Braskem′s acquisition of rival Quattor Petroquimica can proceed after Brazil′s Council for Economic Defence (CADE) conditionally approved the tie-up last week. The clearance means Braskem will become the largest petrochemical company in the Americas.

Braskem produces more than 15 million tons of thermoplastic resins (Credit: Joost J. Bakker IJmuiden)

Braskem produces more than 15 million tons of thermoplastic resins and other petrochemical products. Quattor Petroquimica and Braskem are Brazil′s only domestic suppliers of polyethylene and polyethylene resins, which are used in plastic packaging.

Under the approval terms, Braskem must notify CADE of any agreements with foreign companies for the supply of resin that contain exclusivity clauses. It will also periodically report information on these agreements to CADE, as well as on resin imports and sales.

CADE found that the deal would not lead to an increase in Braskem′s share in the market for thermo-plastic resins, because it said the company faced competition in this market on an international level.

According to Maria Cecilia Andrade at Mattos Muriel Kestener, who is advising Braskem, data obtained from international markets shows that more than 95 per cent of the worldwide manufacturing capacity of thermo-plastic resins is held by Braskem′s competitors.

Belgian chemical company Solvay opposed the merger, claiming Braskem would be able to discriminate against it in the supply of raw materials used to manufacture PVC products. But CADE found Braskem would have no reason to discriminate against Solvay, since the PVC market is also an international one.

′The Brazilian petrochemical sector has been under close scrutiny by CADE for over ten years,′ says Andrade, ′but no concentrations have been blocked as the authorities acknowledge the efficiency and rationality of the vertical integration process′ in allowing the country′s petrochemical sector to compete in a global market.

Counsel to Braskem

·         In-house counsel - Cristiane Silvestre, Mauricio Ferro and Gustavo Valverde

·         Mattos Muriel Kestener

Partners Ubiratan Mattos and Maria Cecilia Andrade and associates Pedro Vicentini and Alessandra Oshiro

·         Brasil Pereira Neto Galdino Macedo Advogados – BPGM

Partner Caio Mario da Silva Pereira Neto

Counsel to Petrobras

·         In-house counsel - Andrea Damiani, Alex Messeder and Juliana Quintela

·         Machado, Meyer, Sendacz e Opice Advogados

Partner Tito Amaral de Andrade and associate Érica Yamashita

(Latin Lawyer 28.02.2011)

(Notícia na Íntegra)