CADE signs agreement with Vanz, SZ, and Britali for gun jumping

 On 05 June, the Administrative Council for Economic Defense (CADE) signed an agreement with the companies Vanz Holding, SZ Participações Societárias, and Indústria e Comércio de Couros Britali for completing a transaction before the clearance from the Brazilian antitrust authority, a practice known as gun jumping. 

In December 2023, an administrative proceeding was launched to ascertain whether the creation of a joint venture (Gelprime) among Grupo Vancouros, Grupo Viposa, and Britali was completed before CADE’s clearance. The new business is dedicated to the production, trade, and distribution of bovine gelatine whose main inputs are by-products of the leather production process, provided in full by the defendants. 

In December 2023, the parties submitted the transaction to CADE for review. In the notification, the companies informed that the business was formally established in July 2019 and Gelprime started the activities by the end of 2022. In the same document, they recognised that the non-submission of the pre-merger notification could implicate the launch of a proceeding. 

According to Law 12529/2011, the parties must submit mergers and acquisitions to CADE in cases which one of the groups involved had a gross turnover equal to or over BRL 750 million in Brazil in the year previous to the transaction, and if the other group has also registered a gross turnover equal to or over BRL 75 million in Brazil in the same period. Transactions to fit this income criterion must not be completed until the Tribunal renders its final decision. 

The agreement among the companies and CADE was taken to the Tribunal to be reviewed by Commissioner Diogo Thomson de Andrade, rapporteur of the case. For calculating the gun jumping fine, the commissioner considered that to establish the value of the transaction, in case of a joint venture, there must be an analysis of the tangible and intangible assets necessary to operate the business, taking into consideration the specificities of the case. According to this analysis based on CADE’s Resolution no. 24, the commissioner evaluated the progress of the negotiation by the documents presented. In this case, he understood the changes in the share capital of the joint venture after the completion of the transaction as indications of the amount transacted. 

The companies committed to pay more than BRL 700,000 to the Brazilian Fund for De Facto Joint Rights.