CADE signs agreement with firms for completing transactions before its clearance

On 16 August, the Tribunal of the Administrative Council for Economic Defense (CADE) fined companies BRL 932,000 for completing mergers before receiving clearance from the authority.The practice is known as gun jumping.

The first transaction is related to the acquisition of the firm J3 Operadora by Bus Serviços de Agendamento subject to the execution of a merger control agreement. In the hearing of January 2022, CADE conditionally cleared the merger.

The Office of the Superintendent General identified the transaction within an administrative enquiry investigating anticompetitive conducts in the market of bus ticket online sales. The transaction was carried out in 2015 and completed the following year. However, the merging companies only notified CADE in September 2020, after the authority initiated a procedure to investigate them for gun jumping.

The firms are to pay BRL 383,176.27 as a financial contribution as established in the signed agreement

The second merger relates to  Guanabara’s  acquisition of a 16.67% stake in J3 Participações  owned by the firm 2A Investimentos, through Wipsoft Soluções em Tecnologia. The transaction was conducted through the company União Transporte Interestadual de Luxo, part of the Guanabara Group. The Tribunal of CADE unconditionally cleared the acquisition in January 2022.

This transaction involving the firms J3 Participações and Guanabara occurred in November 2019, but was only reported to CADE in August 2020.  In 2021, the Office of the Superintendent General identified the possible antitrust violation and launched an administrative proceeding for merger review.

The Tribunal of CADE considered that the transaction was completed through the transfer of assets between firms from different business groups. The firms applied for an agreement committing to pay a financial contribution of BRL 548,826.49.

Mandatory reporting

Under the provisions of Law 12529/2011 mergers and acquisitions must be notified to CADE if at least one of the parties involved in the transaction had, in the year preceding the transaction, a gross turnover or a total volume of business in Brazil of equal to or over BRL 750 million and of equal to or over BRL 75 million for at least one more party involved.

Transactions to fit this income criterion must not be completed until the Tribunal renders its final decision.

Access the cases:

Administrative procedure to investigate mergers and acquisitions no. 08700.002598/2020-48

Administrative procedure to investigate mergers and acquisitions no. 08700.005795/2021-08