merger control in brazil – cade – 2017 latin american and caribbean competition forum

Merger Control in Brazil

Amanda Athayde

Chief of Staff of the General Superintendence and Head of the Leniency Unit amanda.martins@cade.gov.br

16 X 74 fast-track non fast-track

Number of days for a merger review

Outline

1. CADE’s Structure and recent legislative modifications

2. Merger Control Statistics

3. Guidelines on Horizontal Mergers and Gun Jumping 4. Main cases in 2016: a quick overview

Outline

1. CADE’s new structure and recent legislative modifications

2. Merger Control Statistics

3. Guidelines on Horizontal Mergers and Gun Jumping 4. Main cases in 2016: a quick overview

1. CADE’s Structure and recent legislative modifications

Former Structure – Law 8884/94 New Structure: Law 12.529/11

Cade Administrative Tribunal

Seae

Mergers

SDE

Anticompetitive Conducts

Cade Tribunal

General Superintendence (SG) Department of Economic Studies

Seae

Advocacy

1. CADE’s Structure and recent legislative modifications

1962 CADE was created

1994 Law No. 8884

No merger control

2012 Law No. 12529

Post-merger control Pre-merger control

Low degree of International cooperation

High degree of International cooperation

1. CADE’s Structure and recent legislative modifications

Filing

Fast track Non-fast track

Clearance Clearance Remedies

General Superintendence

Challenge

Tribunal Decision Remedies

Decision Request for further review

Filing less formality: frequent contact with the parties to guarantee the quality and

accuracy of the presented information

1. CADE’s Structure and recent legislative modifications

240 days 60 days

90 days 120 days - GS 120 days - Tribunal

Fast-track cases: 30 days Non fast-track cases: 240 + 60 or 90 days (maximum 330 days)

Outline

1. CADE’s new structure and recent legislative modifications

2. Merger Control Statistics

3. Guidelines on Horizontal Mergers and Gun Jumping 4. Main cases in 2016: a quick overview

• Merger notifications and decisions

2. Merger Control Statistics in Brazil

92% Cleared without restrictions (353 SG and 7 Tribunal) 2% Approved with restrictions (5 settlements and 1 unilateral imposition of conditions Tribunal) 5% (19) non notifiable 1% (5) filed No cases rejected by CADE (although 1 case withdrawn by the parties)

• Time frame analysis (including both the SG and the Tribunal)

2. Merger Control Statistics in Brazil

Non fast-track cases (complexes): ordinary filing proceeding (74 days) Fast-track cases: simplified filing proceeding (16 days) Average (28 days)

No “stop-the-clock” possibility

Outline

1. CADE’s new structure and recent legislative modifications

2. Merger Control Statistics

3. Guidelines on Horizontal Mergers and Gun Jumping 4. Main cases in 2016: a quick overview

• Update of the 2001 Guidelines • Aligned with the new pre-merger review system • Steps of the analysis (not mandatory):

• Definition of the relevant market • Analysis of the horizontal concentration level • Assessment of the probability of use of market power

after the merger • Valuation of the existing purchasing power in the

market • Weighting of economic efficiencies inherent to the

merger • Complementary methods: simulations, contra

factual analysis and maverick eliminations

3. Guidelines on Horizontal Mergers and Gun Jumping

• Penalties: nullity of the transaction and fines, which ranges from BRL 60,000 to 60 million

• Guidelines structure: • Gun Jumping “categories” and examples

• Exchange of information between companies involved in merger transactions

• Contractual clauses governing the relationship • Activities before and during the negotiation

• Procedures to mitigate the risks • Penalties possibly imposed

3. Guidelines on Horizontal Mergers and Gun Jumping

New Draft Guidelines on Merger Remedies: expected to 2017

Outline

1. CADE’s Structure and recent legislative modifications

2. Merger Control Statistics

3. Guidelines on Horizontal Mergers and Gun Jumping 4. Main cases in 2016: quick overview

4. Main Cases: quick overview

• Merger cases:

• Bradesco/HSBC (Aug 2016)

• Hypermarcas/Reckit Benckinser (Sept 2016)

• John Deere/Precision Planting (Feb 2017)

4. Main Cases: quick overview

• Gun Jumping cases:

• 5 cases in 2016 (11 since the new Law 12.529/2011)

• International merger: Cisco Systems Inc./Technicolor S/A

• National merger: Shimano/Blue Cycle