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JBS shall report purchases of meat packing companies to CADE for the next 30 months

Merger

Such a requirement is set forth in a Performance Agreement signed between Cade and JBS
published: Apr 18, 2013 10:00 AM last modified: May 02, 2016 03:21 PM

Whilst judging 12 mergers involving purchases of meat packing companies by JBS S.A., the Administrative Council for Economic Defense – Cade determined that the company shall report all future similar transactions within the next 30 months. Even operations that do not meet the criteria for mandatory reporting must be notified to the antitrust authority. Such a requirement is set forth in a Performance Agreement (TCD, for its acronym in Portuguese) signed between Cade and JBS on April 17th.

Reporting commissioner, Marcos Paulo Verissimo, understood that the approved operations do not create competition problems given that there are other strong competitors in the market. He also said that, currently, the relationship between prices paid to cattle ranchers and values of fresh beef given by meat packing companies prove that the industry operates within small profit margins. That makes it impossible for the concentration of meat packing companies by JBS to create price increases to the consumer or reduction of farmers’ income.

Through the signature of the TCD, the reporting commissioner assured that future leases and acquisitions of meat packing companies shall be informed to the Council, be the units active or inactive. "The measure is adequate to ensure that the activities related to JBS meatpacking industry are properly monitored by CADE" he said.

JBS Operations - Among the 12 operations approved on April 17th, 7 were not notified to CADE within the legal mandatory period, which resulted in fines amounting to 7.4 million BRL.

Only 6 out of the 12 merger cases had been reported. The first, from 2009, is the unification of operations of JBS and Bertin SA, through the creation of a holding called FB Participações SA (merger file no. 08012.008074/2009-11).

In 2012, five other JBS acquisitions were reported:

- a meat packing company located in the state of Rondônia and 2 distribution centers located in the states of Paraná and Santa Catarina, all formerly owned by Tiroleza Alimentos Ltda and by Rodo GS Transport e Logísticas Ltda (merger file no. 08700.004226/2012-46);
- a set of assets related to a meat packing company located in the State of Mato Grosso and a tannery unit located in the same State, both previously owned by SSB Administração e Participações Ltda (merger file no. 08700.004230/2012-12);
- meat packing companies located in the State of Rondônia and in the State of Mato Grosso, formerly owned by FR Participações Ltda (merger file no. 08012.003367/2012-08);
- meat packing company located in the State of Acre, formerly owned by JEMA Participações Ltda (08012.002148/2012-01); and
- meat packing company located in the state of Rondônia, formerly owned by MJE Asset Management Ltda (merger file no. 08012.002149/2012-48).