deal count dropped from five to three deals over the same period.

The deal volume uptick was primarily driven by the purchase of a 70% stake in Vast Infraestrutura by Chinese port operator China Merchants Port Holdings for up to USD 1.07bn, including debt. Vast operates the onshore crude oil transshipment terminal in Rio de Janeiro.

Brazilian logistics company Prumo, backed by UAE-based sovereign wealth fund Mubadala and Washington-based investment firm EIG Partners, will hold the remaining 30% of Vast upon closing.

The second largest Chinese deal in Brazil in 1H25 was Zhejiang-based automotive conglomerate Geely Holding Group acquiring a 26.4% stake in the local subsidiary of French automaker Renault do Brasil for USD 655.2m.

The third transaction is the joint acquisition of the Luiz Gonzaga solar energy complex in northeastern Brazil by the local subsidiary of China’s State Power Investment Corp and Recurrent Energy, a subsidiary of Canadian Solar. The deal value was not disclosed.

Strategic supplies drive dealmaking

China’s intention to have major control over supplies deemed strategic for its local and global expansion has been a key driver of its M&A deals in Brazil, said Marcelo Tommasi, head of M&A and valuations at Crowe Macro Brasil.

“Industries in which China can secure an important supply, like food production and soybean origination, as well as logistics infrastructure to guarantee the transport of these inputs, like ports and railways, are key spaces for M&A”, Tommasi said. Other sectors such as mining and energy have also been on the Chinese radar, he added.

The mining sector, in particular, has gained great relevance in China’s M&A investments in Brazil, noted Daniel Lau, a business advisor and China specialist. “The Taboca and Serrote deals are examples of such interest,” Lau pointed out, adding that he is currently advising a Chinese company looking to buy Brazilian mining assets.

Last November, China’s state-owned company China Nonferrous Metal Mining (Group) agreed to pay USD 340m for Brazilian mining company Mineracao Taboca, the country’s largest producer of refined tin.

In the same month, China’s biggest state-owned mining group, Baiyin Nonferrous, announced that it would enter Brazil through the purchase of Mineração Vale Verde, owned by British private equity manager Appian Capital Advisory, for USD 420m. The mining company operates the Alagoas-based Serrote mine, specializing in copper concentrate production.

Some other sectors that have lately attracted Chinese interest for M&A and greenfield investment opportunities include construction machinery, hybrid/electric vehicles, auto parts, logistics operations and power metering, noted Lau.

BRICS M&A investments

China has also outperformed its other BRICS trading partners in terms of M&A deal volume in Brazil in 1H25—keeping the first position for the same period since 1H23.

The Asian country accounted for 76.6% of the deal value of all BRICS-led M&A investments in Brazil in 1H25, followed by the United Arab Emirates (19.1%) and India (4.2%), according to Mergermarket data.

BRICS comprises eleven major emerging countries: Brazil, Russia, India, China, South Africa, Iran, Saudi Arabia, Egypt, Ethiopia, the United Arab Emirates, and Indonesia.

Zhao Haiying, executive vice president and chief strategy officer of the Chinese sovereign fund China Investment Corporation (CIC), told this news service on the sidelines of the BRICS Business Forum on 5 July 2025 in Rio de Janeiro that CIC “was very confident with Brazil.”

When asked about which Brazilian sectors the sovereign fund is looking to invest in, the executive said CIC looks at infrastructure, energy transition, and electric vehicles, plus other sectors.

Chinese appetite

Although Chinese state-owned companies still play a major role when it comes to M&A investments in Brazil, private players have gradually turned to inorganic means to enter or expand their footprint in the South American country, Tommasi said.

A key difference between Chinese private investors and their counterparts in the US or Europe is that they end up aligning themselves with state-owned companies in a broad acquisition strategy defined by the Chinese government, noted Tommasi.

Like Chinese state-owned companies, private investors also prefer strategic segments with a certain regulatory stability, like fintechs and real estate, Tomassi said, citing Guangdong-based tech giant Tencent as an example. The publicly traded company has invested in Brazil’s digital financial services platform Nubank and Omie, a cloud-based platform offering ERP and CRM solutions for small and medium-sized businesses.

Lau, who visited China in May to meet local companies, agreed that private companies have increasingly turned their eyes to Brazil. Lau met with companies seeking to expand their global footprint as part of the Go Overseas 2025 program sponsored by the central government.

Fierce competition in the domestic market, paired with high entry barriers in other countries like the US, have turned Brazil into a key market for Chinese companies looking to grow abroad, Lau said. “Many [Chinese] companies have already realized that growth will not only be driven by the domestic market,” he pointed out.

Despite such appetite, large projects and M&A deals in key sectors should continue to be led by medium to large-sized Chinese state-owned companies, Lau said.

Chinese companies are expected to invest more than BRL 27bn (USD 4.8bn) in Brazil by 2032, according to a study released in May by the Brazilian Trade and Investment Promotion Agency (APEX). The investments will cover key economic sectors such as mobility, renewable energy, technology, mining and semiconductors. The resources will also be invested in the delivery and fast-food segments.