by Pedro Moreira
September 12, 2008
In this decade, the Brazilian economic scenario has provided excellent perspectives and opportunities of investments in the biotechnology sector.
It is a good moment for mergers and acquisitions in biotechnology in Brazil. National and foreign executives and businessman already see the opportunity. As examples within this year, there were two big deals in the fields of agricultural and energetic biotechnology. One of them relates to the acquisition of 50% of the joint venture of Brazilian companies Santelisa Vale and Grupo Maeda by British company British Petroleum, for ethanol production, having investments of R$ 1.66 billion in sugar and ethanol technologies. The other relates to the purchase of 100% of the assets of the Brazilian subsidiary of North-American company Exxon Mobil by the Brazilian company Cosan, whose sale reached R$ 1.3 billion.
Among the technologies acquired in the mergers and acquisitions operations, stand out agrochemical, transgenic, food, phytopharmaceutical, phytocosmetic and biofuel products and process, wherein the most relevant vegetable sources currently in focus are: sugar cane, corn, soy, cotton and regional fruits
This current scenario and its perspectives of improvement are supported in a group of legislations of Intellectual Property and technological innovation, and economic measures and policies of productive development and innovation.
Brazil encompasses legislations such as: Industrial Property Law (9,279/96), Plant Variety Protection Law (9,456/97), Provisional Measure (2,186-16/01) – based on the Convention on Biological Diversity; Seeds and Seedlings Law (10,711/03); Innovation Law (10,973/04), Genetically Modified Organisms Law (11,105/05), “Good Law” (11,196/05), and their respective regulations that provide means to evaluate and conduct such procedures.
In the first half of this year, the Federal Government launched a new “Productive Development Policy” providing inter alia public financing of over R$ 251.6 billion, tax exemptions, incentives for specific sectors of the economy, stimulation for exporting and attractive measures for foreign companies.
The acquisition of one company by another and the consequent exploitation of the acquired technology comprise a complex operation. Trademarks, domain names, patents, plant varieties and all kind of Intellectual Property asset, including trade secrets/unfair competition and access to the Brazilian genetic heritage, must be subjected to special attention and consideration.
According to a recent research carried out by the Hay Group consulting, approximately 70% of the mergers and acquisitions of the Brazilian companies are planned and carried out to expand sales and market share. The most significant result of these transactions is directly linked to the appropriation and incorporation of the Intellectual Property assets.