Brazil, which has the second-largest number of Italian companies outside Italy, after the United States, is no longer seen by Italian investors merely as an export destination. Instead, the country has taken a central position in the expansion plans of Italian companies across Latin America.

Until recently, the predominant strategy for Italian capital in technology and industry was to follow the traditional playbook: establishing subsidiaries from the ground up and focusing on serving the ecosystem of more than 1,100 Italian companies already established in Brazil.

The strategy was reinforced by the large number of Italian companies already operating and thriving in Brazil. Italian giants such as Enel, TIM, and ASTM Group, through EcoRodovias, generated a combined R$83.1 billion (€14 billion) in revenue from their Brazilian operations in 2025. Other major Italian companies, including Pirelli, Luxottica, and Almaviva, also have significant operations and revenues in the country, although they do not publicly disclose their Brazilian figures.

Fiat, for example, now part of Stellantis, sells five times more cars in Brazil than in Italy and has been the country’s best-selling brand for the fifth consecutive year. Stellantis alone generated more than R$85 billion (€15 billion) in revenue from its South American operations in 2025, with Brazil accounting for most of the figure.

This dynamic is now changing, with Italian companies and investors choosing another path to expand their presence in Brazil: mergers and acquisitions.

Examples include Almaviva, an Italian technology company that acquired Brazilian multinational VIVIT, a provider of cloud computing, cybersecurity, and software services to more than 10 Latin American countries, in a deal worth around R$1.5 billion (€250 million).

The company also acquired a 50% stake in Magna Sistemas, another Brazilian IT company, for €64 million. The transactions made Almaviva the second-largest company in the sector by revenue in Brazil in just two years, while strengthening its presence in cloud services, cybersecurity, and artificial intelligence (AI).

Other examples include Zucchetti, an Italian company specializing in business software, which has revenue of more than €1 billion in Italy and has made around a dozen acquisitions in Brazil, including Compufour, D4Sign, and Grupo Hive/Omnibees. The transactions have totaled approximately R$1 billion (€170 million) in investments.

Meanwhile, Lynx, a technology company with a strong presence in banking and finance, insurance, and energy and utilities, acquired Ímpar, a company specializing in digital transformation and Microsoft Azure, in what became the largest international acquisition in Lynx’s history.

The shift is affecting different sectors, but is particularly visible in technology and services. Italian capital is no longer viewing Brazil merely as a sales market, but increasingly as an operational base for Latin America and a more integrated extension of its European operations.

This means Italian companies are increasingly looking at South America as an extension of their operations back home, seeking to connect the two regions. Transnational projects such as the EllaLink submarine cable, which directly connects Europe and Brazil, are part of this infrastructure, providing connectivity between the two regions while also strengthening digital sovereignty.

Italian companies are also exploring new technology-based business models in the region. TIM, for example, is evaluating becoming an artificial intelligence-as-a-service provider, offering companies an integrated package that can range from data center infrastructure to the final delivery of AI processing.

South America is part of this strategy, among other reasons, because it allows companies to keep sensitive data within sovereign territory, reducing the need for information to travel through other countries or third-party providers in the United States, China, and elsewhere.

According to the Câmara Ítalo-Brasileira de Comércio, Indústria e Agricultura (Italcam), Italian companies have announced plans to invest around R$90 billion in Brazil, equivalent to approximately €15 billion. Part of this capital is expected to flow into new mergers and acquisitions as well as direct investments in the country.

The New Push From the EU-Mercosur Trade Deal

This trend is likely to accelerate with the new EU-Mercosur trade agreement, which began taking effect in May 2026.

The agreement is expected to eliminate tariffs between the two blocs. For Mercosur, the treaty includes the immediate elimination of tariffs on 802 products in the machinery and equipment sector, while tariffs on around 5,000 products are expected to be reduced over implementation periods ranging from immediate elimination to as long as 30 years, depending on the sector.

Italy is already a relevant trading partner for Mercosur. Trade between Italy and the bloc reached €7.5 billion in 2025, according to ISTAT, Italy’s National Institute of Statistics, which also reported average annual growth of around 7% since 2021.

The new agreement could accelerate this trend, with early figures already showing an immediate effect. Italian exports to the region increased by 21% in the first month compared with May 2025, while estimates suggest they could reach €14 billion in the coming years.

According to Hans Henrik Danevig, owner of Danevig.eu and an export specialist, the EU-Mercosur agreement changes the commercial equation for European companies considering expansion into South America.

“We expect the agreement to stimulate not only higher trade, but also increased investment, acquisitions, technology partnerships and stronger regional supply chains. Sectors such as machinery, advanced manufacturing, renewable energy, infrastructure and digital technology could be particularly well positioned to benefit.”

However, Danevig highlighted that improved market access is only the starting point for companies looking to expand into the region.

“From my experience working with European companies in Latin America, the real opportunity is not simply lower tariffs. The companies that succeed are those that understand the local market, choose the right partners and build a long-term presence. The EU-Mercosur agreement can make market entry considerably more attractive, but execution on the ground will still determine who actually benefits.”