The Secretariat of Economic Surveillance (SEAE), the Brazilian Antitrust Agency in charge of the economic analysis in merger reviews, concluded that the merger between Sadia and Perdigão, two major players in specially in the poultry worldwide market, was anticompetitive due to the high market shares to be held by the newly created Brasil Foods, even after a detailed analysis of the alleged efficiencies arising from the transaction.
SEAE’s economic opinion conclude that the resulting dominance in the markets of in natura turkey and industrialized products would hardly be challenged by entrants. Furthermore, the transaction will lead to substantial concentration in the poultry and turkey markets and may have an adverse impact for suppliers, most of which are small producers. SEAE recommended that the Administrative Council of Economic Defense (CADE) should impose one of the two measures which would be capable of bringing competition back to the affected markets. For the full content of the opinion in Portuguese, click here.
SEAE’s economic opinion is non binding and CADE will decide on the merger in the next months.