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Since the 2011 Act, pre-notification of mergers is mandatory and has a suspensory effect (Article 88, paragraph 3). Mergers must not be implemented before a final decision is handed down by the CADE and the conditions of competition between the parties involved must be preserved until that decision. Such amendment to Brazilian merger control rules constitutes a significant step towards a higher le …

Merger notification

Since the 2011 Act, pre-notification of mergers is mandatory and has a suspensory effect (Article 88, paragraph 3). Mergers must not be implemented before a final decision is handed down by the CADE and the conditions of competition between the parties involved must be preserved until that decision. Such amendment to Brazilian merger control rules constitutes a significant step towards a higher level of legal certainty as under the 1994 system, concentrations could be subject to control a long time after their implementation. However, a certain amount of uncertainty remains as under Article 88, paragraph 7, of the Act, the CADE may require the parties to submit for control a transaction not covered by the pre-notification obligation up to one year after its implementation.

Resolution No 13 of 23 June 2015 establishes a special procedure (APAC) for the assessment of gun-jumping, i.e. implementing a notified or non-notified merger before CADE's clearance decision. The Resolution is supplemented by Guidelines on gun-jumping of 20 May 2015 designed to help merging parties assess what constitutes gun-jumping and how to avoid such practices. Under the Resolution, if gun-jumping is established, the undertakings concerned incur a fine of between R$ 60,000 (US$ 11,500) to R$60 million (US$ 11,500 million) and may be obliged to duly notify the transaction. Transactions undertaken may also be declared null and void. Resolution No 24 of 8 July 2019 purports to establish the criteria for the setting of the amount of fines for gun-jumping.

There is no legal deadline for notification but under Article 108, paragraph 1, of CADE's Resolution No 1, notification should occur after the signing of the agreement and before any act of implementation. Notification must be made using the forms annexed to CADE's Resolution No 2, which detail the information to be submitted. Since 1 January 2016, notification fees amount to R$85,000 (US$ 16,250).

Although associative agreements are not caught by merger rules where they are only entered into for the purposes of participating in public bids, Resolution No 17/2016 specifies which types of associative agreements are subject to notification. Such is the case of agreements concluded for two years or more for the establishment of a joint venture between competing undertakings which provide for a sharing of profits or losses between the parties. The CADE does not require that the agreement give rise to an horizontal or vertical overlap nor that it create a relationship of exclusivity between the parties. Such agreements must be notified to the CADE where they reach the thresholds laid down in Article 88 of Act No 12.529. The Resolution however indicates that agreements lasting less than two years may fall within the ambit of the notification obligation where the duration of two years is reached or exceeded upon renewal. 

Pursuant to Article 88, paragraph 2, the assessment of a merger must be conducted in a maximum of 240 days after the transaction is duly notified. An extension of up to 60 days is possible if the parties so require. The Tribunal may also request an extension of up to 90 days upon substantiated request (Article 88, paragraph 9). Those are short deadlines compared to those applicable under the 1994 Act. Such shortening has been made possible by having only one authority dealing with the case instead of three, with a serious risk of conflicting opinions. Compliance with the above-mentioned deadlines is important since Section 133 of CADE's Resolution No 1 specifies that should they be not respected, the concentration would be deemed to be tacitly approved.

  Once it is notified, the merger operation is first examined by the Superintendent-General, who will first check whether the parties have provided the required data and then if the operation presents risks for competition. If it deems that such risks are only minor, it will issue a clearance decision (Article 54). However where there are serious risks, the Superintendent-General will undertake an additional instruction. If after such instruction it is satisfied that the transaction passes the substantive test, it will issue a clearance decision, without remedies (Section 57-I). This decision may be challenged before the Tribunal by any interested party (Section 65).

  By contrast, where the Superintendent-General deems the transaction should be prohibited or only cleared with conditions and obligations, it must submit the case to the Tribunal for a second phase examination (Article 57-II). The parties to the concentration have 30 days to submit their written comments and any useful evidence or economic study. The file is then assigned to one of the Tribunal members who will instruct the case. The Tribunal then may approve the operation with or without restrictions or reject it.

Pursuant to CADE's Resolution No 2, some categories of mergers do not raise significant competition concerns (Article 6). For that reason, they are subject to simpler notification obligations (summary notification form in annex II of the Resolution) and eligible for fast-track analysis procedures before the Superintendent-General, under the terms of Section 54-I of the Competition Act. Pursuant to Resolution No 16 of 1 September 2016 amending Resolution No 2, the Superintendent-General must issue a decision in simple cases within a maximum of thirty days and provide serious grounds should it fail to do so.

Article 8 of Resolution No 2 gives a list of transactions eligible for the simplified procedure:

- concentrative or cooperative joint-ventures;

- replacement of an economic agent when the acquiring company does not operate in the market of the acquired company;

- small market shares held by the undertakings involved.

Other cases may also benefit from simplified treatment at the discretion of the Superintendent-General.

Global Competition Law

845. Merger notification

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au contenu exclusif Livv – juristes d’entreprise

Les notions juridiques connexes

845. Merger notification

Demandez un accès gratuit au contenu exclusif Livv – juristes d’entreprise

Les notions juridiques connexes

Demandez un accès gratuit
au contenu exclusif Livv – juristes d’entreprise