New antitrust law causes a "rain" of mergers at CADE (Brazil's antitrust agency).
In just 20 days, the agency received 141 business proposals. Companies took advantage of the deadline to submit them in order to benefit from outdated legislation.
247 - In just 20 days, between May 29 and June 19, the Administrative Council for Economic Defense (Cade), a federal agency linked to the Ministry of Justice, received 141 mergers and acquisitions for judgment. The "rush" of companies to submit deals to the agency was due to the entry into force of the new antitrust law on May 29. But Cade extended the deadline to June 19 so that mergers and acquisitions could still be assessed under the old legislation. In the last two days of the deadline alone, Cade received 54 cases.
According to the new law (No. 12.529 of 2011), mergers and acquisitions can only be carried out with prior authorization from CADE (Administrative Council for Economic Defense). The previous legislation (No. 8.884 of 1994) allowed companies to carry out mergers first, and only then notify CADE for review by the agency.
Another change, according to Agência Estado, is that, "under the new rules, only mergers and acquisitions will be analyzed in which the acquiring group had a revenue of R$ 750 million in the previous year and the selling group, a revenue of R$ 75 million." Under the previous legislation, "it was sufficient for one arm of the business to have registered a revenue of R$ 400 million."
Cade told the newspaper Valor that it will not release the list of 141 cases due to confidentiality requests from the companies, and that all cases will first be analyzed by the agency before being made public.
According to the newspaper, the numbers from the "race to CADE" are significant, as the agency reviewed 800 mergers throughout 2011.