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Superintendence suggests second agreement in a merger case under the new antitrust law

Merger

The agreement proposed on the acquisition of MACH by Syniverse will now be reviewed by CADE’s Tribunal
published: May 03, 2013 10:00 AM last modified: Apr 14, 2016 11:54 AM

The General Superintendence of the Administrative Council for Economic Defense – CADE, in a decision published on May 3rd, recommended the clearing of the acquisition of WP Roaming III SARL (MACH) by Syniverse Holdings, Inc subject to the signing of a Merger Control Agreement (ACC, for its acronym in Portuguese).

The transaction was notified to CADE in its final form in October 2012, and, in the Superintendence’s opinion, would result in high degrees of concentration in the GSM data clearing and Near Real Time Roaming Data Exchange (NRTRDE) markets, which are technology services provided to mobile network operators. GSM data clearing allows MNOs to charge for roaming services when a user of a mobile device connects to a network different from his or her home network. NRTRDE, in turn, is a service that allows fraud detection in roaming services.

To address the Superintendence’s competition concerns, Syniverse and MACH proposed an agreement (ACC) to CADE, whereby they agree to undertake a series of commitments to mitigate anticompetitive effects of the transaction. The content of the proposal is confidential until the case trial.

The General Superintendence recommended the approval of the ACC, which will be analyzed by the Tribunal, responsible for rendering the final decision. Under Law n. 12.529/2011, all merger cases in which the Superintendence recommends restrictions or agreements must be reviewed by the Council’s Administrative Tribunal.

This is the second ACC proposal presented to CADE under the new antitrust law. Last week, an agreement proposed by companies Ahlstrom Corporation and Munksjö AB (AC n. 08700.009882/2012-35) was also submitted to the Tribunal, with a favorable opinion from the General Superintendence. Under the former legislation (Law 8.884/94), this type of arrangement was conducted through Performance Agreements (TCD, for its acronym in Portuguese).