Alexandre Couto Silva is the founding partner of Couto Silva Advogados. With a focus on publicly and closely held corporations, he specialises in corporate law, M&As, transfers of control, and the sale or purchase of minority stakes. He advises clients in structuring groups of companies, and advises companies in their relationships with investors and business partners. He assisted clients in important arbitration proceedings involving corporate law and disputes among shareholders. He has a law degree, a doctorate and a master’s degree in corporate law from the Federal University of Minas Gerais (UFMG); and a business management degree from the Pontific Catholic University of Minas Gerais (PUC-MG). He is a member of the Brazilian Bar Association (OAB) (Rio de Janeiro, Minas Gerais, São Paulo and Brasília sections) and the Instituto dos Advogados do Brasil - IAB. His native language is Portuguese, and he is fluent in English; and a business management degree from the Pontific Catholic University of Minas Gerais (PUC-MG). He is a member of the Brazilian Bar Association (OAB) (Rio de Janeiro, Minas Gerais, São Paulo and Brasília sections) and the Instituto dos Advogados do Brasil (IAB). His native language is Portuguese, and he is fluent in English.
Questions & Answers
Thought Leaders 2018 - Interview with Alexandre Couto Silva
What attracted you to a career in corporate and M&A law?
From an early age I was influenced by family members working in business, but I have always had passion for law and I graduated from both law school and business school. I was also taught by my family to always be focused on my career, and for that reason, it made sense for me to become specialised in corporate and M&A law. I studied to obtain master’s and doctorate degrees in the practice area. In 2000, I moved to Rio de Janeiro and began to work in various corporate and M&A transactions with the best Brazilian lawyers. In 2012, I decided to open a boutique law firm specialised in corporate and M&A. Today the law firm is also focused on regulations from Brazil’s Administrative Council for Economic Defence (CADE) and the Securities and Exchange Commission (CVM); dispute resolution; arbitration; and labour law, all relating to corporate law and M&As.
What has been your biggest achievement to date and why?
It is difficult to point out a single achievement because I’m proud of my career and proud of having helped a lot of business people in different M&A transactions. Nevertheless, in 2018 one of the M&A transactions involving a joint venture controlled by two banks was chosen as the Brazil Deal of the Year; I was also happily surprised in a ceremony at the Metropolitan Club in New York with the Lawyer of the Year Award, at the M&A Atlas Awards, for the transaction.
What impact has Brazil’s political and economic situation had on the country’s corporate and M&A environment over the past year?
The M&A environment in Brazil was impacted by the political and economic situation, although M&A activity is still occurring. Last year, we participated in some M&A transactions and observed that the valuation of the businesses was deeply impacted, with some companies being negotiated for five, six, seven and even eight times the earnings before interest, tax, depreciation and amortisation (EBITDA). I recollect that in the Brazilian M&A boom of 2006 to 2010, especially in 2007, the companies were being negotiated for 11 and 13 times the EBITDA. Brazilian companies are still undervalued if you compare them with other markets, especially the US market where companies are negotiated for 16 times the EBITDA.
What impact do you expect Brazil’s new government will have on the country’s business and investment landscape? Do you see any specific opportunities in the coming year?
If the new government implements the right adjustments in public expenditure, especially in social security, and privatises some government assets (including state companies, concessions and assets), the confidence of investors in Brazil’s market and economy will be re-established – including the confidence of long-term and institutional investors. With this confidence in the Brazilian market, the undervalued companies in Brazil, when compared with other economies, should offer good opportunities in the coming year. Brazil’s infrastructure sector, including energy, airports, train, roads, ports, also still offers good opportunities for investors.
What are the biggest challenges facing lawyers in your practice area and why?
The biggest challenge facing lawyers in corporate and M&A is the complexity of the deals, which require multidisciplinary knowledge and a pluralist approach, including knowledge of corporate; accounting; tax; contracts; capital markets and competition regulation; negotiation; the business landscape; government policies; and different cultures and languages, especially in cross-border M&As. The lawyer involved in corporate M&As has an important role, which is to achieve the goals of the parties involved in the transaction, and any mistake can pull the deal apart.
M&As play a prominent role in changing the landscape of several industries, consolidating some players or bringing in new ones. A corporate strategy of growth may also require a merger or acquisition, a partnership or joint venture, or even a divestment. In all these scenarios, multidisciplinary knowledge can play an important role in the success of the deal and create value for our clients.
What more could be done to improve Brazil’s corporate environment in your opinion?
To improve the corporate environment, it is necessary to reduce the risk and cost of doing business in Brazil by implementing some improvements to legislation and the local institutional environment. This would include a tax reform, a social security reform and the reduction of bureaucracy and regulatory costs.
Brazil is a consolidated democracy and is governed by the rule of law, but Brazil is not for amateurs. The legal, regulatory and cultural barriers to entry play an important role. Tax and labour laws are complex, and compliance with them is not simple. Organic growth for companies in Brazil is a challenge and M&As are a way to overcome these barriers to entry.
Why did you decide to set up your own firm? What challenges did you face and how did you overcome these?
After 15 years studying and working alongside the best scholars and lawyers in Brazil, I decided to seek a new professional challenge to improve my own skills. I gave a lot of thought to how exactly it would be best to structure a law firm, and decided to set up a boutique firm with a focus on a tailor-made approach for each of our clients.
The transactions are getting more complex and they demand the full attention of the lawyers involved. In some cases, big law firms cannot provide this kind of tailored service. Specialised clients are demanding a sophisticated service and we found our segment in the market. For example, our law firm sometimes works together with other law firms, involving the best lawyers in each practice area in order to achieve client demands in complex deals. Our lean structure allows us to apply our specialised knowledge to any transaction, but also helps us put together the best attorneys in areas that are complementary to ours in order to help clients in difficult deals and disputes.
What advice would you give younger practitioners who one day hope to be in your position?
I would advise them to maintain focus in their life. This is one of the most important lessons that I learned when I was young. Professionals at the beginning of their careers should study hard; be prepared; and they should find and work with a good mentor. The knowledge will create new opportunities. Enjoy the ride. Stay in the present moment. Notwithstanding this, they should pursue their dreams and be resilient. There is no easy way. Do not believe in easy ways.
My personal life could be an example. Although I was encouraged to study business, I decided to study law as well and both areas of knowledge led me to specialise in corporate and M&A law. Together with that knowledge, the mentors that I had throughout my career were important for my professional growth. Business and law have created opportunities for my personal growth and for the achievement of my dreams. Do not expect anything to happen if you are just sitting on the couch.