Mergers and acquisitions (M&A) activity for assets subject to crisis or financial difficulty (distressed) has been and should continue to be strong in Brazil.This edition of LS Brazil Outlook addresses some legal challenges involved in these transactions. The position of the seller's creditors in an asset M&A under crisis is always a key factor in the success of the transaction, although commonly underestimated. Sandbagging clauses, which are a way of allocating risks between buyer and seller, must be treated carefully to ensure their validity in the event of litigation. M&As involving public counterparties require sensitivity to social, political and regulatory issues. Competitive aspects, of potential market concentration by the buyer, also need to be considered.
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