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CADE signs reversibility agreement for the acquisition of Brasfrigo by Goiás Verde

Merger

CADE determined that the acquisition of Brasfrigo Alimentos Ltda. by Goiás Verde Alimentos Ltda. would have been closed before the notification and approval of the agency – practice known as gun jumping.
published: Feb 02, 2015 05:00 PM last modified: Apr 13, 2016 11:15 AM

The General Superintendence of the Administrative Council for Economic Defense – CADE determined that the acquisition of Brasfrigo Alimentos Ltda. by Goiás Verde Alimentos Ltda. would have been closed before the notification and approval of the agency – practice known as gun jumping. Thereby, CADE signed with the companies an Agreement to Preserve Reversibility of Transaction (APRO for its acronym in Portuguese), which was approved in the judgment session of 29 January 2015.

The acquisition of Brasfrigo by Goiás Verde was closed in October 2012. After acknowledging the transaction through press reports, the General Superintendence opened an Administrative Proceeding to Investigate a Merger (APAC for its acronym in Portuguese, no. 08700.007161/2013-71), and confirmed in November 2014 that this acquisition should have been filed in the agency before it was closed.

By determining the need of filing the merger at CADE, the General Superintendence requested to the companies documents and information on the current situation of the assets transferred in the transaction. It was also established that Goiás Verde and Brasfrigo should propose precaution measures in order to assure the reversibility of the merger if CADE deems necessary to adopt it after the analysis of the case.

After negotiating and signing the APRO draft proposed by the companies, the General Superintendence forwards it to CADE’s Tribunal, which approved the agreement. The APRO establishes conditions that guarantee the reversibility of the transaction and partially mitigates the impacts derived from its anticipated closure until the agency’s final decision.

The merger is under analysis by the General Superintendence, which will issue an opinion on its competition impacts and will forward the case to the Tribunal for judging. The Council is responsible for the approval and for stating the effective occurrence of gun jumping. If the infringement is confirmed, the Tribunal can impose sanctions.

Public Consultation – In the end of 2014, CADE opened for public consultation a draft of a Resolution that regulates the Administrative Proceeding to Investigate a Merger – APAC. The APAC is the tool through which the General Superintendence investigates the occurrence of gun jumping (according to the requirements foreseen in Law 12.529/2011). The APAC also enables the agency to demand mergers that are not included in the legal criteria, but that have potential to limit competition. The Council will discuss the contributions received in the public consultation.