The Rise of Brazilian Multinationals

During the 1980s in Latin America, a wave of internationalization took place, which opened the doors to market liberalization and deregulation. However, in the early 1990s, in the absence of technological, managerial and financial assets, major companies in countries like Brazil were unable to compete with top players, thus reversing this regional trend.

 Considering their low competitiveness in international markets, Brazilian companies decided to focus on local markets, a strategy they consolidated with the privatization process of the 1990s. It was only by the later part of that decade that we witnessed a greater involvement of institutional investors and professional managers in Brazilian companies, increasing investments and expansion to others countries.

In the early 2000s, Brazilian multinationals invested more than USD 3 billion. Within 6 years they reached $19 billion in part as a result of mergers and acquisitions of various companies such as Interbrew and Ambev, and Inco and Vale, respectively.

Brazilian multinationals continued to tap into new markets by leveraging low interest rates and excess liquidity in the country, driving companies such as Vale, Embraer, and Embraco to implement business models that combined low costs with a range of attractive products and services, logistics and IT systems tailored to market needs.

Today numerous Brazilian multinationals are listed in international stock markets competing with large OECD companies, in a wide variety of sectors such as mining, oil, steelmaking, aerospace, among others. The publication “Latin American multinationals” digs into several of these successful cases of Brazilian large corporations.