CADE orders mandatory notification for merger between cooperatives

On 21 February, the Administrative Council for Economic Defense (CADE) determined that Cocamar Cooperativa Agroindustrial must notify the acquisition, including active and passive assets of Cooperativa Agropecuária Norte Paranaense (COANORP) to the Brazilian antitrust authority, within 30 days. The Tribunal decided on the matter unanimously.

The order originated after a complaint made on the Clique-Denúncia platform, which was received by the Office of the Superintendent General of CADE. The complaint initiated the investigation of the alleged acquisition of COANORP by Cocamar on 1 November 2022.  According to the whistleblowers, the turnover of COANORP was above the criteria of mandatory notification to CADE. Thus, a lack of notification of the transaction to CADE could constitute gun jumping.

As stated by Commissioner Diogo Thomson, the rapporteur of the case, the cooperatives act commercially, so they could be considered part of the business transactions and as participating entities of legal transactions. “While the transaction cannot be classified as purchase and sale stricto sensu, the result of the transaction was simply the acquisition of all the corporate purpose of COANORP by Cocamar”, he summarised.

The Tribunal considered that, due to the lack of submission of the transaction, the firms have up to 30 days to notify the merger to CADE. In case of non-compliance, the notified parties must pay a daily fine of BRL 5,000.