CADE clears joint venture between Viação Águia Branca and Grupo JCA

On 11 October, the Administrative Council for Economic Defense (CADE) cleared the BusCo joint venture —between Viação Águia Branca and JCA Holding Transportes, Logística e Mobilidade. The clearance was subject to the signing of a merger control agreement.

The companies operate in the transport and logistics sector, mainly in the Brazilian public transport. BusCo will operate in the Brazilian market of digital platforms for the operation of road transport.

In July, the Office of the Superintendent General challenged and forwarded the joint venture to the Tribunal of CADE for analysis, due to concerns about the transaction’s competitive impact on the market. The investigative arm of CADE analysed the horizontal overlap identified in the routes operated by the companies and the vertical integration with the joint venture activities in the national market of digital platforms for the operation of road transport.

Commissioner Luiz Hoffmann, the rapporteur of the case, reinforced that CADE could not unconditionally clear the transaction as previously intended due to competition concerns. He highlighted BusCo's privileged position, such as the control of competitive variables, like ticket prices and bus schedules.

"The joint venture can leverage its position as a service provider, as well as obtain information from other companies to coordinate prices, times, and routes between BusCo and other companies, which could lead to collusion”, he stated.

To mitigate the competition concerns, CADE conditioned the companies to the signature of a merger control agreement. BusCo committed to refrain from operating on the routes where horizontal overlaps with Viação Águia Branca and JCA persist, preserving competition in the market.

As for collusion risks, the agreement also foresees full autonomy between the companies and ensures BusCo will not disclose any sensitive information.

Access Case nº. 08700.002488/2022-48.