The Bimbo group will appeal the rejection of the purchase of Pagnify

The Bimbo group will appeal the rejection of the purchase of Pagnify

For the group of Mexican origin, “the operation will not generate anticompetitive effects” and the definition of the relevant market was based on conceptual errors.

He Bimbo group will appeal the negative decision of the Commission for the Promotion and Defense of Competition (Coprodec) of the Ministry of Economy and Finance (MEF) regarding the purchase of the Uruguayan company Pagnitify; while they understand that the operation does not imply economic concentration nor reduce competition since it involves different areas.

The argument about “complementary” items had already been put on the table by Grupo Bimbo at the time of announcing the acquisition of the local company, as well as the fact that “both companies compete with several other bread brands and countless bakeries.” in all the country”. “The operation will not generate anti-competitive effects they said, at the time, foreseeing the repercussions that the news would have.

However, two of the three members of the Coprodec did not have the same opinion and, citing “possible anti-competitive effects” – the same ones denied by the purchasing party – in a market that is already “highly concentrated”, They rejected the purchase.

The company will present a resource against the ruling

Although it was to be expected due to the arguments presented from the first moment in the operation, the Bimbo group confirmed that it will present a appeal against the ruling of the Coprodec. This was confirmed by the general manager of the group, Alejandro Mirci, in an interview with El País.

Among the reasons for appealing, the company of Mexican origin maintains that it does not agree that the purchase operation implies a economic concentration that reduces competition because they are different areas.

The difference is at the conceptual level of what the traditional bakery and bakery sector is, as well as in the definition of the relevant market that, for Bimbo, Coprodec defines based on producers when it should do so based on consumers; a situation that gives a significant difference in the forecasts: for the official technical body, market concentration will rise to 72% if the acquisition is completed, while for the purchasing party it would be only 25%.

Likewise, Grupo Bimbo will seek to ensure that the fact that the decision was not unanimous—unlike what happened in the operation Minerva-Marfrig— and that the economist Daniel Ferres vote against the rejection plays in favor of a reconsideration by Coprodec.

Source: Ambito

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