The Administrative Council for Economic Defense (Cade) approved this Wednesday (25), with restrictions, the acquisition of all the shares issued by the Big Brasil group by Atacadão, a Brazilian affiliate of the Carrefour group. The operation was guaranteed subject to the execution of a merger control agreement (ACC), which provides for the divestment of stores and other obligations.
In his vote, the reporting adviser, Luiz Hoffmann, said that no competition concerns were identified regarding the wholesale distribution markets and fuel retail stations.
In the self-service retail segment – supermarkets, hypermarkets, cash and carry stores and shopping clubs – the combination of the Carrefour group’s businesses with the Big group has the potential to generate market power in nine different locations, according to a note released by Cade. The Carrefour and Big groups are, respectively, the first and third largest economic agents in Brazil.
In view of this, the ACC aims to rule out possible anti-competitive effects. The agreement provides for the divestment of self-service units currently owned by the Big group, involving the municipalities of Itabuna, in Bahia; Juazeiro do Norte, in Ceará; Maceió; Olinda, Paulista, and Recife, in Pernambuco, Gravataí, Santa Maria and Viamão, in Rio Grande do Sul.
Through the agreement, behavioral obligations to be fulfilled by the companies were established. The Carrefour and Big groups are committed to preserving the viability, attractiveness and competitiveness of the stores subject to the structural remedy until the divestment is completed.
According to CADE, the companies will also not be able to repurchase the divested assets for a period determined in the agreement, whose term is confidential, and they are obliged to notify any operations involving supermarkets, hypermarkets, wholesale and shopping clubs, even if they do not reach the parameters of mandatory notification of mergers to the board.
