CADE signs agreement with Vancouros, Viposa, and Britali for gun jumping

On 19 June, the Administrative Council for Economic Defense (CADE) signed an agreement with the companies Vancouros, Viposa, and Britali for completing a transaction before clearance from the Brazilian antitrust authority, a practice known as gun jumping.  

An administrative procedure was launched in 2023, to check if the creation of the Bluminas joint venture among the defendants happened before CADE’s clearance. The new business is dedicated to the production of wet blue leather, which is used to manufacture clothing items. 

In December 2023, the parties submitted the transaction to CADE for review, and it was cleared in the same month. In the notification form, the parties admitted that they consummated the transaction in March 2021. Bluminas activities were expected to start in 2024, and its operations would start in 2025, with the opening of a new manufacturing plant. 

According to Law 12529/2011, the parties must submit mergers to CADE in cases in which one of the groups involved had a gross turnover equal to or over BRL 750 million in Brazil in the year previous to the transaction, and if the other group has also registered a gross turnover equal to or over BRL 75 million in Brazil in the same period. 

The agreement among the companies and CADE was submitted to the Tribunal to be reviewed by Commissioner Carlos Jacques Vieira Gomes, rapporteur of the case. He considered that they completed the transaction before clearance, defining it as a reported merger that was consummated before CADE’s approval.  

“There was no previous notification to CADE. When they decided to notify the antitrust authority, more than a thousand days had passed by”, he claimed.  

For the purpose of calculating the fines, the commissioner considered the declared value of the transaction from the companies, in addition to the revenue from previous years and additional documents that were requested during the investigation of the Administrative Procedure. 

“The agreement used the initial fees as a basis of calculation for the companies, but they added a clause to raise the fine in case the joint venture starts operating within two years”, he highlighted.  

Following the vote of the rapporteur of the case, the Tribunal unanimously agreed the firms committed a violation. The firms are to make a financial contribution of more than BRL 95 thousand to the Fund for De Facto Joint Rights (FDD) kept by the Brazilian Ministry of Justice and Public Security (MJSP).