CADE clears the acquisition of Innova by Videolar

On 6 October 2021, The Administrative Council for Economic Defense (CADE) cleared the acquisition of Innova by Videolar. The clearance of the transactions was subject to the fulfilment of measures agreed to in a Merger Control Agreement (ACC) after the Tribunal assessed requests for clarification presented by the parties involved in the deal.

In April 2021, CADE blocked the transaction. At the time, the Tribunal observed the petrochemical companies did not fully comply with the commitment to maintain the polystyrene production volumes at certain levels established in a previous ACC. Additionally, the companies failed to evidence to CADE the transaction benefits to consumers.

However, after analysing requests for clarification presented by the companies, the Tribunal of CADE clarified matters on which its April decision was silent and decided to clear the transaction, by the majority of votes, based on the signing of a new merger control agreement.

Commitments of the new agreement comprise that Innova and Videolar will not acquire and/or lease production plants that have registered polystyrene in Brazil in a period of five years prior to the acquisition and/or lease of the unit.

Moreover, the parties are to submit their work plan (which must be approved by the authority) to the monitoring trustee, including the projects to be developed throughout the year. The monitoring trustee will analyse the investment and the progress of the projects quarterly, reporting its findings in a similar timing to the Tribunal of CADE.

Access Case no. 08700.009924/2013-19.