CADE’s General Superintendence concludes opinion about transaction between Owens-Illinois do Brasil and Nadir Figueiredo
The General Superintendence of the Administrative Council for Economic Defense – CADE, in a decision published in the Federal Official Gazette on 17 January, forwarded to CADE’s Tribunal analysis the acquisition of Owens-Illinois Brasil’s glass household items unit by Nadir Figueiredo (Merger n° 08700.005137/2017-21). According to the opinion of the Superintendence, the transaction should not be approved.
After analyzing the information gathered within the market, the Superintendence found out that the Brazilian market of glass household items presents a high concentration level, even considering the scenario without the completion of this transaction. Nadir Figueiredo – leader of the market – has a high market share, which would be reinforced with the acquisition of Owens-Illinois do Brasil’s household items unit.
Besides the high concentration level, CADE’s General Superintendence identified that the competition from other domestic producers and the probability to arise new entrants in this market are low. Neither the imports would be sufficient to prevent an eventual abuse of market power, since, despite its relevance, the imported products do not seem to negatively impact Nadir Figueiredo’s market share, revenues and mark-ups.
CADE’s General Superintendence also stated that it is not possible to deduce that the efficiencies alleged by the companies are specifically derived from the operation – in other words, that could not be reached by other means but only through this merger. They are, therefore, insufficient to uphold the approval of the transaction.
The merger was forwarded to CADE’s Administrative Tribunal, which is responsible for issuing a final decision - approval, disapproval or the adoption of remedies to solve the competition issues identified in the transaction. The Tribunal’s decision can be applied unilaterally or by means of an agreement with the parties.
The paperwork for the merger was submitted to CADE on 18 August of 2017 and the authority is legally due to issue a final decision within 240 days, which can be extended for 90 more days.