Nestle must sell brands to smaller rival

BRASILIA-Nestlé cannot sell to large competitor a bag of brands and assets which will have to undo to get, 15 years later, that the Administrative Council for economic Defense (Cade) to approve the purchase of the Boy. Second it was the associated press/Broadcast, the prohibition contained in the agreement signed between the company and the Council last year.
The deadline for the sale of assets will until October. According to sources who have followed the negotiations, the package includes the chocolate Love Serenade, Chokito, Lollo and sensation-the detailing of the assets that the company has to sell is kept under wraps.
The ban that the marks are passed on to a large competitor, left out of the negotiations the Lacta (Mondelez group), today deputy leader of market, behind Nestle. The trend is that the assets are bought by smaller competitors such as Arcor and Hershey's. The buyer will have to be submitted to Cade and approved by the Council before the operation.
Impasse. The merger of Nestle and Boy was signed in 2002. Two years later, was vetoed by the Council, having been suspended for Justice in 2005. With that Nestlé had to keep separate the assets of Boy and was unable to incorporate fully the brand.
Last year, Nestle sought Cade to present a proposal for a deal to allow to end the process and the long legal dispute.
The Council considered that the solutions presented by Nestlé addresses all the issues arising from the merger, competitive with the sale of assets, plants and brands and it has approved the deal in October last year, giving one-year deadline for the sale.
At the time of the merger, Nestle had 34% market share in the country – when buying your Kid would slice 58%, against 33 percent of Lacta. Even with the entry of competitors, the market continued to be dominated by three companies 15 years later.
The Nestle case/Boy is one of the most emblematic of the history of Cade and influenced later legislation work. In 2002, mergers and acquisitions were analyzed after the deal has been closed. This often happens years after the operation, when the two companies were already working together.
In 2012, the new law of competition, businesses have been analyzed previously. Companies can only merge production plants and administrations after the definitive approval.
Sought, Nestle said the process is still in progress in the Cade and runs under wraps and therefore could not comment.