Publications

M&A in the energy sector

August 5, 2025

For M&A transactions, the Brazilian energy sector remains one of the most sought-after by the market, despite the market slowdown caused by the rising cost of capital and investor caution in highly regulated and resource-intensive sectors.  

Even with rising capital costs, the expansion of renewable sources and the growth in energy consumption continue to rise, attracting new investments. According to TTR Data, between January and April 2025, Brazil registered 537 investment transactions, totaling more than US$1.4 billion.  

Although there was a decline compared to the previous year, the energy sector remained strong, adding 1,916 MW of installed capacity and setting a record for energy consumption in February. The predictability of power purchase agreements (PPAs) and the flexibility of the free market are reinforcing investor appetite, driving the creation of more sophisticated contractual structures.  

These new structures go beyond formalizing contracts, but also seek to minimize risks, adjust prices, and ensure that the economic return matches the technical delivery of the assets. For early-stage projects, for example, it's necessary to include regulatory frameworks such as payment triggers, technical governance committees, and penalties if results are not achieved.  

In the case of transitional assets, such as thermal plants adaptable to natural gas or hybrid renewable sources, M&A agreements should define detailed technical criteria, focusing on governance and investment parameters. The seller often remains a strategic partner, with clear clauses regarding their rights and exit conditions.  

For expanding assets, the main challenge is separating the existing operation from the project expansion. This may involve creating new SPEs or maintaining the seller as a minority partner, with shared governance and profit-sharing clauses. Environmental and energy regulation becomes even more relevant, requiring an interdisciplinary technical approach.  

Due diligence has also become more in-depth, going beyond verifying ownership and tax compliance. Today, it's essential to examine the asset's regulatory history, grid connection agreements, engineering studies, and environmental reports. Clauses that provide for price adjustments or penalties for license loss are now part of the standard process. 

The growing complexity of M&A agreements in the energy sector reflects the transformation of these instruments, which have ceased to be mere tools for transferring control and have become true strategic plans, structuring the future of assets and aligning risks and responsibilities. 

If you have any questions about the topics covered in this publication, please contact any of the lawyers listed below or your usual Mazzucco&Mello contact.

Antonio Carlos Cantisani Mazzucco

+55 11 3090-9195

Diogo Ferraz

11 3090-9195

This communication, which we believe may be of interest to our customers and friends of the company, is intended for general information only. It is not a complete analysis of the matters presented and should not be considered legal advice. In some jurisdictions, this may be considered lawyer advertising. Please see the company's privacy notice for more details.