CADE grants clearence to the creation of largest petrochemical group of the Americas

The Conselho Administrativo de Defesa Econômica (Cade) approved on February 23 the purchase of Quattor by Braskem, creating the largest petrochemical group in the Americas.

As a condition for granting clearance CADE imposed some obligations on the Parties to enable the enforcer to monitor the group´s operations.

For instance, the merged entity shall previously notify CADE about any exclusive thermoplastic resin agreements entered into with overseas suppliers, as well as reporting several data on a periodic basis so the enforcer can monitor performance of the market.

All thermoplastic resin related contracts utilized buy foreign companies on the commercialization of the product must be informed to CADE, as well as any other form of contract that may confer with Braskem some sort of exclusivity.

Despite of the high concentration on the raw petrochemical material in the market, the Commissioners considered that there is not a threat to competition because of the possibility of the customers to turn to the international market to obtain its supply of material.

Magazine Luiza acquisiton approved by CADE with restrictions

Magazine Luiza acquisition of FS Vasconcelos e Cia Ltda ("Lojas Maia") was approved by CADE with restrictions referring to the non-competition clause in the geographic dimension.

Magazine Luiza is one of the major retail and durable goods chain of stores in Brazil. It has 459 stores in seven states and also acts on e-commerce delivering products to the whole country. Lojas Maia has 133 stores in nine states.

The Secretariat of Economic Monitoring (SEAE) had released and opinion suggesting the approval of the transaction with restrictions on the non-competition clause to adequate it on the geographic feature, restricting the clause to some municipalities.

The Reporting Counselor voted on the same line as SEAE suggested to approve the operation with restrictions of the non-competition geographic clause to have municipal dimension and its validity only in cities in the states of Alagoas, Bahia, Ceara, Maranhão, Paraiba, Pernambuco, Piauí, Sergipe and Rio Grande do Norte.

All the other counselors agreed with the Reporting Counselor.

CADE may appoint an intervenor at Saint Gobain plant

In July 2008 CADE rejected the acquisition by Owens Corning of Compagnie de Saint Gobain's fiberglass division in Brazil. The acquisition was part of a multinational deal, and marked one of the few opportunities in which CADE has blocked a transaction completely. At the time, the Brazilian competition agency provided Owens Corning with a deadline until February 1st 2011 to either divest a Saint Gobain's plant in State of São Paulo or submit a strategic plan for the sale to be completed (as the use of an independent investor to intermediate the divestiture).

According to a statement by CADE's President Fernando Furlan earlier this week, the deadline expired without any alternative solution being suggested by Owens Corning, which could cause CADE to begin an intervention at the former Saint Gobain's plant until the manufacturing unit is sold to an independent third-party. This would be the first time in CADE's history that it would make use of the powers granted by article 63 of the local antitrust law ("the execution of CADE's decisions shall be carried out by all means, including by way of intervention in the company, if necessary").

Health Care Insurance Acquisiton Approved by CADE.

CADE has approved the acquisition of health care insurance companies "Planos de Saúde Integrais S.A.", "Assistência Médica São Paulo S.A." and "Orion Participação e Administração S.A." by Amil Assistência Médica Internacional Ltda last Wednesday - February 9th, 2011. The Counselors decided to follow the guidance of the National Health Insurance Agency ("ANS") over the territorial concept advocated by the Secretary of Economic Monitoring ("SEAE") in the analysis of the relevant market in the sectors of health care services providence and health insurance sales. The Counselors approved the transaction with a restriction of the non-competition clause for the next five years in markets operated by "Assistência Médica São Paulo S.A." and "Planos de Saúde Integrais".

2011 Breaking News: Vinicius de Carvalho appointed as new Secretary of Economic Law (and other subjects)

Since this is the first post in the blog in 2011, Happy New Year, Readers and co-Bloggers!
The year began with Dilma Rousseff taking office as Brazil's new President. Dilma is the first woman to have this job in the Brazilian history. José Eduardo Cardozo, congressman (former lawyer) and Law professor has been appointed Minister of Justice and invited Vinicius Marques de Carvalho (currently one of CADE's Commissioners) as new Secretary of Economic Law (known as SDE). Carvalho accepted the offer, but he is not taking office before February. CADE currently has 5 members (the minimun quorum for decisions) and without Vinicius Carvalho the analysis of all cases would be immediately suspended. The antitrust community is now expecting for 3 new appointments that will be made by Dilma Rousseff to fullfill the vacant places at CADE, including CADE's President (CADE's Presidency is currently being occupied by Fernando Furlan). CADE's new members have to be approved by the Senate, after an official hearing before the Commission of Economic Matters.
Other fresh news from 2011 are upcoming. In the next days we will also include a few posts about December 2010's updates, pending publication.

Brazilian Senate approves new competition law bill with amendments

On December 1^st the Brazilian Senate has approved the bill for a new competition law.

Because the Senate has proposed amendments to the bill, it will return to the Chamber for review of acceptance of each of the amendments.

The bill was originally proposed by the government in 2005 and had previously been approved by the Chamber of Representatives in 2009.

The proposal for a new competition law was aimed to simplifying the institutional structure of the Brazilian Competition Authorities as well as implementing a pre-merger review process. Brazil currently has 3 different agencies involved in antitrust proceedings and is one of the very few jurisdictions that allow parties to conclude the merger before receiving green light from the enforcers.

One of the amendments to the bill proposed by the Senate is been subject to controversy. If accepted by the Chamber, the turnover thresholds for mandatory filing of mergers would be raised from R$400million to R$1billion, locally. Critics say Brazil would then have one of the highest thresholds in the World and therefore would face the risk of not been notified mergers that could have the potential to harm competition.

It is expected that the bill will be voted by the Chamber in the course of next year. It will not have immediate effects – the bill provides for a 12 month period for the restructuring of the authorities and preparation for the new pre-merger review system

Brief update about what happened while we've been away

There were two judgement sessions uncovered 480ª and 481ª Sessions happened November 24 and December 8 respectively.

It is worth of noticing the case Alesat Combustíveis S.A. and Repsol YPF Distribuidora S.A was approved (480ª) with a Consent Decree determining the parties not to renew the agreement with the MFB Gas Station.

There was also the 16th International Antitrust Conference that happened between November 26 and 27 at Guarujá. You can see the Program here (yes! it is in English!) and the presentations that were made there are here. Unfortunately, of course, not everything is in English but Roberto Pardolesi's presentation regarding Unilateral Conduct is! You may also enjoy the presentations made by Matteo Bay (from Lathan& Watkins), Susan Hinchliffe (Arnold&Porter), José Ramón González-Magaz (Steptoe&Johnson) and Brian Byrne (ClearyGottlieb). And maybe Google Translator help you enjoy the rest!

Cheers!