The transaction could potentially reduce the competition in markets of the Brazilian Northeast.
On 10 May, the Tribunal of the Administrative Council for Economic Defense (CADE) blocked Hapvida’s acquisition of Group Smile, a health insurance business. The deal involves an asset transfer in the market of healthcare services.
The Office of the Superintendent-General and the Department of Economic Studies of CADE analysed the merger, which raised significant concerns, especially in the industries of individual/family, group, and corporate health insurance plans.
In addition to the transaction resulting in high market concentration, specifically in the Northeast of Brazil, the authority identified it could reduce competition and worsen the current scenario, especially in the states of Alagoas and Paraíba, which already presented low effective competition.
Commissioner Luis Braido, the rapporteur of the case, explained, "The companies Unimed, Hapvida, and Smile, together, have almost 90% of the market (in the Northeast region). Therefore, a market rivalry analysis and other aspects prompted us to block the transaction."
The Tribunal of CADE, in its majority opinion, blocked the transaction, as it did not find a solution to mitigate the competition concerns.
Access Case No. 08700.004046/2022-36.