CADE to review 123milhas' acquisition of Maxmilhas

On 25 October 2023, the Administrative Council for Economic Defense (CADE) determined that both companies involved in the acquisition of MM Turismo & Viagens, known as Maxmilhas, by 123milhas are to submit the transaction for review. The decision followed the appealed rulings of the Office of the Superintendent General, which had already requested the transaction to be submitted.

According to the rapporteur of the case, Commissioner Gustavo Augusto, the transaction does not fit the income criteria for mandatory notification as per the terms of Law 12529/2011. However, the Tribunal of CADE observed that the transaction raises competition concerns. Thus, the antitrust authority is entitled to analyse the impacts of the transaction on the market of airline tickets booked with airline miles via OTAs (Online Travel Agencies) or the market related to the purchasing of air miles via OTAs.

"In both cases, the transaction seems to result in a considerable horizontal overlap. For this reason, CADE prompts an in-depth analysis, along with the macroeconomics of the transaction", said Mr. Augusto.

The Tribunal decided that both companies are to submit the transaction for review within 30 days from the publication of the decision in the Official Gazette of Brazil. The Tribunal imposed a daily fine of BRL 50 thousand.

Notification

As provided in Article 88, Items 1 and 2, of Law 12529/2011, mergers and acquisitions must be notified to CADE if at least one of the firms involved in the transaction has a gross turnover equal or superior to BRL 750 million in the year preceding the transaction, and the other firm, a total sales of BRL 75 million.  In both cases, the amount to be paid must be related to the year prior to the transaction, acquired in Brazil.

However, the legislation also allows CADE to require the transactions that do not fall within the criteria provided in the summons to be reported within one year from the respective date of consummation, to cross-check the impact of the business on the markets affected by the transactions.

Access Case no. 08700.004240/2023-01.