CADE clears greenfield joint venture between Ultragaz and Supergasbras

On 20 August, the Administrative Council for Economic Defense (CADE) cleared without restrictions, the formation of the greenfield joint venture between Ultragaz and Supergasbras, for the construction, development, and operation of an LPG (Liquefied Petroleum Gas) port terminal at the Pecém Industrial and Port Complex, in the Brazilian state of Ceará.

Initially, the Office of the Superintendent General at CADE (SG) unconditionally cleared the transaction. However, the third interested party, Queiroz Participações S.A., filed an appeal questioning the exclusivity clause, the risk of market foreclosure, the lack of guarantees for cabotage, and the inadequacy of governance mechanisms.

After review, President Gustavo Augusto, rapporteur of the case, denied the appeal and upheld the unconditional clearance of the transaction, subject to compliance with the following conditions, aimed at mitigating the competition concerns:

Opening to third parties for the use of port terminal facilities, with any access denial to be justified; adoption of equal and non-discriminatory treatment for competitors wishing to transport LPG through said terminal; implementation of a governance structure to separate the terminal’s management from the applicants’ management; guarantee that the terminal will have the logistical conditions to receive and store both cool and pressurised LPG; permission for a possible interconnection of the structures necessary for the transport of LPG from the terminal, with costs borne by the interested party.

According to President Gustavo Augusto, any extension of the exclusivity agreement must be notified in advance to CADE, and if these conditions are not met, the clearance may be reviewed.

The Tribunal of CADE unanimously cleared the decision.

Access Case no. 08700.009854/2024-5.