Cade approves merger between Sugar Loaf (Pão de Açúcar), Casas Bahia and Ponto Frio

BRASILIA and SÃO PAULO-unanimously, the Administrative Council for economic Defense (Cade) approved the Union of the Pão de Açúcar, Ponto Frio and Casas Bahia with the condition that companies selling stores in 54 cities.
The locations of the sale have been kept under wraps at the request of the companies. In these 54 municipalities, the concentration is greater than 60%. "The set of assets to be disposed represents to the company annual sales on the order of something close to $ 900 million a year," said the Rapporteur of the case, Marcos Paulo Veríssimo.
"I follow the rapporteur", stated the President of Cade, Vinicius Carvalho. He recalled that Cade entered into an agreement with the companies to keep the stores running while doing the analysis of the effects of the deal on the competition.
In all, there were overlapping stores, presence of more than one different flags store-in 177 cities. In 166 municipalities, the participation of networks in the retail market was greater than 20%. And, in 117 cities, surpassed 40% participation.
"We find competitive problems in 54 of 117 municipalities. Are cities where the concentrations are very high, generally above 60% or around this level, "said Verissimo.
In a statement, the Pão de Açúcar group said that the agreement provides for the sale of 74 stores, which represent about 3% of the consolidated gross sales of Viavarejo in 2012.
The Counselor Ricardo Ruiz said that the vow of Veríssimo was suitable. He recalled that, during the period under examination, the Brazilian economy has grown enough and, with this, three competitors of Pão de Açúcar have gained market share. They are: Walmart, Magazine Luiza and Ricardo electro.
These companies, he said, should also further expand its activities in the country. Counselor Eduardo Punctual and Alessandro Octaviani agreed with the way in which the analysis was made by the rapporteur. In a market where the concentration reaches 30%, does not mean that the other 70% are sprayed, or divided among other companies. So, there is a need for more detailed analysis, completed on time.
Fine
Cade fined companies for $ 1 million by providing misleading information to the Agency during the analysis process.
The Rapporteur of the case, Marcos Paulo Veríssimo, also said that companies "disagree with the penalty imposed, but will abide by it." And stated that Cade has to deal with clearly receiving information.