Purchase of Ale by Ipiranga may raise prices, says Cade

São Paulo – the General Oversight of the Administrative Council for economic Defense (Cade) concluded in an opinion issued Wednesday that the acquisition of fuel distributor Ipiranga, by Ultrapar''s Ale, can result in elevation of prices in distribution and resale.
This rise in fuel prices, added the organ, would take place in "increasing the market power of the Ipiranga and the elevation of the possibility of coordinated activities of the companies in the sector", dominated by four companies (BR Distribuidora, Petrobras; Raízen, Shell and Cosan; Ipiranga and Ale).
In the opinion of the supervision, the markets most affected by the operation are those of gasoline, diesel and ethanol.
"For this reason, the operation was the Court''s analysis of the contested Cade, organ responsible for the final decision on the approval, rejection or adoption of any remedies that keep the problems identified," said the Agency in a statement.
The arrangement of purchase of Ale by the Ipiranga, by 2.17 billion reais, was announced in the middle of last year.
Sought, Ipiranga not manifested itself immediately on the subject.
The determinations of the Court can be applied unilaterally or by agreement with the parties, added the statement.
The Act of concentration has been notified on 19 September 2016, and the deadline for the final decision of the Cade is 240 days, extendable for another 90.