CADE’s General Superintendence suggests blocking of the acquisition of Uruguayan American Chemical by Oxiteno

The General Superintendence of the Administrative Council for Economic Defense – Cade recommended, on April 19th, the blocking of the deal through which the Brazilian company Oxiteno S.A. Indústria e Comércio purchased the Uruguayan company American Chemical I. C.S.A. The case will now be reviewed by Cade’s Tribunal, which is responsible for the final decision.

The General Superintendence’s opinion stated that the acquisition would harm competition in the sodium laureth sulfate market, a chemical substance applied in cleaning and personal care products, such as detergents, shampoos and liquid soap. Both companies produce and sell the product in the countries that are part of Mercosul, the Southern Common Market. After the merger, the firms would hold a market share of over 60%.

The General Superintendence also expressed concerns regarding the alcohol ethoxylate market, the main input for the production of sodium laureth sulfate, given that Oxiteno is the only producer of this input in Brazil.

The merger was notified in June 2012 and is being analyzed under the former antitrust law, Law no. 8.884/94.