CADE to review joint venture for corn ethanol production

The Administrative Council for Economic Defense (CADE) is to review the joint venture between Aquila Ferrum Participação and Agropecuária Jem for the implementation, development, and standardisation of a production unit of corn ethanol and its by-products. The transaction establishes that Czarnikow Brasil is to have a market share of up to 24.5%.

Aquila is a holding that supplies sugar cane to companies that manufacture sugar and ethanol. Furthermore, it operates in the grain production of soy and corn by planting, handling, and harvesting the crops. Agrojem operates in the agriculture, livestock, and storage service markets for either captive use or third parties. Czarnikow Brasil is a company that belongs to the Czarnikow Group Limited (CZ), operating globally in the sugar and ethanol trading. CZ also provides advisory services, agriproducts, energy and food ingredients & packaging.

The companies informed CADE that they aim to form a joint venture in the sector of electricity production and trade, by burning eucalyptus biomass in thermal power stations. They also reinforced that the business is a good opportunity to expand their portfolio of goods and services.

Time limit for merger review

According to the legislation, the merger review must take no longer than 240 days. The legal time limit is extendable for up to 90 days upon a reasoned decision by the Tribunal or up to 60 days upon request by the parties.

Mergers can be reviewed as summary cases–when regarded as less complex from a competition point of view–or ordinary–when requiring more in-depth analysis. The assessment of the transactions subject to a summary proceeding must be concluded in 30 days as per Resolution 33/2022.