Notícias
AGREEMENT
CADE conditionally clears acquisition of Refinaria Mucuripe by Grepar
On the hearing of 21 June, the Administrative Council for Economic Defense (CADE) conditionally cleared the acquisition by Grepar of Lubnor, an oil refinery subsidiary of Petrobrás that operates in Ceará, Brazil. One of the activities of the refinery is turning petroleum into diesel, liquefied petroleum gas (LPG), aviation gasoline (Avgas), aviation kerosene (QAV), naphtha, and asphalt.
Grepar is a newly constituted company and a newcomer to the refining sector, owned by Grecor Investimentos, a group that invests in other companies, and Greca Distribuidora de Asfaltos, a company that operates in the distribution of asphalt products.
The analysis indicates that the transaction results in vertical integration between the production of asphalt by Lubnor and the distribution of the product by Greca Distribuidora. The assessed data showed that Lubnor holds a market share of about 10% of the asphalt production in Brazil. As for the regional market, specifically the northeast of Brazil, its influence increased by 60%, indicating the possibility of eliminating the competition in the market.
According to Commissioner Lenisa Prado, rapporteur of the case, the transaction can influence Grepar and Lubnor to adopt market policies that are more commercially and competitively advantageous for the companies, as opposed to their competitors. The Tribunal of CADE conditioned the transaction to the signature of a merger control agreement to solve the concerns and protect competition in the market. The remedies are under restricted access until the parties sign the document.
According to Mrs Prado, "Through this agreement, Grepar assumes behavioural commitments which I consider sufficient and necessary as well as proportional, timely, feasible, and verifiable to mitigate the concerns in this case, allowing for the clearance of the merger".
For the President of CADE, Alexandre Cordeiro, the agreement is appropriate to mitigate risks pointed out in the merger review. "The main aspect of this merger control agreement is the non-discrimination, considering the verticalisation in the transaction. That was the competitive problem that worried the authority; therefore, the agreement is well addressed."
Moreover, President Cordeiro offered a brief analysis of the antitrust remedies that CADE can impose unilaterally or negotiate through a merger control agreement. These remedies can be structural, with the sale of assets, or behavioural, related to internal activities, such as the imposition of obligations.
The president of the Tribunal added that the antitrust authority is to be careful to guarantee that the measures, especially behavioural ones, are related to the causal link of the transaction, resulting in an effective and objective agreement. He highlighted that "when the behavioural remedies move away from the causal link of the transaction, it is likely to cause problems for the authority in the future, such as an increase in reports of non-compliance with specific clauses that sometimes could be dismissed. It causes costs for the antitrust authority and unnecessary intervention in the private sector.”
The transaction involving Grepar meets the Cease and Desist Agreement signed between Petrobras and CADE in 2019, aimed at allowing the entry of new market players in the refinery sector, contributing decisively to increasing competition and competitiveness in the market.