CADE’s Superintendence renders opinion about JBS and Rodopa merger

The General Superintendence of the Administrative Council for Economic Defense (CADE) referred to the Tribunal’s analysis the leasing transaction of three cattle slaughtering units of Grupo Proteínas by JBS S/A. Grupo Proteínas’ facilities are part of Rodopa Indústria e Comércio de Alimentos Ltda. and Forte Empreendimentos e Participações Ltda. (Merger file no. 08700.010688/2013-83). The facilities subjected to the merger are located in the cities of Santa Fé do Sul (SP), Cassilândia (MS), and Cachoeira Alta (GO).

For the General Superintendence, Rodopa is one of the main competitors in the market of cattle slaughtering and trade of raw meet in Brazil, and it presented higher market share growth and competitive differentials than the other rivals in the last years in the market. Hence, the opinion highlights the possibility of absorption of a relevant competitor in a market already ruled by small companies, and considering that few of them are capable of competing effectively.

JBS is an absolute leader in the market and, according to the Superintendence, detains relevant competition advantages over rivals regarding buying power, size, number, and dispersion of plants, activity integration, exporting, access to credit, investments in marketing and others.

To the Superintendence, the aforementioned aspects along with a large number of mergers performed by JBS in recent years motivated the recommendation to CADE’s Tribunal, which is responsible for the final decision. 

The merger was distributed to Reporting Commissioner Márcio de Oliveira Júnior, which will present his analysis to the Tribunal thereafter. The Administrative Tribunal can approve, block or impose remedies unilaterally or by signing an agreement with the parties.

The merger was filed in 6 December 2013 and CADE has 240 days, extendable for 90 more, to render a final decision.