Cade approves with restriction merger between Praxair and Linde
The Tribunal of the Administrative Council for Economic Defense - CADE approved the merger of Praxair, Inc (White Martins) with Linde AG, in the industrial, special and medicinal gases market. The authorization of the merger was conditioned to the signature of a Merger Control Agreement (ACC in its acronym in Portuguese).
As highlighted by the reporting commissioner, Mr. Mauricio Oscar Bandeira Maia, the evidentiary stage of the proceeding confirmed a general perception that the Brazilian market of industrial and special gases is highly concentrated, and the interested parties of the merger (especially Praxair) act as the main players of this market.
"Those gases have a broad range of applications and, therefore, are used in many different industries. The medical, chemical, metallurgical, food, production, healthcare, electronics, oil refining, cellulose and paper, and glass industries are the most important industries served by the industrial gases business," explained the reporting commissioner.
The sum of the market shares of the parties involved in the merger is greater than 20% in all relevant markets identified. In order to rule out potential competition concerns caused by the transaction, the ACC imposes the fulfillment of a series of antitrust remedies, which are essentially structural in their nature.
Among the obligations enclosed in the Merger Control Agreement is the divestiture of several businesses. The assets to be sold remain confidential. The ACC also forbids the holding that results from the transaction to acquire, totally or partially, any assets that integrate the divested business, as well as participating in new biddings to renew the current agreements related to the onsite plants that compose the divestitures.
The ACC also imposes the commitment of non-discrimination in the supply of calcium carbide, a gas which, in Brazil, is exclusively manufactured by Praxair. Therefore, the parties should ensure access to calcium carbide in an isonomic and non-discriminatory manner for potential buyers.
The measures encompassed in the agreement were presented by the companies involved in the transaction. "Besides ruling out the identified competitive concerns, they seek to preserve the rivalry conditions previous to the merger," stated the reporting commissioner.
Access the merger files n° 08700.007777/2017-76 .