CADE conditionally clears SM Empreendimentos’ acquisition of Gemini

On 30 September, the Administrative Council for Economic Defense (CADE) cleared SM Empreendimentos’ acquisition of Gemini Indústria de Insumos Farmacêuticos, part of the Fagron Group.

The transaction also involved the subsidiary Lepuge and was classified as complex due to the high market concentration in the pharmaceutical distribution sector for compounding pharmacies.

The Office of the Superintendent General at CADE (SG) recommended the transaction to be rejected, mentioning the risks of significant increase in market concentration and reduction of rivalry.

Commissioner Carlos Jaques, rapporteur of the case, stated that the acquisition could only be cleared after the signature of a Merger Control Agreement.

The agreement establishes the divestiture of logistics assets and behavioural commitments.

According to the rapporteur, the commitments are proportional to the identified risks and sufficient to mitigate competition concerns, allowing for the consummation of the transaction without prejudice to competition.

“The agreement imposes essential safeguards to preserve rivalry conditions and mitigate potential anticompetitive effects, keeping suitable conditions for competition”, he claimed.

The Tribunal agreed with the statement of the rapporteur and unanimously decided for the signature of the Merger Control Agreement.

Access Case no. 08700.010436/2024-15.