CADE clears with restrictions Minerva’s acquisition of Marfrig’s assets

On 25 September, the Administrative Council for Economic Defense (CADE) cleared with restrictions Minerva’s acquisition of part of Marfrig, a cattle and sheep meat business. The transaction involving production plants for slaughter and deboning, and distribution centres in Brazil, Argentina, and Chile was cleared subject to remedies. The Tribunal of CADE imposed unilateral remedies, since there was no merger control agreement. 

The transaction consists of the signature of the purchase and sale of 11 units for slaughter and deboning in the Brazilian states of Rio Grande do Sul, Mato Grosso, Mato Grosso do Sul, Pará, Goiás, Rondônia, and São Paulo, in addition to a unit in Argentina and another one in Chile. 

The rapporteur of the case, Commissioner Carlos Jacques, highlighted two competition concerns: the suppression of the expansion limit of the industrial plant in Várzea Grande, in the State of Mato Grosso, and the disposal of the plant in Pirenópolis, in the State of Goiás.

According to Mr Jacques, in this case, the imposition of unilateral remedies is the best and most proportional alternative to ensure the preservation of a balanced competitive environment. The measure is enough to mitigate risks associated with market concentration and prevent dominant position, since the slaughter and deboning market was one of the rapporteur’s concerns.

Remedies 

CADE imposed the obligations to mitigate the competition concerns identified, suggesting the clearance of the transaction subject to remedies. 

Thus, the rapporteur adopted the SG/CADE’s suggestions on the amendment of the non-competition clause, proposing unilateral additional conditions, since there was no merger control agreement signed with CADE.

The Tribunal’s final decision defined that Marfrig can increase its slaughter and deboning capacity in the industrial plant in Várzea Grande, in the State of Mato Grosso. Minerva should also dispose of the plant in Pirenópolis, in the State of Goiás, which used to be owned by Marfrig and is object of the purchase and sale contract. These measures will be monitored according to the compliance monitoring procedures stated in CADE’s resolution. 

The restrictions to the contract’s expansion are applied to the states of Pará, Rio Grande do Sul, Rondônia, Mato Grosso do Sul, and Goiás. However, the restriction to the industrial plant in Várzea Grande, in the State of Mato Grosso, is not valid, but other rules of compliance in the state still are. 

Access Case no. 08700.006814/2023-77.