Wednesday, 5th May 2010

Brazil′s Administrative Council of Economic Defence (CADE) has approved telecoms company Telefónica′s purchase of rival operator Telecom Italia.

The long-running deal began in 2007, but was only conditionally approved by Brazilian telecoms regulator Anatel. The regulator imposed restrictions on the purchase in 2009 because of concerns it would lessen competition.

CADE has now agreed to the merger on the condition that both Telefónica and Telecom Italia′s mobile telephone companies, TIM Brazil and Vivo, continue to operate independently.

In 2007 Telefónica purchased a 42 per cent share in holding company Telco SPA, which holds a controlling stake in Telecom Italia.

′This is a very significant case because CADE has for the first time issued a detailed decision on its understanding of potential competition concerns arising out of a minority stake in a competitor,′ says Tito Amaral de Andrade, partner at Machado, Meyer, Sendacz e Opice Advogados and counsel to Telefónica.

Juliano Souza de Albuquerque Maranhão, partner at Sampaio Ferraz Advogados, says the decision shows CADE′s ′concern with coordinated market power within merger control.′

′By restricting a merger involving the acquisition by a company of a minority share of its competitor, CADE shows its concern that the transaction may increase the chances of collusion,′ he says.

 

Counsel to Telefónica

Machado Meyer Sendacz Opice

 

Partners Tito Amaral de Andrade and Gustavo Lage Noman

(Latin Lawyer 06.05.2010)

(Notícia na Íntegra)