Cade approves sale of the BIG group to Carrefour with restrictions
- May 26, 2022
- No Comment
The Administrative Council for Economic Defense (Cade) approved this Wednesday the sale of the BIG group to Carrefour after reaching an agreement with the company for the sale of some units to avoid harm to competition in some regions. The approval of the R$ 7.5 billion operation was unanimous.
With that, the directors followed the understanding of the General Superintendence (SG) of the body, which had already finalized an agreement with the companies for the sale of some of the 386 acquired stores and future approval of the operation.
With the approval, the Carrefour group, which owns Atacadão, would have control of the Sam’s Club shopping club, in addition to the BIG hypermarkets and the Bompreço and Mercadorama supermarkets.
Even following the SG’s understanding, the rapporteur of the case, counselor Luiz Augusto Hoffmann, sent letters to dozens of other stores, possible competitors, to expand the investigation into the possible damage to competition in the retail trade, which includes supermarkets, cash and carry stores and clubs. shopping; wholesale distribution of food products; and fuel sales.
After this process, Hoffmann decided to follow the SG’s understanding and was accompanied by the rest of the directors. The rapporteur decided to increase the number of units that should be sold compared to the SG deal as he saw possible problems in more regions, such as Carrefour and BIG units very close to each other.
The number of units to be sold was considered confidential, as were the locations. However, in the opinion of the General Superintendence there are some examples of regions that could be affected by the operation.
One of the regions where Cade identified possible problems was Gravataí, in Rio Grande do Sul, where BIG and Carrefour have “considerable participation” in the market. Other cities analyzed were Juazeiro do Norte, in Ceará, and Recife, in Pernambuco. The details of the agreement are confidential.
According to Hoffmann, the company has reduced possibility of exercising purchasing power in relation to suppliers and there is competitiveness in the self-service retail by several other players in the sector.
During the vote, the rapporteur also said that some units that should be sold have already received purchase proposals and, therefore, there are conditions for this process to be carried out “without delay”.
– The sale of the aforementioned establishments to third parties makes it possible to increase the competitive pressure faced by the applicants in the post-operation scenario, mitigating the reduction of competition caused by the departure of the BIG group and reducing the probability of exercising market power – he said.
Source: The Globe