Reuters: Regulatory News: New rules limit Brazil M&A scrutiny -Cade

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New rules limit Brazil M&A scrutiny -Cade May 29th 2012, 19:29 Tue May 29, 2012 3:29pm EDT * Firms to notify fewer deals on softer rules, Cade says * New framework to accelerate scrutiny, Chinaglia says * More than 200 cases to be ruled under previous rules BRASILIA, May 29 (Reuters) - Brazil's antitrust regulator Cade expects the number of mergers and acquisitions cases under its scrutiny to fall by 40 percent once new rules on corporate combinations take effect, the agency's president said on Tuesday. Brazil's new Antitrust Act, starting on Tuesday, will limit oversight by the agency, known as Cade, to deals in which acquirers earn at least 750 million reais ($377 million) in annual revenue. The prior framework set no minimum threshold, leaving Cade with piles of petty cases to rule on. The Brasilia-based agency will give oversight priority to "transactions which, in general, highlight excessive market power from an economic agent," Olavo Chinaglia, president of Cade, told reporters. While investors say that corporate takeovers face weak regulatory scrutiny in Brazil, consumer groups and companies say Cade takes too long to act in cases where free competition is infringed. The agency seeks to correct through with a plan to issue partial approval of M&A deals with the condition that a combination only proceeds after a thorough process. Cases such as Nestle's failed purchase of Brazilian chocolate maker Chocolates Garoto have been cited by Cade critics as evidence that the antitrust body is too slow to rule on M&A cases. Cade vetoed the purchase in February 2004 in a five-to-one ruling, and ordered Nestle to sell Garoto to a smaller rival, but the Swiss foodmaker has for years challenged that decision in courts. Link this Share this Digg this Email Reprints

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