Brazil's antitrust body CADE approved on Monday, without restrictions, the merger of pet product retailers Cobasi and Petz, a decision on Cade's website showed.
The approval could mark Cade's final green light for the merger, unless an appeal is filed within 15 days. If this happens, the case could be decided by an internal Cade panel.
The cash and share swap deal, which is set to join together Brazil's two largest pet product retailers, was first announced in April last year.
Earlier, CADE's Department of Economic Studies (DEE) outlined the potential for market concentration in the pet products retail market, with a particular focus on physical store locations. It concluded the transaction would lead to horizontal overlaps for the retail trade of pet products, both online and in physical stores.
Still, the technical body concluded that there are mitigating factors that reduce the likelihood of market power being exercised and discourage any attempts by the companies to close off market access after the merger.
“The analysis showed indications from market testing that entry barriers in physical retail are low, and these markets are expanding with strong growth trends,”
the technical opinion stated.
In the online retail market for pet products, the antitrust regulator pointed out that major players like Petlove, Amazon, Mercado Livre, Magalu, Shopee, Shein, and Americanas already compete effectively with Petz/Cobasi. The regulator further observed that marketplaces and competitors with their digital platforms present a strong rivalry.
“Marketplaces in particular can absorb shifts in demand and exert competitive pressure, discouraging price hikes or the withholding of efficiency gains,”
according to the report.
Source: Reuters,Valor International
