General Superintendence issues opinion about Dabi Atlante and Gnatus merger on the sector of dental products

The General Superintendence of the Administrative Council for Economic Defense – CADE, in a decision published in the Official Gazette on 11 August 2015, submitted the merger case of Dabi Atlante S/A Indústrias Médico Odontológica and Gnatus Equipamentos Médicos-Odontológicos Ltda  to the analysis of the agency’s Tribunal (Merger File no. 08700.001437/2015-70).

After the analysis of information requested to the parties, competitors and clients, the General Superintendence concluded that Dabi Atlante and Gnatus are the main competitors in the sector of dental products. There is evidence that the companies have high market shares in the markets of vacuum pumps, intraoral X-rays, clinics, equipment for prophylaxis, and hand-pieces.

According to the opinion, there are several elements that place Dabi Atlante and Gnatus in a better position compared to other competitors, hindering rivalry and the entry of new agents in the analyzed markets. The existence of exclusivity agreements with wholesalers; the portfolio power stemming from the variety of products offered; the availability of specialized technical assistance; and the brands’ representation in the market are among the observed aspects.

Qualitative and quantitative analyses revealed that Dabi Atlante and Gnatus are similar and are considered the most relevant companies in several of the studied markets according to consumer perception, which reinforces the anticompetitive potential of the merger.

Considering the transaction’s anticompetitive potential, the General Superintendence understood that the approval of the transaction as presented by the parties would result in soaring prices and the elimination of competitors. Therefore, the Superintendence challenged the merger before CADE’s Tribunal, which will be responsible for the final decision either on the approval, blocking or the application of remedies for the identified problems. The determinations of the Tribunal can be applied unilaterally or by agreement with the parties.

The merger was notified in March 2015. The legal term for CADE’s final decision is of 240 days, extendable for more 90 days.