After 14 years, merger of Nestle and Kid might happen

Sao Paulo-the chocolates market in Brazil has become a lot in the last decade. With the entry of new competitors and market growth premium, the two leading companies, Boy and Nestle lost space. But the loss of space can be good for them.
That''s because they are for 12 years in a legal dispute to come together. In 2002, the multinational Nestlé bought the brazilian Boy. Together, they would have more than 58% of the market.
However, because of the concentration of the sector, the merger of the housewives of the Brazilians '' favorite candy boxes was barred by the Administrative Council for economic Defense (Cade) two years later.
The companies then objected to the decision by the Judiciary, in a process that is still running.
Nestlé remained the owner of the Kid, but with operations, manufacturing and separate administrations. To this day, are two different companies.
Dilution of the chocolate market
Today, more than 12 years after having rejected the merger proposal, Cade released a study on the market of chocolates, stating that the sector became very in the period.
In the segment of candy as a whole, which also includes bullets and toppings, Nestlé and Boy would total 58 percent of the market. The runner-up would be the Lacta, with 33.15%. Arcor and Smith had, in 2001, participation at around 3%.
At the time, the boy was responsible for 66.4% of the chocolate market in billing, and Nestlé 22.1%. The merger should consist of 88.5% of the market, which was considered against the competition, according to Cade.
They were also strong in the chocolate market. In 2001, Nestlé had 58.1% of participation in the sector and the Kid would add more 3.1 percent of the market.
Over time, new competitors have arrived and, although the two companies continue to be the market leaders, the concentration is not the same as the time of the merger.
"New companies entered in some market segments, new distribution channels have developed, consumer preferences have also changed, all this within a broader environment of economic and social changes experienced by Brazil in the last decade," says the technical opinion of the Cade released on 1.
Chocolate consumption more than doubled from 2005 to 2014, rising to 775 1000 tons per year. The Brazil went from fifth largest consumer for third largest consumer market of chocolates in the world, with increased consumption and the rise of class C.
The Mondelez, owner of Lacta, Milka and Toblerone, holds 31% of the sector. Also reached around Hershey''s and Mars, Twix, M&M owner''s and Snickers.
The premium chocolate market also became and today corresponds to 7% of the market, according to Cade. The leaders of this segment are Cocoa, Cocoa controller Pair Show and CRM, owner of the brands Copenhagen and Chocolates Cocoa Brazil, besides having a partnership with Lindt.
Because of this, Nestlé is now only 43% participation in sector-23% are of the Kid, according to the economic value. Now, Cade has reopened discussion of the process of the merger.
The Exame.com, Nestlé said that it "is currently unable to manifest itself on the proposal for a solution to be analyzed in the context of the Administrative Council for economic Defense (CADE) in case of purchase of Chocolates Garoto depending on the confidentiality of the documents and in case of own rites of CADE".