Assisting JBJ in the acquisition of Mataboi

JBJ, a Brazilian livestock company, acquired Mataboi, a Brazilian meat packing company to creat PrimaFoods, a vertically integrated meat packing company. CADE blocked the transaction based on the likelihood of coordinated effects.

JBJ filed a lawsuit questioning CADE’s decision. Following a legal injunction, the merging parties proceeded with the transaction.

Marcio de Oliveira was approached by João Paulo Rodrigues (Sarubbi Cysneiros Advogados Associados) to provide empirical evidence about the absence of coordinated effects. Luiz Esteves and Rutelly Marques were also engaged in the case.

As the merging parties were able to conclude the transaction, it was possible to compare livestock prices before and after the transaction with the average market prices. The ratio between the prices paid by the merged company and the average price did not after the merger. Should there have been coordination, one should expect this ratio to fall following the merger. Therefore, there was no evidence of coordinated effects. This empirical evidence of the absence of coordinated effects was used by PrimaFoods to legally settle with CADE. As a result of such settlement, the transaction was cleared.

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