Govesa and Kuruma are to pay BRL 2.4 million for gun jumping

On 8 May, the Administrative Council for Economic Defense (CADE) ratified two agreements with the companies Govesa Motors Veículos (GOVESA) and Kuruma Veículos (KURUMÁ) for completing the  acquisition of tangible and intangible assets of GOVESA by KURUMÁ without CADE’s clearance — a practice known as gun jumping. The parties are to pay BRL 2,441,448.00 in financial contributions.

CADE had previously heard the case on 27 September 2023. During the hearing session, the Tribunal reviewed an administrative procedure, launched by the Office of the Superintendent General of CADE in 2019, to examine the transactions of purchase and sale of assets of the companies involved, in the last decade. These transactions include the transfer of various assets such as brands, stores, business premises, machinery, vehicles, stock, client lists, among others.

The Tribunal has unanimously recognised that the transaction between Govesa Motors Veículos, Peças e Serviços Ltda (which was acquired by Govesa Goiânia Veículos in 2019) and Kurumá Veículos S/A is considered an acquisition that requires mandatory notification within 30 days. Following CADE’s decision, the companies notified the case and the transaction was cleared unconditionally.

On 17 April 2024, Commissioner Gustavo Augusto, the rapporteur of the case, undertook a new probe for the calculation of the fine, as the gun jumping had already been acknowledged.  At the time of the hearing, Commissioner José Levi requested the examination of the records.

On 8 May 2024, Commissioners José Levi and Diogo Thomson reported that the parties submitted an agreement for approval to close the case.

The tribunal of CADE unanimously cleared the agreement. The financial contribution amounts to BRL 2,441,448.00, equally divided between the parties. If the companies fail to comply with the obligations agreed, they are to pay the fine appointed.

Administrative procedure to investigate mergers and acquisitions no. 08700.005463/2019-09