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CADE’s General Superintendence concludes opinion regarding the acquisition of Citibank by Itaú


The opinion recommends the approval of the transaction conditioned to the establishment of a Merger Control Agreement (ACC in its acronym in Portuguese)
by Assessoria de Comunicação Social published: Jul 13, 2017 12:23 PM last modified: Jul 13, 2017 12:23 PM

The General Superintendence of the Administrative Council for Economic Defense – CADE, submitted to the analysis of CADE’s Administrative Tribunal an analysis regarding the acquisition of Citibank by Itaú-Unibanco (Merger No. 08700.001642/2017-05). The opinion, published in the Federal Official Gazette on 12 July, recommends the approval of the transaction conditioned to the signature of a Merger Control Agreement (ACC in its acronym in Portuguese) between Itaú and CADE.

The ACC resulted of a deep analysis conducted by the General Superintendence about the Brazilian banking market which verified the existence of competition impacts, pointing to low competition between the banks. During the initial phase of the investigation, the authority aimed at verifying if the acquisition of Citibank would increase these problems, reducing competition in the sector. 

In its analysis, the Superintendence considered several services provided by the banks, such as cash deposits and time deposits, provision of credit to consumer and credit card, among others, to evaluate the overlapping between the parties involved in the transaction. The Superintendence verified that the market presents various competitive problems, such as low portability, high bank spread and a high number of complaints concerning the quality of services. 

In addition, the opinion raised concerns regarding the frequency of acquisitions made by Itaú in the financial market as a whole, increasing its market share in the markets in which it already operates, as well as the services portfolio offered by its economic group.

However, it was also noticed that Citibank has a reduced market share in the market, which could limit the Itaú potential to increase its market power. The Superintendence verified that, although the presence of Citibank in the country has more than a hundred years, the institution has only 1% of assets and total deposits – which highlights its conservative profile in competitive terms.


Considering the potential competitive problems identified, the parties agreed to sign a Merger Control Agreement with CADE, in order to obtain the transaction approval. The terms negotiated aim to eliminate the risks of harm to Citibank’s clients and benefit Itaú’s clients through the adoption of measures which could raise the quality services provided by the institution. 

The ACC was established targeting four main areas: Communication and transparency; training programs; quality Indicators; and compliance. These topics encompass a package of measures to be adopted by Itaú, including the improvement of indicators concerning salary account portability, credit operations and quality, diffusion of information about positive register, training and the establishment of a competition compliance program. All these measures have quantifiable indexes, which will be monitored. If the deal is concluded, the non-compliance with the obligations agreed will result in the imposition of fines by CADE.

The transaction is now under the analysis of CADE’s Tribunal, which is responsible for issuing the final decision. The Tribunal can either accept the recommendations of the General Superintendence or adopt other measures provided by the Law 12.529/11.

The merger was notified in March 2017 and CADE has 240 days, which can be extended for more 90 days, to review and issue a decision on the case. 

Proceedings’ distribution session

On 12 July, CADE also carried out the 145ª Proceeding’s distribution session in order to distribute randomly the proceeding under analysis to a reporting commissioner.

The merger regarding the acquisition of Citibank by Itaú was assigned to Commissioner Paulo Burnier.