Reports from Uruguay have indicated that the local competition watchdog, the Comisión de Promoción y Defensa de la Competencia (CPDC), has blocked a deal between meat groups Minerva Foods and Marfrig. However, both companies have denied receiving any communication from the CPDC regarding the blockage of the deal. The deal, which was announced last year, would have seen Minerva acquire cattle slaughtering and deboning plants from Marfrig for a reported price of 7.5 billion reais ($1.53 billion). The CPDC’s decision to stop the purchase has raised concerns about the potential impact on competition in the meat processing sector in Uruguay.
Minerva Foods currently operates four plants in Uruguay and the acquisition of three additional plants from Marfrig would have increased its market share in the country. The CPDC reportedly blocked the deal in the second stage of the approval process, citing concerns that it would unfairly affect other beef processors. Both Minerva and Marfrig have a period of ten days to present their defenses before a final ruling is made. The deal, if approved, would have expanded Minerva’s cattle slaughtering and deboning capacity by 44%.
The President of the National Meat Institute (INAC) of Uruguay, Conrado Ferber, has expressed concerns about the proposed acquisition, stating that it would result in one of the Brazilian multinational corporations controlling 45% of the country’s slaughterhouse market. Ferber highlighted the potential for excessive consolidation in the meat processing sector and the implications it could have on competition and labor stability. Labor unions and industry observers have also voiced their opposition to the acquisition, citing concerns about potential job losses and market dynamics.
The CPDC’s decision to block the deal comes at a time when regulators around the world are increasing their scrutiny of mergers and acquisitions in various industries. The European Commission recently designated hotel reservation platform Booking.com as a “gatekeeper” under the EU Digital Markets Act, subjecting it to stringent obligations aimed at ensuring fair competition and consumer choice. Similarly, the US Federal Trade Commission (FTC) is currently engaged in an antitrust lawsuit against Amazon, accusing the company of leveraging its dominance in the retail market to stifle competition and inflate prices.
The blockage of the Minerva-Marfrig deal by the CPDC in Uruguay highlights the growing regulatory scrutiny of mergers and acquisitions around the world. The decision raises concerns about the potential impact on competition in the meat processing sector in Uruguay and the consolidation of market power by multinational corporations. As regulators continue to focus on ensuring fair competition and consumer choice, companies involved in mergers and acquisitions will need to navigate a complex regulatory landscape.