The Cade’s Court (Administrative Council for Economic Defense) approved this Wednesday (15), by three votes to two, the merger of the Brazilian leader in the vehicle leasing and fleet management market, Localiza, with the second largest company sector, the United.
In practice, Localiza bought Unidas, which should generate a concentration of 72% in the car rental segment (called RAC, from the English “rent a car”).
The court, however, has imposed a settlement that provides for the “significant” sale of assets, including the Unidas brand. Companies will also have to dispose of part of the fleet. But the details about the “remedies” that must be applied to avoid market concentration, however, were not disclosed in the decision.
The case was decided by the president of Cade, Alexandre Cordeiro Macedo, who followed the vote of the rapporteur Lenisa Prado, for whom the proposed remedies to try to avoid harm to competition are sufficient.
“The post-agreement and drug-free operation increases participation [da Localiza] to 50% and with medicines to below 50%”, said Macedo in the decision, considering both business segments – outsourced fleet management (when companies rent vehicles for their activities) and vehicle rental.
In turn, board member Paula Farani considered that the operation announced last year, in which Localiza made an offer to buy Unidas for around R$ 12 billion, is a “merger towards the monopoly”. Her vote was accompanied by councilor Sérgio Ravagnani, who considered that the proposed divestments “are insufficient” to mitigate the risks to competition.
The operation faced opposition from rivals such as Movida and Ouro Verde.
The vehicle leasing and outsourced fleet management market had revenues of R$ 17.6 billion last year. Of this total, R$ 7.8 billion correspond to car rental for individuals, which includes application drivers, according to data from Abla (Brazilian Association of Car Rental Companies).
To get an idea of ​​the concentration, in the rental market for individuals, 21.4 million daily rates were sold last year. Of this total, Localiza accounted for 67.8%, Movida for 23.6% and Unidas for 4.1%, according to data from Lafis Consultoria, obtained by leaf.
(With Reuters)
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