By Guillermo Parra-Bernal and Aluísio Alves SAO PAULO, July 2 (Reuters) - Mergers and acquisitions in Brazil are expected to gain steam by the year-end as economic and political risks ease, helping companies and private-equity firms scouring for takeover targets focus on tapping the country's long-term potential. Three years of sub-par economic growth, a weaker currency and declining profits have driven asset prices lower and boosted the appeal of takeover targets. But some acquisition hunters could remain cautious ahead of a presidential election in October, making it harder for bids and offers to converge before then, bankers said. Companies announced about $28.328 billion worth of deals in Brazil in the first half of the year, up 34 percent from $21.006 billion in the same period in 2013, a quarterly Thomson Reuters report on M&A activity showed on Wednesday. About 221 deals have been announced so far this year, down from 303 a year earlier.