From Post- to Pre-Merger Notification: The Ultimate Outreach Challenge

Posted by D. Daniel Sokol

Carlos Emmanuel Joppert Ragazzo & Cristiane Landerdahl de Albuquerque (CADE) explain From Post- to Pre-Merger Notification: The Ultimate Outreach Challenge.

ABSTRACT: The new Brazilian Competition Law (Law no. 12,529/11) brought two major changes from the previous statute (Law no. 8,884/94): (i) it changed the enforcement structure by merging the functions previously performed by different governmental bodies into one called the General Superintendence, which is now responsible for merger review and anticompetitive conduct investigation; and (ii) it initiated a pre-notification system through which CADE´s approval is required before the closing.

Even though the new enforcement structure was widely regarded as an improvement, the implementation of a pre-merger system has generated some level of anxiety throughout the business community, especially on account of the review period established by the statute (which allows the Brazilian Competition Authority a 240-day period for merger review, with the possibility of either 60- or 90-day extensions). The increasing number of transactions notified in Brazil, as well as the lack of staff, has created an overall apprehension as to the likely performance of the new Brazilian Competition Agencies in reviewing mergers under a pre-notification system.

Therefore, not only does CADE face the natural challenges that a transition from a post- to pre-merger system entails, but it also has had to develop an outreach strategy to communicate the transition efforts and its likely results to the business community. This article describes the transition process that CADE has undergone towards a pre-merger review, which encompassed a massive communication strategy not yet finished.