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CADE’s General Superintendence issues opinion on merger between Condor Pincéis and Tigre


The merger transaction will be analysed by the Tribunal.
published: Jun 09, 2015 10:00 AM last modified: May 11, 2016 04:32 PM

The General Superintendence of the Administrative Council for Economic Defense – CADE, in a decision published in the Official Gazette on 5 June 2015, submitted the merger transaction regarding the acquisition of all quotas of Condor Pincéis Ltda. by Tigre S/A – Tubos e Conexões, to the Tribunal for analysis (Merger File no. 08700.009988/2014-09).

Condor Pincéis is responsible for the manufacturing and sale of tools for artistic and school painting and estate property painting. Tigre S/A – Tubos e Conexões belongs to Grupo Tigre, also comprising the companies Pincéis Tigre – Ferramentas para Pintura, Plena – Acessórios em PVC, Claris – Portas e Janelas em PVC e Tigre ADS – Tubos Corrugados em PEAD. In its wide portfolio, Grupo Tigre commercializes paint brushes, brushes, paint rollers and other painting accessories.

After analysis of information provided by the parties, competitors and customers in the market, the General Superintendence verified that Tigre and Condor are the two largest companies in the market of paint brushes. The other competitors are significantly smaller. As a result of the proposed transaction, Tigre would control more than 70% of the market.

The General Superintendence also concluded that the transaction raises competition concerns in the markets of brushes, paint rollers and painting accessories, despite the existence of a significant competitor in these markets. According to the issued opinion, the increase in Tigre’s portfolio power in those market segments could jeopardize the access of smaller companies to the points of sale.

Furthermore, some characteristics were identified in the analyzed markets, which also raise competition concerns with relation to the possibility of coordination between the main companies in the market of brushes.

Considering the competition concerns, the General Superintendence understood that the approval of the merger in the terms it was notified would result in price increasing and in the elimination of competitors. In this sense, the General Superintendence challenged the merger before CADE’s Tribunal, which will be responsible for the final decision, and can approve, block or impose remedies to prevent the identified problems. The Tribunal’s decision can be applied either unilaterally or by means of a settlement with the parties.

The merger operation was notified in December 2014 and the parties presented amendments to the notification file on 7 January 2015. The legal term for CADE’s final decision is of 240 days, extendable for more 90 days.