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Brazil

Published on Wednesday 4th January 2017

    Applicable legislation and the competent authorities

    • Brazil

      Brazil has merger control rules since at least 1962, with the enactment of Law No. 4,137. However, such statute was not fully enforced in practice.

      The first effective merger control regime in Brazil was adopted in 1994 by means of Law No. 8,884. After almost two decades in force, such statute was repealed by Law No. 12,529/2011 (the Brazilian Competition Law, or BCL), which entered into force on 29 May 2012. The BCL sets forth the main provisions regarding merger control in Brazil, including applicable criteria for mandatory notification of transactions and other procedural matters.

      The Administrative Council for Economic Defence (CADE) – the Brazilian antitrust agency –  has also approved several rules regarding merger control: (i) CADE’s Internal Rules (Regimento Interno), with detailed guidance concerning procedural steps; (ii) Resolution No. 2/2012, which established standard notification forms and more detailed provisions for the fast-track proceeding applicable to simpler transactions; (iii) Resolution No. 16/2016, which formally set up a 30-day deadline for the approval of fast-track eligible transactions; and (iv) Resolution No. 17/2016, which defined the hypotheses for the mandatory notification of non-merger transactions known as “associative agreements”.

      Answer contributed by Paulo L Casagrande from Stocche Forbes Advogados

      Last verified on Friday 9th February 2018

    • Brazil

      Yes, there are some sector- or industry-specific rules requiring previous notification of certain corporate transactions, especially those involving the change of control of a regulated entity. Indeed, the Brazilian Central Bank (which regulates financial institutions), ANATEL (the National Telecommunication Agency), ANEEL (the Brazilian Electricity Agency) and other federal and state agencies have the power to review certain transactions involving companies active in their respective regulated industries. In general, a transaction involving a regulated entity usually have the parties asking for the approval of both CADE and the sectoral regulatory agency.

      Answer contributed by Paulo L Casagrande from Stocche Forbes Advogados

      Last verified on Friday 9th February 2018

    • Brazil

      Yes, according to article 88, para. 3 and 4 of the BCL, parties of transactions subject to mandatory review by CADE shall not consummate the deal nor change competitive conditions before the agency’s approval. If such determinations are not observed, the transaction may be declared null and the parties may be sanctioned with a fine ranging from 60,000 to 60,000,000 reais, without prejudice of the opening of an administrative proceeding to investigate the potential anticompetitive effects arising from the acts performed by the parties.

      Simple merger review proceedings (or “concentration acts”) are generally approved within 30 days from filling by CADE’s investigative arm, the General Superintendency (SG). After such approval, parties have to wait a further 15-day suspension period within which third parties can file an appeal or a member of CADE’s higher body – the Tribunal – can decide to review the case. Both situations are fairly rare.  

      However, the statutory term for CADE to issue its final decision about a concentration act is 240 days, which can be extended either upon justified request of the parties (for 60 days) or a motivated decision by the authority due to the complexity of the case (90 days). This can lead to a merger review time of up to 330 days, a deadline that was nearly met in the case involving educational groups Kroton and Anhanguera, decided in 2014 after a 327-day proceeding.[1]



      [1] Concentration Act 08700.005447/2013-12.

      Answer contributed by Paulo L Casagrande from Stocche Forbes Advogados

      Last verified on Friday 9th February 2018

    • Brazil

      According to article 91 of Law No. 12,529/2011, the approval of a concentration act may be challenged by CADE’s Tribunal if (i) the authority relied on false or misleading information provided by the interested parties, (ii) the parties do not comply with any of the obligations or commitments entered into with CADE, or (iii) the intended benefits arising from the transaction are not achieved. This has already happened under the BCL, with the acquisition of certain meatpacking plants from Rodopa by JBS, originally approved in 2014, being reviewed in 2016, once CADE verified that the parties did not fulfil certain commitments.[1]



      [1] Concentration Act 08700.010688/2013-83.

      Answer contributed by Paulo L Casagrande from Stocche Forbes Advogados

      Last verified on Friday 9th February 2018

    • Brazil

      CADE is the only competition authority responsible for the enforcement of merger control rules in Brazil under the BCL, although, as seen in question 2, other regulators have the power to evaluate mergers involving companies active in certain industries.

      As briefly mentioned in question 3 , CADE is composed of two main internal bodies: (i) the SG; and (ii) the Administrative Tribunal for Economic Defence (Tribunal).

      The SG is in charge of receiving all merger fillings and evaluating them, with broad investigative powers to verify whether a proposed transaction has the potential to harm competition. If it finds that the merger raises no antitrust issues, the head of the SG – the Superintendent General – can directly approve the merger; if this is not the case, the SG shall object the transaction and the final decision will to be taken by the Tribunal.

      The Tribunal – composed of six Commissioners and CADE’s President – has the power to review concentration acts if (i) they are objected by the SG; (ii) a third party submits an appeal against the clearance decision issued by the SG; or (iii) one of its members asks the Tribunal to review the case. The Tribunal may approve, prohibit or impose restrictions on a merger, with such restrictions usually proposed by the merging parties.

      CADE’s decisions are final and non-appealable within the Federal Executive Branch, but they can be challenged before federal courts, as seen in greater detail in the response to questions 42 to 44.

      Answer contributed by Paulo L Casagrande from Stocche Forbes Advogados

      Last verified on Friday 9th February 2018

  • Time frames

    • Brazil

      Only very few complex transactions have been prohibited by CADE. Parties to more complex cases usually seek to solve competition concerns with negotiated remedies. However, CADE has prohibited three mergers in 2017 alone.

      On 28 June 2017, CADE blocked a transaction involving two large players in the markets for university courses (Kroton/Estacio case).[1] The Brazilian antitrust authority considered that such transaction would result in high concentration in some markets for undergraduate and graduate courses, including in-person and distance learning programmes. Moreover, rivalry in such markets would allegedly not be sufficient to prevent price increases in the sector.

      On 2 August 2017, the acquisition of a regional fuel distributor by one of its main competitors (Ipiranga/Alesat case) was prohibited.[2] CADE concluded that such transaction would eliminate the main regional player capable of competing with the three largest nation-wide distributors in a market in which there are several investigations of alleged collusion among competitors. 

      Finally, on 10 October 20017, CADE has blocked the acquisition of a meatpacking player by a competitor, in view of potential anticompetitive issues in such market and the lack of viable remedies to solve them (JBJ/Mataboi case).[3]  



      [1] Concentration Act 08700.006185/2016-56.

      [2] Concentration Act 08700.006444/2016-49.

      [3] Concentration Act 08700.007553/2016-83.

      Answer contributed by Paulo L Casagrande from Stocche Forbes Advogados

      Last verified on Friday 9th February 2018

    • Brazil

      Cases that are eligible for the fast-track proceeding (ie, those that objectively do not raise competitive concerns) are often cleared by the SG within 30 days.

      Answer contributed by Paulo L Casagrande from Stocche Forbes Advogados

      Last verified on Friday 9th February 2018

    • Brazil

      The analysis of these transactions generally involves two phases: (i) the investigation by the SG; and (ii) the final evaluation and decision by the Tribunal.

      According to an internal manual made public by the SG in July 2017[1], cases that are submitted under the ordinary proceeding (ie, those not eligible for fast track) are analysed by the investigative body within the following time frames:  

      Simple concentration acts

      Up to 45 days

      Medium complexity concentration acts

      Up to 75 days

      High complexity concentration acts

      Up to 120 days

      After its investigation, the SG can (i) unconditionally approve the concentration act; or (ii) submit it to the Tribunal, with an articulated description of the main competition concerns found during the investigation (similar to a statement of objections under the European Union Merger Regulation).

      The Tribunal then has to issue a final decision within the statutory limit of 240 days from the merger filling. However, if the SG has declared the transaction to be “complex” during the investigation, the Tribunal is authorised to extend the total term of the proceeding for further 90 days, leading to a 330-day maximum limit. If a decision is not reached by CADE within such extended limit, the transaction is deemed to be tacitly approved.



      [1] Internal manual of the General Superintendency for concentration acts submitted under the ordinary proceeding, available at www.cade.gov.br/acesso-a-informacao/publicacoes-institucionais/guias-e-manuais-administrativos-e-procedimentais/manual-interno-da-sg-para-casos-ordinarios.pdf (only in Portuguese).      

      Answer contributed by Paulo L Casagrande from Stocche Forbes Advogados

      Last verified on Friday 9th February 2018

  • Notifiable transactions: thresholds

    • Brazil

      According to article 90 of the BCL, a transaction can be deemed as a notifiable "concentration act" whenever: (i) two or more independent undertakings merge; (ii) one or more undertakings acquire the control or parts of one or more undertakings; (iii) one or more undertakings incorporate other(s) undertaking(s); or (iv) two or more undertakings enter into a joint venture, a consortium or an "associative agreement".

      Acquisitions of minority interests

      The BCL states that the acquisition of “parts” of an undertaking can qualify as a reportable “concentration act”. Based on that, CADE’s Resolution No. 2/2012 defined the following types of transactions involving acquisitions of minority interests that must be notified:

      • The acquisition of 20 per cent or more of the total or voting capital of an invested company that does not undertake horizontally or vertically related activities as those of the acquiring company;
      • The acquisition, by a party that already has 20 per cent or more of the invested company’s total or voting capital, of an additional interest of 20 per cent or more from a single seller, whenever the acquiring company does not undertake horizontally or vertically related activities as those of the invested company;
      • The acquisition of 5 per cent or more of the total or voting capital of the invested company that undertakes horizontally or vertically related activities as those of the acquiring company; or
      • The last acquisition that, individually or jointly with other transactions, results in an additional participation of 5 per cent, whenever the acquiring company (i) already has 5 per cent or more of the total or voting capital of the invested company, and if the acquiring company (ii) undertakes horizontally or vertically related activities as those of the invested company.

      Associative agreements

      On 18 October 2016, CADE approved Resolution No. 17/2016, which defined the hypotheses for the mandatory filing of ‘associative agreements’. According to such Resolution, agreements are deemed to be “associative” if they have a term of two years or longer and set up “a joint enterprise for the development of an economic activity”. Furthermore, it is only mandatory to notify agreements in which all the following additional conditions are met: “(i) the parties agree to share risks  and financial results derived from the economic activity that constitute its object; and (ii) the contracting parties are competitors in the same relevant market of the one referred in the agreement”.

      Answer contributed by Paulo L Casagrande from Stocche Forbes Advogados

      Last verified on Friday 9th February 2018

    • Brazil

      According to CADE’s Resolution No. 2/2012, the acquisition of sole or joint control can be qualified as a reportable "concentration act". Such regulation does not detail the definition of "control" for merger review purposes; the antitrust agency generally accepts the identification of control as provided by corporate rules, especially the one present at article 116 of the Brazilian Stock Corporation Law, which states that:

      A controlling shareholder is defined as an individual or a legal entity, or a group of individuals or legal entities by a voting agreement or under common control, which:

      (a) possesses rights that permanently assure it a majority of votes in resolutions of general meetings and the power to elect a majority of the corporation officers; and

      (b) in practice uses its power to direct the corporate activities and to guide the operations of the departments of the corporation. [1]

      In practice, few cases involve the discussion of the concept of control for merger control purposes, since transactions either configure a clear change in control or fall within the quite low percentage thresholds for the notification of minority interests mentioned in question 9.

      Answer contributed by Paulo L Casagrande from Stocche Forbes Advogados

      Last verified on Friday 9th February 2018

    • Brazil

      Any transactions qualified as a “concentration act” has to be submitted to CADE’s previous approval if the following turnover criteria are met:

      • at least one of the economic groups involved has registered annual gross sales equivalent or superior to 750 million reais in Brazil in the year preceding the transaction; and
      • at least another economic group involved in the transaction has registered annual gross sales equivalent or superior to 75 million reais in Brazil in the year preceding the transaction.

      For calculating the thresholds above, an economic group shall comprise (i) all companies subject to common control, and (ii) those in which any of such companies holds 20 per cent or more of the voting or total stock. If an investment fund is part of the transaction, its economic group shall include (i) the owners of at least 50 per cent of its quotas, and their respective economic groups, as well as (ii) all companies controlled by the fund and those in which it holds at least 20 per cent of the voting or total stock.

      Even if the parties meet these turnover thresholds, foreign-to-foreign transactions that can in no reasonable way affect the Brazilian market are exempt from mandatory notification to CADE. The leading case in which the authority acknowledged its lack of jurisdiction involved a joint venture for the provision of car maintenance services in Germany.[1]

      Finally, the BCL also grants CADE the power to request the parties to a certain transaction to submit its for review even though the thresholds for mandatory notification are not been met, within one year of its consummation.



      [1] Concentration Act 08700.001204/2013-13.

      Answer contributed by Paulo L Casagrande from Stocche Forbes Advogados

      Last verified on Friday 9th February 2018

    • Brazil

      CADE has jurisdiction to review any foreign-to-foreign transaction (i) that qualifies as a “concentration act” (based on questions 9 and 10); (ii) whose parties meet the applicable turnover thresholds (based on question 11); and (iii) that can potentially affect the Brazilian territory.

      Answer contributed by Paulo L Casagrande from Stocche Forbes Advogados

      Last verified on Friday 9th February 2018

  • Notification procedure, timing and penalties for non-compliance

    • Brazil

      All parties to a reportable transaction are jointly and severally liable for its submission to CADE.

      Answer contributed by Paulo L Casagrande from Stocche Forbes Advogados

      Last verified on Friday 9th February 2018

    • Brazil

      The fee for filing a merger with CADE is currently 85,000 reais. In principle, all parties are liable for paying the fee, being common practice the division of the payment among them.

      Answer contributed by Paulo L Casagrande from Stocche Forbes Advogados

      Last verified on Friday 9th February 2018

    • Brazil

      CADE’s Resolution No. 2/2012 established two standard forms for merger fillings. The first one is applicable for ordinary cases, and request detailed information about

      • the parties involved in the transaction and their respective economic groups;
      • the transaction;
      • the documents that formalise the transaction;
      • the relevant markets affected by the transaction and their proposed definition;
      • the supply and demand structure of such markets;
      • possible monopsony issues;
      • entry conditions and rivalry among players in such markets;
      • possible coordinated effects; and
      • a counterfactual (ie, the market scenario in case the transaction does not take place).

      Transactions notified under the fast-track proceeding are required to present only part of the information indicated in items (i) to (v) above, with a simplified notification form.

      Given the nature and the amount of information and documents to be submitted to CADE at the filing, and considering the peculiarities of each transaction and the respective competitive environment, the time to prepare a filing can vary significantly. Simpler cases are generally ready to be filed in two to five days, but more complex cases can take one or two months to prepare.

      Answer contributed by Paulo L Casagrande from Stocche Forbes Advogados

      Last verified on Friday 9th February 2018

    • Brazil

      There is no triggering event or legal deadline for notification, but, according to CADE's Internal Rules, it should take place preferably after the execution of a formal agreement binding the parties.

      Answer contributed by Paulo L Casagrande from Stocche Forbes Advogados

      Last verified on Friday 9th February 2018

    • Brazil

      There is no pre-notification requirements under the BCL or other regulations. Cases that are eligible for fast-track proceeding are generally submitted without any pre-notification interactions with the authority, based on the simplified notification form.

      On the other hand, the SG expects and actually recommends parties aiming at submitting a concentration act under the ordinary proceeding to informally contact the authority prior to the actual filling. These pre-notification interactions can involve phone calls and meetings, as well as the submission of a draft notification form. They are very useful for agency’s staff to better understand the markets involved, the areas that will demand further investigation and also to verify if the information provided by the parties is complete. In this sense, pre-notification interactions generally avoid a possible request of an amendment of the filing by the SG or its outright dismissal due to lack of information, as established in article 53, § 1º of the BCL.

      Answer contributed by Paulo L Casagrande from Stocche Forbes Advogados

      Last verified on Friday 9th February 2018

    • Brazil

      According to CADE’s Resolution No. 2/2012, the subscription of convertible securities must be notified whenever (i) the security gives the acquirer the right to indicate a member of management bodies or audit committees, as well as the rights related to vote or to veto competitively sensitive issues; and (ii) the future conversion in securities results in the acquisition of control or notifiable minority stakes, as indicated in question 9.

      Answer contributed by Paulo L Casagrande from Stocche Forbes Advogados

      Last verified on Friday 9th February 2018

    • Brazil

      Based on the BCL, CADE’s Internal Rules have established an exceptional hypothesis in which the parties may ask for preliminary authorisation to close the transaction before the final decision of the authority, once the following cumulative conditions are met:

      • There is no danger of irreparable damage to the competitive conditions of the relevant market(s);
      • The measures to be adopted are fully reversible; and
      • The party that required the authorisation proves that the acquired firm may suffer substantial and irreversible financial losses if the authorisation is not given.

      Such kind of authorisation has been issued only once by CADE, in a concentration act from December 2017 that involved the acquisition of an airport operator, which would not be able to meet a significant regulatory obligation had the authority not allowed the anticipated consummation of the transaction.[1] 

      Finally, CADE has issued in 2015 a detailed guide explaining acceptable and prohibited conducts among parties to a notifiable “concentration act”. It is available in English at  http://en.cade.gov.br/topics/publications/guidelines/guideline-gun-jumping.pdf.



      [1] Concentration Act 08700.007756/2017-51.

      Answer contributed by Paulo L Casagrande from Stocche Forbes Advogados

      Last verified on Friday 9th February 2018

    • Brazil

      Please refer to questions 7 and 8. As indicated in these responses, the SG generally issues a clearance decision for simple cases within 30 days. They correspond to the large majority of concentration acts reviewed by CADE (more than 80 per cent).  

      More complex cases can take up to 240 days, extendable to another 90 days. Such statutory limits start running on the date a complete notification is filed with CADE, and, once this happens, they cannot be suspended. In view of these strict time limits, the authority only accepts the notification once it believes it has all relevant information that can be provided by the parties in order to start the competitive assessment of the transaction, often after informal but well-structured pre-notification discussions with the parties. 

      Answer contributed by Paulo L Casagrande from Stocche Forbes Advogados

      Last verified on Friday 9th February 2018

    • Brazil

      The BCL does not explicitly provide post-clearance obligations for a clearance decision to remain valid.

      Answer contributed by Paulo L Casagrande from Stocche Forbes Advogados

      Last verified on Friday 9th February 2018

    • Brazil

      Please refer to question 7. According to CADE’s Resolution No. 2/2012, the following types of transactions are eligible for the fast-track proceeding:

      • Classic or cooperative joint ventures, by which a new entity is structured to develop activities in a different market of its parent companies, or to take over some functions related to their parent companies’ activities.
      • Substitution of economic agent, ie, the acquisition of a company that does not undertake activities in the same markets or in vertically related markets of the acquiring company.
      • In case of horizontal overlap, whenever the combined market share of the parties to the transaction is under 20 per cent.
      • In case of vertical integration, whenever the combined market share of the parties to the transaction does not surpass 30 per cent in any vertically related market.
      • Absence of casual link, characterised by a Herfindahl–Hirschman Index (HHI) variation lower than 200 and a combined market share lower than 50 per cent.

      Notwithstanding the above mentioned, the ultimate decision to accept or not a case under the fast track proceeding is at the SG’s discretion.

      Answer contributed by Paulo L Casagrande from Stocche Forbes Advogados

      Last verified on Friday 9th February 2018

    • Brazil

      CADE’s Internal Rules establishes a special regime for public takeover bids, which can be notified after their announcement and liquidated before the authority’s clearance. However, the voting rights derived from the acquired shares shall not be exercised until CADE’s final decision.

      As per private equity transactions or corporate restructurings, there are no special rules.

      Answer contributed by Paulo L Casagrande from Stocche Forbes Advogados

      Last verified on Friday 9th February 2018

    • Brazil

      Yes, CADE can informally be consulted for guidance on notification requirements on a no-names basis. This can be helpful, but the parties have to be aware that any advice provided in such circumstances is non-binding.

      Answer contributed by Paulo L Casagrande from Stocche Forbes Advogados

      Last verified on Friday 9th February 2018

    • Brazil

      Closing a transaction subject to mandatory filing before CADE’s final approval can be characterised as a violation of the gun-jumping provisions of the BCL, and result in the application of the sanctions of nullity of the acts and fines ranging from 60,000 to 60,000,000 reais.

      CADE imposed the record 30 million reais fine to a gun-jumping offence in 2015, after two foreign companies acknowledged their transaction had been consummated before the authority’s approval.[1] 

      Also in 2015, CADE has issued its Guidelines for the Analysis of Previous Consummation of Merger Transactions, which illustrates the types of activities that can be deemed illegal by the authority. They can be separated into three major groups: (i) information exchange between the parties; (ii) contractual terms governing the relationship between the parties before closing; and (iii) actual conduct of the parties before the concentration act’s approval by the antitrust authority. 

      According to the Guidelines, the parties must keep their structures and competitive behaviour unchanged until CADE’s final decision. They are not allowed to (i) transfer any asset; (ii) cause any influence over one another; and (iii) exchange sensitive or confidential information that is not strictly necessary for the execution of a formal and binding agreement.



      [1] Concentration Act Investigation 08700.011836/2015-49 (Cisco/Technicolor case). 

      Answer contributed by Paulo L Casagrande from Stocche Forbes Advogados

      Last verified on Friday 9th February 2018

  • The review process, confidentiality and the role or influence of third parties

    • Brazil

      The BCL provides CADE with broad powers to review concentration acts and investigate their potential competitive harms. The authority can request information and documents from parties, competitors, clients, suppliers, associations, government agencies, or any other third party. Moreover, the submission of deceitful or misleading information to CADE is punishable with a fine ranging between 5,000 and 5,000,000 reais.

      The SG usually issues information requests to customers and competitors in many medium to high complexity concentration acts submitted under the ordinary proceeding. The information obtained is considered very important and is often used by the SG and the Tribunal to support their decisions.

      Answer contributed by Paulo L Casagrande from Stocche Forbes Advogados

      Last verified on Friday 9th February 2018

    • Brazil

      The parties as well as third parties providing information to the authority can request confidential treatment to information considered sensitive or that may harm their business if publicised. CADE usually accepts such requests whenever they involve information and documents related to the financial condition of the company, list of clients or suppliers, prices and installed capacity.

      Answer contributed by Paulo L Casagrande from Stocche Forbes Advogados

      Last verified on Friday 9th February 2018

    • Brazil

      The notification and its content is publicised after the publication of the notice in the Official Gazette, although the Parties may request confidentiality over part of the information provided, eg, financial data and lists of clients and suppliers. In this case, the parties must file two versions of the notification, one with all the information requested in the standard form (which only the parties and CADE’s staff will access) and one without the confidential information (which will be publicised at CADE’s electronic system). 

      Answer contributed by Paulo L Casagrande from Stocche Forbes Advogados

      Last verified on Friday 9th February 2018

    • Brazil

      CADE has signed cooperation agreements with the United States, the European Commission, Argentina, Canada, Chile, China, Colombia, Equator, France, Japan, Korea, Peru, Portugal and Russia. These agreements only allow the exchange of public information between the competition authorities. In other to exchange confidential information about ongoing concentration acts, CADE needs to obtain a waiver from the interested parties.

      Answer contributed by Paulo L Casagrande from Stocche Forbes Advogados

      Last verified on Friday 9th February 2018

    • Brazil

      Once the notice is published in the Official Gazette, third parties can access all public documents regarding the concentration act, including the public version of the notification form as well as information requests sent by CADE.

      Moreover, according to CADE’s Internal Rules, any third party whose rights or interests may be affected by the final decision in the concentration act (such as competitors, suppliers, customers or trade associations) may request to the SG to be a formal interested third party in the concentration act proceeding. Such request has to be submitted within 15 days of the publication of the notice in the Official Gazette. If the request is accepted, these interested third parties have standing to appeal a SG’s clearance decision to the Tribunal.

      Answer contributed by Paulo L Casagrande from Stocche Forbes Advogados

      Last verified on Friday 9th February 2018

    • Brazil

      Please refer to question 31 above. An example of a successful appeal by a third party occurred within Concentration Act 08700.006723/2015-22, where a decision by the SG to unconditionally clear a joint venture between several TV broadcasters was reviewed by the Tribunal, which ultimately imposed several restrictions to the transaction.

      Answer contributed by Paulo L Casagrande from Stocche Forbes Advogados

      Last verified on Friday 9th February 2018

    • Brazil

      Please refer to questions 8 and 20. Pre-notification discussions with the authority are recommended in more complex transactions in order to i) allow the SG’s staff to better understand the relevant markets and ii) avoid the submission of an incomplete notification form, what can result in a delayed start of the review period. 

      Answer contributed by Paulo L Casagrande from Stocche Forbes Advogados

      Last verified on Friday 9th February 2018

    • Brazil

      CADE’s staff usually keep in contact with the parties in order to share their concerns and views about the transaction under investigation. The parties have the opportunity to meet with CADE’s staff in order to clarify any doubts and to present any information or document that may assist in the decision-making process (including expert opinions from economists).

      Answer contributed by Paulo L Casagrande from Stocche Forbes Advogados

      Last verified on Friday 9th February 2018

  • Substantive analysis and remedies

    • Brazil

      Yes; in August, 2016, CADE issued the new Guidelines for Horizontal Mergers, which substituted the one issued in 2001 by the then Secretariats of Economic Law (SDE) and of Economic Monitoring (SEAE).

      The Guidelines set parameters and proceedings for the substantive assessment of transactions involving competitors, including the analysis of the affected markets (conditions to entry, rivalry and effective competition, among others), the causal link between the transaction and potential damage to competition, as well as efficiencies which can counteract possible negative effects.

      Answer contributed by Paulo L Casagrande from Stocche Forbes Advogados

      Last verified on Friday 9th February 2018

    • Brazil

      The BCL determines that “concentration acts involving the elimination of competition in a substantial portion of the relevant market, which could create or strengthen a dominant position or that can result in the domination of the relevant market of goods or services shall be prohibited” by CADE (article 88, paragraph 5).

      Such statutory provision has not resulted in a clear, articulated test for the substantive assessment of mergers by CADE, similar to those developed in the United States or the European Union. In any event, the Brazilian antitrust agency generally follows analytical steps analogous to those of its foreign counterparts while evaluating concentration acts. Its decisions usually indicate that its primary concerns are related to consumer welfare effects, especially the new entity’s ability to the raise prices after the transaction takes place.

      Answer contributed by Paulo L Casagrande from Stocche Forbes Advogados

      Last verified on Friday 9th February 2018

    • Brazil

      There are no explicit safe harbours protecting a transaction from potential concerns by the competition authority. That said, CADE usually does not raise competition concerns in transactions leading to combined market shares below 20 per cent, a threshold provided by the BCL itself for the identification of a "dominant position".

      Answer contributed by Paulo L Casagrande from Stocche Forbes Advogados

      Last verified on Friday 9th February 2018

    • Brazil

      Non-competition issues are generally not taken into account by CADE in the review process. The analysis of economic efficiencies, on the other hand, is required by article 88, para. 6 of the BCL, which states that concentration acts that raise competition concerns can be approved if they generate sufficient economic efficiencies that are fairly shared with consumers.

      Based on that, the Guidelines for Horizontal Mergers provide that the evaluation of economic efficiencies is one of the analytical steps of merger review analysis. However, the document sets up several requirements for efficiencies to be accepted as a valid factor counteracting potential anticompetitive effects derived from a transaction. Moreover, in its decision-making practice, CADE tends to be somehow skeptical of efficiencies being sufficient in themselves to justify the approval of restrictive merger transactions.

      Answer contributed by Paulo L Casagrande from Stocche Forbes Advogados

      Last verified on Friday 9th February 2018

    • Brazil

      Yes. The parties can propose remedies still during the investigation phase to the SG. If such proposal is accepted, it will be formalised in a draft “Concentration Act Agreement” that will be recommended by the SG to the Tribunal.

      If no remedies are negotiated with the SG, the investigative arm will object the transaction, and, according to CADE’s Internal Rules, the parties are entitled to submit a formal remedy proposal up to 30 days after the SG has issued its formal decision.

      If this is the case, the parties may then negotiate remedies with the Reporting Commissioner at the Tribunal. In case these discussions are successful, they will result in a Concentration Act Agreement, which once approved by CADE’s Tribunal becomes an integral part of the authority’s final clearance decision.

      The BCL does not indicate any preference between structural and behavioural remedies. Therefore, it is up to the SG and the Tribunal to decide the most appropriate measure at any given concentration act. In recent cases, CADE’s remedies included: (i) selling brands of products to competitors; (ii) selling a group of plants, distribution centres and other facilities to one single competitor, so as to enable the entry of a new viable player in the market; (iii) a temporary suspension of the use of certain brands for commercial purposes in the Brazilian territory; and (iv) the prohibition of executing any exclusive dealing agreement with downstream companies.

      Unless provided otherwise in the specific decision, the BCL allows parties to complete the merger before the remedies are fully complied with. It is important to stress, however, that if the parties do not comply with the remedies, CADE’s final decision can be reviewed by the authority.

      Finally, remedies can be enforced, via specific performance and judicial intervention. The provision of specific fines in case of non-compliance is also common.

      Answer contributed by Paulo L Casagrande from Stocche Forbes Advogados

      Last verified on Friday 9th February 2018

    • Brazil

      Negotiated remedies are fairly common for complex cases. On the other hand, except in the context of market testing, third parties are usually not able to challenge these remedies.  

      Answer contributed by Paulo L Casagrande from Stocche Forbes Advogados

      Last verified on Friday 9th February 2018

    • Brazil

      According to CADE’s Internal Rules, the Tribunal’s decision that prohibits or conditionally approves a concentration act may be reconsidered based on a new fact or document capable of supporting a more favourable decision. There has not been any recent decision involving this hypothesis.

      Answer contributed by Paulo L Casagrande from Stocche Forbes Advogados

      Last verified on Friday 9th February 2018

  • Judicial review

    • Brazil

      CADE’s decisions are final, and cannot be reviewed by any agency within the Federal Executive Branch. On the other hand, they are subject to judicial review by Federal Courts, which up to know are not specialised in antitrust issues. A typical judicial review proceeding may take up to 10 years to be concluded.

      Answer contributed by Paulo L Casagrande from Stocche Forbes Advogados

      Last verified on Friday 9th February 2018

    • Brazil

      Considering the lengthy and costly judicial review proceeding, as well as the suspensory nature of Brazilian merger review regime, there are few incentives for parties to challenge CADE’s decision in court. Whenever CADE raises competition concerns, the parties often seek negotiated remedies with the authority to move forward with the transaction and avoid litigation. A recent exception was one of the parties to the JBJ/Mataboi case, which sued the authority in order to annul the prohibition decision adopted on 10 October 2017. However, a preliminary injunction was denied and the litigation is still ongoing.[1]



      [1] Ordinary Proceeding 1015285-40.2017.4.01.3400, before the 20th Federal Court of the Federal District.

      Answer contributed by Paulo L Casagrande from Stocche Forbes Advogados

      Last verified on Friday 9th February 2018

  • Case law

    • Brazil

      Many of the notable merger control decisions adopted in 2017 were briefly described in the response to questions 6 (blocked decisions) and 19 (interim authorisation for early closing).

      There are some other decisions by CADE that can be highlighted due to their respective substantive and procedural features. 

      On 22 March 2017, CADE’s Tribunal approved the merger between BM&FBovespa and Cetip, which resulted in the formation of a single company providing key services for stock and over-the-counter markets in Brazil now known as B3 – Brasil, Bolsa, Balcão.[1] The authority entered into a Concentration Act Agreement with the parties providing for several behavioural remedies, especially concerning access by third parties to the infrastructure of the Central Depositary Services to be offered by the new entity, which has some natural monopoly features. During the entire investigation, the antitrust agency was in close contact with CVM, the Brazilian Securities and Exchange Commission.

      Another interesting case was CADE’s review of the global merger between chemical companies Dow and Dupont, a transaction conditionally approved on 17 May 2017.[2] In order to solve some competitive concerns of the authority, the parties agreed with some divestments of assets related to their materials science, crop protection and seed divisions, with most of these remedies derived from direct coordination between the Brazilian authority and its counterparts abroad – specially the United States Department of Justice and the European Commission. Moreover, the authority has paid significant attention to the effects of the transaction over incentives to invest in technological innovations.

      Finally, on 18 October 2017 CADE conditionally approved another well-known global merger: the acquisition of media conglomerate Time Warner by telecom operator AT&T.[3] Owing to concerns of potential discrimination derived from the vertical integration between TV programming services by Time Warner and the pay-TV operator owned by AT&T in Brazil (Sky Brasil), CADE approved the deal by accepting behavioural remedies to be in force within five years, which requires the parties to keep Time Warner and Sky Brasil as separate, independently managed entities. Each of these companies will also be subject to several non-discrimination obligations while dealing with third parties and the constant supervision of an independent monitor. In its decision, CADE explicitly acknowledged that these remedies were consistent with those adopted in Chile and Mexico.



      [1] Concentration Act 08700.004860/2016-11.

      [2] Concentration Act 08700.005937/2016-61.

      [3] Concentration Act 08700.001390/2017-14.

      Answer contributed by Paulo L Casagrande from Stocche Forbes Advogados

      Last verified on Friday 9th February 2018

    • Brazil

      Based on interviews and presentations by key staff, the following topics will possibly be in evidence in the coming year:

      Coordinated effects. CADE is currently reviewing some transactions involving mergers among competitors in oligopolistic markets. The final decisions on these cases may provide more detailed guidance from the authority as per the theory of harm to be employed in future similar cases.   

      Remedies guidelines. CADE is reportedly developing specific guidelines to instruct companies on the design of acceptable remedies in transactions that raise competition concerns. In view of the recent blocking decisions by the authority, such guidelines will be key for parties planning merger transactions with higher complexity, so that they can consider in advance strategic scenarios involving appropriate divestments and commitments to be proposed to the authority.  

      Answer contributed by Paulo L Casagrande from Stocche Forbes Advogados

      Last verified on Friday 9th February 2018

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