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CADE signs the first two Merger Control Agreements

Merger

Two merger files approved with restrictions are the first under the new law
published: May 23, 2013 10:00 AM last modified: May 02, 2016 03:26 PM

The Tribunal of the Administrative Council for Economic Defense – CADE  signed, on Wednesday (22/05) the first two Merger Control Agreements (ACC, for its acronym in Portuguese), as a condition for the approval of transactions analyzed under the new competition law (Law 12.529/11). The two cases were also being analyzed by other jurisdictions, including the European Union. International cooperation with European Competition agencies took place for both cases.

According to CADE’s president, Vinicius Marques de Carvalho, the cases reflect the advances brought by Law 12.529/11. "In the previous law, the Council would only analyze cases after their approval in other jurisdictions. With the institution of the analysis prior to the merger, we are able to discuss possible remedies in a coordinated manner with similar agencies abroad."

The first case was reported by Commissioner Alessandro Octaviani and it deals with the acquisition of MACH by Syniverse. During examination, the General Superintendence found that the transaction would result in high concentration in the GSM data clearing and Near Real Time Roaming Data Exchange (NRTRDE) markets, which are technology services provided to mobile telecommunication companies for the charging of roaming.

To remedy competition concerns, MACH and Syniverse proposed the signing of the ACC, through which they undertake certain obligations to remove any anticompetitive harms of the transaction. The content of the agreement is confidential.

"This case demonstrates the importance of fomenting dialogue between Competition authorities in an increasingly globalized world. It is worth highlighting the interaction between Cade and the European Commission to exchange information and synchronize stages of the investigation" said the Reporting Commissioner.

Ana Frazão, Reporting Commissioner of the second case, in which an ACC was also signed, stressed the importance of international cooperation between Competition agencies, especially because the companies are abroad. "The case is undoubtedly an example of success that favors the strengthening of the application of competition rules in situations where competition has an international effect."

In the operation reported by Commissioner Ana Frazão, there was high concentration in the pre-impregnated decorative paper (PRIP) market, which is used in indoors furniture as kitchens, bedrooms and offices, and in the heavy abrasive paper market (used to manufacture abrasive coating, and to polish materials operations in many industrial sectors), with no prospects of new entrants in the sector nor of sufficient firms able to compete in these markets.