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CADE will review the transaction involving Seara and Bunge


CADE’s Tribunal requested the M&A proceedings this Wednesday (26 August). Commissioner Sérgio Ravagnani was appointed as the rapporteur by lot
published: Aug 26, 2020 08:42 PM last modified: Aug 26, 2020 08:42 PM

The Tribunal of the Administrative Council for Economic Defense (CADE) decided, this past Wednesday, to review the transaction involving the acquisition by Seara of the mayonnaise and margarine businesses of Bunge. Through the transaction, Bunge intends to sell its productive capacity (factories), product brands and other assets to Seara.

Commissioner Luis Henrique Bertolino Braido highlighted that the transaction affects two relevant markets: margarine and degummed soybean oil. Concerning the margarine market, Mr. Braido stated that it Is necessary that a more in-depth examination of the reasons for approval be carried out, since a high market concentration resulted from the transaction and there are entry barriers to new competitors in place.

Regarding the degummed soybean oil market (an input used in the production of margarine), the commissioner stressed the importance of carrying out an additional assessment on the product supply relationship. “It is noteworthy that, since the transaction will cause a high market concentration involving two competitors, including BRF, a deeper review could be done to prevent the possibility that the structure presented to CADE will favour potential anticompetitive practices in the market,” he evaluated.

The Tribunal unanimously approved the request order and, subsequently, the proceedings were assigned to commissioner Sérgio Ravagnani, who will serve as the case’s rapporteur.