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MERGER CONTROL

can be sold directly to farmers or undergo further genetic improvement. If further improvements
are made, the resulting seeds are multiplied for large-scale distribution. This sector is directly
tied to the agricultural pesticides market, which uses the resulting products to combat diseases
that can appear while crops are being farmed (crop protection).
Given the concerns raised by Parties’ significant biotechnology and pesticide
interests, particularly in the soybean and cotton markets, a consent decree was negotiated setting
out a number of structural and behavioral remedies. The main structural remedy consisted of
divesting all Bayer assets related to the cotton and soybeans seeds businesses and the business
of nonselective herbicides based on ammonium glufosinate to BASF.
The behavioral remedies involved transparency of commercial policies, a
ban on imposing sales channel exclusivity, a ban on tie-in sales and bundling and wider, non-
discriminatory product licensing.
Commissioner Cristiane Alkmin voted to approve the transaction subject
to certain unilateral restrictions and if the Tribunal did not agree, she would vote to block
the deal. Commissioner Joao Paulo de Resende voted to block the deal, commenting that the
negotiated remedies resulted from a global negotiation and would be insufficient to alleviate
concerns in Brazil.

Ultragaz’s acquisition of Liquigás: the only deal blocked in 2018

Later in February, CADE’s Tribunal blocked Ultragaz’ acquisition of Liquigás,
following the opinion of Commissioner Cristiane Alkmin . This was the only merger blocked in 2018.
3
The Tribunal noted that the Parties had the two largest market shares in
Brazil’s LPG market, which would result in significant horizontal overlaps, with the merging
entity accounting for over 40% of sales in various Brazilian states. Additionally, the market
concentration resulting from the transaction would increase barriers to entry for new competitors
and eliminate any effective rivalry.
According to CADE, the transaction would therefore increase industry
concentration and allow Ultragaz to abuse its dominant position in the resale supply chain. The
evidence provided to support procompetitive justifications was deemed insufficient to prove
benefits to consumers that could compensate the harms.
While Parties offered divestiture commitments, the Tribunal held that level of
divestiture offered in the remedy package was not enough to alleviate concerns and reestablish
an acceptable rivalry level. While two Commissioners voted in favor of the remedy proposal,
the majority voted to block the deal.

3
See Merger Review No. 08700.002155/2017-51.