CADE's Tribunal to review acquisition of Grupo Big Brasil by Carrefour

In an order signed on Monday, 24 January 2022, the Office of the Superintendent General of CADE referred the case involving the acquisition of the Grupo Big Brasil by Atacadão (a Brazilian subsidiary of Group Carrefour) to be reviewed by the Tribunal of the agency. The order comes with a recommendation the transaction be cleared subject to remedies to mitigate potential competition issues resulting from the transaction.

According to the Office of the Superintendent General, the firms compete in three markets: self-service retail (including supermarkets, hypermarkets, atacarejos and wholesale clubs); wholesale distribution of food products and other goods; and fuel retail.

The analysis carried out by the Office of the Superintendent General indicates that after its completion, the transaction is unlikely to cause any competition issues in the wholesale distribution and fuel retail markets.

As for the self-service retail sector, after observing the remaining level of rivalry and the entry of new competitors, the Office of the Superintendent General assessed there are no competition concerns in most relevant markets.

Nonetheless, for a few markets included in this sector, there are not enough elements to ensure the firms involved in the transaction will not exert market power, even after assessing possible efficiencies that could make up for the negative effects arising from the transaction.

Thus, to mitigate the potential competition issues identified during the analysis, the Office of the Superintendent General has negotiated with the parties a Merger Control Agreement (an ACC in its acronym in Portuguese) with structural and behavioural remedies.

The proposed agreement provides for the divestment of some self-service retail stores and behavioural remedies involving the firms committing to non-competition and the maintenance of the economic viability of the divested stores until the effective transfer of the businesses.

The Office of the Superintendent General understands the agreement negotiated is adequate to maintain the competition levels of the market. Now CADE's Tribunal is responsible for reviewing the case and issuing a final decision. The conclusions reached by the Office of the Superintendent General are in no way binding.

CADE has up to 240 days, extendable for 90 more days, to conclude its review of merger cases. The legal time limit for the review completion of the transaction involving Grupo Big started counting from 12 July 2021.

Access Case no. 08700.003654/2021-42.