After the rejection by the Defense of Competition, the Brazilian company seeks to obtain “a single conduit” with the government to acquire at least two plants.
Minerva seeks to negotiate with the government the purchase of two Marfrig refrigerators after the failed operation rejected by the Defense of Competition.
Capture: Underlined
The Brazilian company Minerva Foods sent a proposal to try to revive the purchase of refrigerators Marfrig, which was rejected by the Commission for the Promotion and Defense of Competition (Coprodec) considering that the operation would lead to a “dominant position” in the midst of “a highly concentrated market.”
The firm had anticipated that it was not resigned to completing the acquisition, which was part of a global operation and exceeds Uruguay. However, the failure of the organism dependent on the Ministry of Economy and Finance (MEF) ruined the advance in the market of task local, amid criticism from the livestock sector and even objections from the ruling party.
With the idea of reviving the purchase, Minerva proposed to the government to create “a single conduit” to look for alternatives and acquire at least 1 or 2 of the plants, according to El Observador, within the framework of a communication between the president of the Council of Firm address, Norberto Giangrande, and the Uruguayan ambassador to Brazil, Guillermo Valles.
According to what was reported, the representative of the Brazilian company ratified the interest and was in favor of providing “any other instrument and commitment that Minerva could adopt” so that they do not occur “anti-competitive effects of a subsequent acquisition”, such as those postulated by the Coprodec.
It is worth remembering that, as appears from the Defense of Competition ruling, the firm considered that the resolution had “hypothetical effects and mere assumptions”, considering that “there is no evidence that competitive impacts occur.”
The arguments of Defense of Competition
The organism that depends on MEF issued a 36-page ruling against the acquisition and considered that it “would lead to the creation of a dominant position already a highly concentrated market”, since Minerva would reach 43% of the task
For Coprodec, the request had to do with “a sector that has experienced a growing and recent concentration and that would take place between two groups that own multiple slaughter plants. cattle in Uruguay”, while he warned that “companies could have the ability to transfer the impact of greater sales capacity to the negotiations that develop in the livestock market.”
The ruling even mentioned the Herfindahl-Hirschman index (HHI), which qualifies a market as “highly concentrated” exceeding the threshold of 1,800 points, and then points out that in this case it would reach 2,660 points, well above the limit.
Source: Ambito
