Page 18 - COMPETITION LAW_Flip

18

MERGER CONTROL

Ademir Antonio Pereira Jr.
Mário André Machado Cabral

In 2017, merger control in Brazil lived a challenging period. Amidst
important changes in the Commissioners’ seats, CADE’s Tribunal had to rule on complex
and challenging mergers. This was a period of high
uncertainty that resulted in two mergers being blocked, COMMISSIONERS SHOWED
showing signs of a tougher stance on mergers. SEVERE CONCERNS WITH
Right in the first months of 2018, IMPLEMENTATION ASPECTS
CADE decided three of the biggest mergers of the year. THAT COULD IMPAIR
The business community was carefully watching the THE EFFECTIVENESS OF
developments in those cases to understand whether THE DIVESTITURE, AND
CADE`s harder approach would be sustained. While REQUIRED “UPFRONT
the trend of more rigorous scrutiny continued (the merger BUYER” COMMITMENTS
involving Ultragas’ acquisition of Liquigas was blocked), (MEANING THAT PARTIES
CADE gave signs that it saw the need to recalibrate the CAN ONLY CONSUMMATE
standards of review to find solutions that would enable THE ORIGINAL TRANSACTION
the procompetitive justifications of the mergers to be AFTER SUBMITTING BINDING
implemented while dealing with antitrust concerns. AGREEMENTS WITH
CADE’s holding in ArcelorMittal’s ACQUIRERS OF THE DIVESTED
acquisition of Votorantim Siderurgia and Bayer’s ASSETS). FURTHERMORE,
acquisition of Monsanto made it clear that Parties would POTENTIAL ACQUIRERS HAD
be able to alleviate concerns if they managed to come up TO MEET HIGH THRESHOLDS
with detailed remedies followed by substantive guarantees IN TERMS OF FINANCIAL
in terms of implementation. CAPACITY AND KNOW-HOW IN
Commissioners showed severe THE RESPECTIVE INDUSTRIES.
concerns with implementation aspects that could FINALLY, COMMISSIONERS
WERE EXTREMELY CAREFUL
IN SELECTING VALUABLE
ASSETS THAT COULD
EFFECTIVELY ALLOW ENTRY
OR CONSOLIDATION OF
RIVALS.