Activities report 2016

January 2017

Mergers

691 684626

377426 404 381

0

100

200

300

400

500

600

700

800

2010 2011 2012 2013 2014 2015 2016

(*) In 2012, 143 mergers were notified under the new competition law, Law 12,529/11.(**) In 2016, there were 5 notifications of M&As under the previous law, Law 8,884/94.

Merger and acquisition notification filings (Law 12,529/11)

6 2%

19 5%

5 1%

360 92%

Approved without restrictions (353 by GeneralSuperintendence and 7 by the Tribunal)

Approved with restrictions (5 with agreementsand 1 with restrictions - Tribunal)

Rejected Cases (Tribunal)

Non-Admissible Files - out of scope (GeneralSuperintendence)

Filed (Tribunal + General Superintence)

Merger and acquisition proceedings per type of decision(both Laws 12,529/11 and 8,884/94)

Total = 390*

* Includes M&As approved without restrictions, approved with restrictions , non-admissible files (out of scope) and filed. There were no rejected cases by the Tribunal.

Mergers and acquisitions: inputs and outputs (Laws 12,529/11 and 8,884/94)

389 390

0

50

100

150

200

250

300

350

400

450

500

Inputs

Outputs

Other statistics related to M&As2012 2013 2014 2015 2016 TOTAL

DECISIONS OF THE GENERAL SUPERINTENDENCE 114 351 423 405 382 1675

SUBMITTED MERGERS AND ACQUISITIONS 140 380 428 406 384 1738

ORDINARY PROCEEDINGS / SUBMITTED M&As (%) 12.3% 10.9% 17.1% 13.4% 23.3% 15.9%

APPROVALS WITHOUT RESTRICTIONS * / SUBMITTED M&As (%) 95.6% 99.1% 96.5% 94.6% 92.7% 95.8%

CONTESTED CASES – 2nd PHASE 2 4 10 7 9 32

GUN JUMPING 0 3 2 2 1 8

NON-ADMISSIBLE FILES (Out of scope) 5 2 7 18 19 51

APPEALS BY THIRD PARTIES 0 0 9 6 4 19

STATEMENT OF COMPLEXITY 1 4 5 5 8 23

AMENDMENTS 10 30 44 44 33 161

ORDERS THAT CONVERTED FAST-TRACK INTO ORDINARY PROCEEDINGS 6 18 18 16 20 78

AMENDMENTS / SUBMITTED M&As (%) 7.0% 7.9% 10.2% 10.5% 8.4% 9.1%

AMENDMENTS OF FAST-TRACK PROCEEDINGS / FAST-TRACK PROCEEDINGS (%) 1.7% 3.6% 8.8% 8.6% 6.8% 6.5%

AMENDMENTS OF ORDINARY PROCEEDINGS / ORDINARY PROCEEDINGS (%) 47.1% 43.9% 17.8% 25.9% 14.6% 24.1%

AMENDMENTS OF M&As NOTIFIED AS ORDINARY PROCEEDINGS / ORDINARY PROCEEDINGS (%)

17.6% 12.2% 5.5% 11.1% 2.2% 7.3%

*Note: Approved without restrictions exclude: contested cases, gun jumping, non-admissible files and withdrawns.

Contested mergers and acquisitions(2nd phase)

2

4

10

7

9

2012 2013 2014 2015 2016

Main M&As of 2016

- Unipar-Carbocloro/Solvay

- BM&FBovespa/Cetip

- John Deere/Precision Planting

- New Credit Bureau

- Latam/IAG

- Hypermarcas/Reckit Benckinser

- Bradesco/HSBC

- JV Itaú/Master

- Saint-Gobain/Sicbras

- Fedex/TNT

Average time of merger and acquisition’s assessment(General Superintendence + Tribunal)

40

70.4

7984.7

73.8

18.7 19.4 20.5 18 16

154

20.926.4

30.2 27.7 27.6

0

20

40

60

80

100

120

140

160

180

2011 2012 2013 2014 2015 2016

Day

s

Year

Ordinary Fast-track Total

Average time of M&A ordinary proceedings’ assessments in the General Superintendence

40

63.966.7 70.7 68.1

40

54 55.664.3 59.4

0

159

131

117

133

0

20

40

60

80

100

120

140

160

180

2012 2013 2014 2015 2016

Day

s

Ordinary Proceedings Excluding contested cases Contested cases (2nd phase)

Administrative procedures for merger assessment andcomplaints

2015 2016

Received complaints * 82 163

Filed complaints 66 99

Initiated administrative procedures 5 8

Filed administrative procedures (no notification required) 4 4

Administrative procedures which decisions required a notification: 2 10

Gun Jumping – Law 12,529/2011 0 4

CADE’s requirement of ex-post notification (article 88, paragraph 7º) 0 1

Lateness – Law 8,884/94 2 5

* Considers 3 statements of a transaction submitted by the parties to the General Superintendence, in 2016.

Anticompetitive Conducts

Proceedings under analysis at the General Superintendence

320

232 242 238

275

jan/12 jan/13 jan/14 jan/15 jan/16

Development per year33

45

47

101

47

2Complaint

Preparatory Procedure

Administrative Inquiry

Administrative Proceeding

Request

Administrative Proceeding forthe Imposition of IncidentalProcedure Sanctions

Inputs and outputs – General Superintendence

789 complaints were received by the “report a violation” website tool

Development per type of proceeding

Balanced stockpile ofproceedings

25

116

160

244

246

67

228

152

221

258

2012 2013 2014 2015 2016

Development per year

Inputs

Outputs

147

18 8 10

60

3

246

116

3921 29

47

1 1

258

Inputs

Outputs

Administrative Proceedings (PAs) – General Superintendence

Development per year Result of the opinions issued regarding PAs

30

5

14

21

37

26

206

56

4039

29

2011 2012 2013 2014 2015 2016

Inputs

Outputs

34

27

20

6

129

2014 2015 2016

Condemnation

Filing

General Superintendence opinions issued related to Cease andDesist Agreements (TCCs) and Administrative Proceedings (PAs)

Opinions on administrativeproceedings sent to the Tribunal

recommending:

Condemnation 20

Filing of theProceeding

9

TCCs approval 47

Condemned

26%

Filed

12%

Approved TCC62%

2016

Condemned25%

Filed75%

2012

Condemned72%

Filed25%

Approved TCC3%

2013

Condemned66%

Filed14%

Approved TCC20%

2014

Condemned41%

Filed18%

Approved TCC38%

TCC completion

2%

2015

Main Administrative Proccedings initiated andconcluded by the General Superintendence in 2016

Initiated

- Cartel – Exchange rates BRL

- Cartel – Real estate brokers

- Cartels – Auto-parts

- Cartels – Liquefied Petroleum Gas

- Cartel – Public bids in municipalities of theState of Pernambuco

- Cartel – Resins

- Cartel – PVC Pipelines

- Cartel – Shipping and line maritime routes

- Cartel – Wheat flour

- Cartel – Public bids in public works in poorneighborhoods of Rio de Janeiro

Concluded

- Gemini/White Martins/Petrobras

- ANFAPE

- Cartel – Mobile recharge market

- Cartel – Gas Stations in the city of São Luís

- Cartel – DRAM

- Cartel – ODD

- Cartel – Parking lots in São Paulo

- Cartel – Flexible packaging

- Cartel – Chlorine

Duration of proceedings – General Superintendence

* Approximate Time

Time reduction of the proceedings

49%

57%

67%

25%

5%

67%73%

78%

17%

3.69%

66%73%

79%

13%

0.73%0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Up to 1 year Up to 2 years Up to 3 years More than 5 years More than 10 years

2014

2015

2016

Leniency• Leniency agreement applications:

requests for markers increased510% (granted and waiting list).

• 11 new leniency agreements havebeen signed (historical record).

• 6 leniency plus have beengranted (historical record).

• For each Leniency Agreement, one or more were rejected orwithdrawn.

• In 90% of the cases, theapplication for a Cease and DesistAgreement was a posteriori.

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Leniency Plus 3 6

Addenda 1 2 1 1 4 5 6

Leniency Agreements 1 1 1 4 1 2 4 8 1 10 1 6 10 11

1 1 1

4

1 24

8

1

10

1

6

10 111

2

1

1

4

5

6

3

6

0

5

10

15

20

25

Dawn raids

2

1

0

4

5 5

1

4

1

6

2

5

2 2

0

1

2

3

4

5

6

7

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Inputs/outputs of proceedingsand judgments – Tribunal

Inputs in 2016 – Tribunal

Total 5

3 3

54

65

1

3

23

4

4

1

1

1

1

1

1

1

2

1

1

1

1

0

2

4

6

8

10

12

14

Márcio de Oliveira Gilvandro de Araujo Alexandre Cordeiro João Paulo Paulo Burnier Cristiane Alkmin

Merger Review

Appeal

Administrative Proceeding for theImposition of Incidental ProcedureSanctions

Consultation

Administrative Procedure for MergerAssessment

Merger

Administrative Proceeding

13

11 101

9 9

Inputs/outputs of proceedings – Tribunal

* Proceedings with pending judgment of motions for clarification were not considered.

Total 1

1

2

3 3

2

51

1

2

1

1 1

2

0

1

2

3

4

5

6

7

8

9

10

Márcio de Oliveira Gilvandro de Araujo Alexandre Cordeiro João Paulo Paulo Burnier Cristiane Alkmin

Request to access the case records

Consultation

Merger

Administrative Proceeding

4 4 5 2 8

Proceedings judged by theTribunal

* The procedures concluded by decision orders approved by the Plenary and the procedures brought to judgment by the President were not considered.

Total 24 22 16 11 20 10

9

7

45

4

1

1

2

2

2 4

5

2

2

2

5

3

1

1

1

21

1

1

2

1

1

1

1

1

1

1

7

6

5

3

3

1

1

1

0

5

10

15

20

25

30

Márcio de Oliveira Gilvandro de Araujo Alexandre Cordeiro João Paulo Paulo Burnier Cristiane Alkmin

Request for review

Motions for Clarification

Preliminary Investigation

Precautionary Measures

Merger Review

Appeal

Administrative Proceeding for the Imposition of IncidentalProcedure Sanctions

Consultation

Administrative Procedure for Merger Assessment

Request

Merger

Administrative Proceeding

14 15 12 16 1813 12

41 2

22

3939

19

0

10

20

30

40

50

60

2010 2011 2012 2013 2014 2015 2016

Condenmed

Filed

Judged administrative proceedings – Tribunal

Cease and Desist Agreements (TCCs)

11

3 5

53

36

5861

0

10

20

30

40

50

60

70

2010 2011 2012 2013 2014 2015 2016 (54 Approved + 6 Rejected + 1 out of scope)

Note: Out of the 54 approved aplications, 47 were negotiated by the General Superintendence.

Highlights – pecuniarycontributions:

- Cartel – Exchange rates (off shore) BRL 121,010,000.00

- Cartel – OrangesBRL 300,888,712.34

Main judged administrative proceedings in 2016

- Liquified Petroleum Gas (LPG) in the State of Pará- DRAM- Special foods- Hemoderivatives- Refrigerator compressors- Sodium perborates- Bid-rigging in hospital laundry services- CRT Glass- Cartel of antiretroviral drugs- Ports in the States of Bahia and Rio Grande do Sul (unilateral conducts)- Marine hose cartel (individuals)- Radius Clause- Gemini Consortium

Imposed fines and pecuniary contributions

Development of the imposed fines in Administrative Proceedings

Development of the Pecuniary Contributionsresulted from Cease and Desist Agreements

BRL 492,011,098

BRL 3,321,733,616

BRL 286,890,096BRL

196,637,612

2013 2014 2015 2016

BRL 101,671,132

BRL 41,615,069

BRL 168,493,150

BRL 466,834,865

BRL798,943,417

2012 2013 2014 2015 2016

Collection to the Fund for the Defense of Diffuse Rights (FDD)

25, 361,528 31,285,152 45,420,59891,857,098

169,098,785

523,954,270

700,381,945

0

100.000.000

200.000.000

300.000.000

400.000.000

500.000.000

600.000.000

700.000.000

800.000.000

2010 2011 2012 2013 2014 2015 2016

BRL

BRL

BRL

BRL

BRL

BRL

BRL

BRL

Collection to the FDD per type of proceeding

2016

Plea agreement BRL 5,448,408.79 0.78%

Voluntary payment BRL 20,286,402.74 2.90%

Cease and DesistAgreement – TCC

BRL 651,809,063.05 93.06%

Merger Control Agreement– ACC

BRL 18,899,221.06 0.56%

Merger Control Agreement– TCD (under Law 8,884/94)

BRL 3,938,850.23 2.70%

TOTAL BRL 700,381,945.87 100.00%

Other institutionalinformation

32

Resolutions and guidelines

TCC Guidelines

CompetitionComplianceGuidelines

LeniencyGuidelines

Horizontal MergersGuidelines (availableonly in portuguese)

New resolutions:

₋ Amendments of CADE’s Internal Regulation (RICADE) regarding TCCs, leniency plus etc.

₋ Establishment of 30 days deadline to complete the analysis of fast-track mergers

₋ Amendment of the Resolution n. 3 to enable a greater proportionalityin the fines calculation basis

₋ Regulation of the notification for associative contracts

₋ Memorandum of Understanding with the Federal Prosecution Service of the State of São Paulo

₋ Regulation of the activities of CADE’s Representative of the Federal Prosecution Service

Public consultation:

₋ Access to confidential documents and private antitrust damageactions

33

Attorney General’s Office

40

75 81

221

197

39

89

5365

143

0

50

100

150

200

250

2012 2013 2014 2015 2016

Comparative lawsuits per year

Lawsuits submitted by CADE Lawsuits against CADE

Relevant Cases in 2016: ₋ UBER₋ CSN/USIMINAS₋ Gemini Consortium

71% 69%

82%

69% 70%

29% 31%

18%

31% 30%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

2012 2013 2014 2015 2016

CADE’s decisions upheld by the Judiciary

Favourable Decisions Unfavourable Decisions

34

Departament of Economic StudiesRelevant cases:₋ Fuel cartels (improvement of screening instruments for cartel detection)₋ Exchange market – offshore (pecuniary contribution calculation method)₋ Reckitt-Hypermarcas (simulation of mergers and remedies)

Contributions:₋ Ministry of Mines and Energy (MME): “Competition environment in the

petroleum refining industry and liquid fuels distribution market: CADE’s contributions”

₋ Secretariat of Partnerships and Investment Plan (PPI): “Measures to enhance competition in public bids: CADE’s contributions”

₋ Institute for Applied Economic Research (Ipea): resumption of the partnership and definition of the Work Plan

Studies Awarded:₋ Competition Analysis of the Uber case: honorable mention at the 2015-

2016 Advocacy Contest, promoted by the International Competition Network (ICN) and the Word Bank Group

Oil and Gas 32%

Chemicals 17%

Transportation 14%

Health and

Education11%

Financial market

9%

Others 17%

65 Publications

More than 80% of increase in the number of technicalopinions, compared to the average of 2009-2015

35

Management Office

Expansion of the eletronic services:

₋ Consultation request₋ Oral argument request₋ Request of priority in a judgment session

Concluded Projects:₋ New website₋ CADE in figures₋ Voting Panel

417

41 41 3944 41 47 48 4249 50 51 557163

37 38 42 51

160 145177 186 203

0

50

100

150

200

250

2012 2013 2014 2015 2016

Development of the Workforce

CADE’s civil servants Position of Responsability (for non-civil servants)

Federal Public Policy and Management Officers Civil servants from other bodys

Total Linear (Total)

89,9% 93,9% 93,8% 88,3%99,7%

0,0%

20,0%

40,0%

60,0%

80,0%

100,0%

R$-

R$5.000.000,00

R$10.000.000,00

R$15.000.000,00

R$20.000.000,00

R$25.000.000,00

R$30.000.000,00

2012 2013 2014 2015 2016

Budget Execution

Dotação Execução LOA % Executado