CADE challenges Oben Group’s acquisition of Terphane

The Office of the Superintendent General of the Administrative Council for Economic Defense (SG/CADE) remitted the case involving the acquisition of Terphane by Oben Group to the Tribunal of the agency.  

Terphane is part of the Tredegar group, with industrial facilities in the city of Cabo de Santo Agostinho, in the state of Pernambuco, and the city of Bloomfield, in the United States. Currently, the company manufactures and trades boPET (biaxially oriented polyethylene terephthalate), a polyester film made from stretched polyethylene terephthalate (PET). The Oben Group is a Peruvian company that runs the polyester film market in several countries, but there is no production chain in Brazil.  

The case reviewed a horizontal overlap in the market of boPET, which occured in international and Brazilian stages.  

BoPET films are flexible and have a high physical and heat resistance. They have different thicknesses and treatment options to modify both their surface (transparent, metallised, matt, etc.) and their properties (sealable, high or low coefficient of friction, UV barriers, etc.). The two companies' activities overlap only in the market of boPET films, which are products that are mainly used in the flexible packaging manufacturing, such as in the food and healthcare industries. BoPET films are used in the industry sector due to the properties of the type of polyester film, which offer excellent oxygen barrier, preservation of aroma, thermal resistance, chemical stability, tensile strength, and transparency. 

The transaction does not raise any competition concerns at the international level, since the merging companies have a low market share outside Brazil. On the other hand, the Brazilian market of boPET films showed extremely high market shares, once the transaction brought together the two main suppliers of boPET films in Brazil, mainly Terphane – as the only manufacturer of the product in the country. 

The investigation carried out by the SG/CADE found no evidence of entry of new manufacturers of thin boPET films in the Brazilian territory over the past five years. The market test suggested that the entry of new manufacturers in the Brazilian market of boPET films is untimely and unlikely. 

The SG/CADE also found no conditions of effective rivalry in the relevant market analysed, at least not significant enough to dismiss the likelihood of exercising market power by the merged company. Therefore, the SG/CADE directed the case to the Tribunal and recommended the blockage of the transaction. After the case submission for a final decision by the Tribunal, a commissioner will be assigned for a close analysis, followed by the adjudication of the collegial body. 

Access Case no. 08700.007543/2023-77.