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With the new law, the average time for merger analysis is 25 days

Merger

Law 12.529/11 came into force one year ago
published: May 31, 2013 10:00 AM last modified: Apr 14, 2016 12:05 PM

With the new law, the average time for merger analysis is 25 days

The law that establishes the previous analysis of mergers and restructures the Administrative Council for Economic Defense - CADE has had its one-year anniversary on May 5th. Under the rules of Law 12.529/11, 250 operations were approved in an average analysis time of 25 days. In 2011, the year before the entry into force of the new law, the average analysis time was 154 days.

According to Cade’s president, Vinicius Marques de Carvalho, a prior analysis of mergers enabled the rapid trial of these processes. "We increased efficiency not only for the competition defense system, but for the business world as well - which is a gain to both legal certainty and investment," he said.

Out of the 250 approved operations, 227 used the fast track procedure – because they are simpler from the competition point of view - and were analyzed by Cade in 20 days, on average. Those cases correspond to 90% of the total. As to more complex cases, there were 23 that were analyzed in an average of 69 days.

All in all, 262 cases of mergers and acquisitions were presented to the antitrust authority under the regime of Law 12.529/11.

Under the new law, the mergers in which there is no need to apply any competitive constraint may be decided directly by CADE’s General Superintendence. Out of the 250 cases presented, 238 were approved by the Superintendent, totaling 95%.

In seven cases, CADE decided that no examination was required. The other five were decided by the Tribunal: two of them due to restrictions imposed by the Merger Agreement (ACC, for its acronym in Portuguese), two for not complying to the non-competition clause, and one that was called by the Tribunal by avocation (when the proceeding already decided by the Superintendent is pulled by one of the Tribunal Commissioners for revision).

Fight against anticompetitive conducts – Since CADE’s restructuring, 23 administrative proceedings related to anticompetitive conducts were judged - out of which, 11 were convicted. In 2011, the agency analyzed 16 similar cases and condemned one of them.

Considering the restructuring of the new law, CADE has a more efficient merger analysis system, which lets the agency focus more resources on the fight against cartels - a priority of the Brazilian antitrust policy. Since Law 12.529/11 came into force, the General Superintendence has conducted five dawn raids in investigations of this type of conduct. Four were held in 2012 and one in 2013. In 2011, there were two.

On another front to intensify the fight against cartels, CADE has made advances on the rules for the conclusion of agreements on investigations of anticompetitive conduct, the Cease and Desist Agreements (TCC, for its acronyms in Portuguese). Under the new policy, to conclude agreements, alleged cartel parties need to confess their involvement in collusion and cooperate with the investigation, if the process is still in the investigation phase. The TCCs are tools that assist in obtaining evidence, which may be decisive in administrative investigations, and effective for the resolution of cases. Also, they are mechanisms that determine the immediate suspension of the practices investigated.