Cade approves unrestricted purchase of Gaspetro by Cosan

The general superintendence of CADE (Administrative Council for Economic Defense) approved without restrictions the transfer of 51% of Gaspetro, a Petrobras subsidiary that controls piped gas distributors, to Compass Energia, of the Cosan group.

The operation is criticized by the industry, which sees risks to competition with the formation of a group with a dominant position in the distribution sector and also acting in the sale of fuel, which would be prevented by the new Gas Law, approved in 2021.

The R$2 billion operation was announced in August 2021 and guarantees Compass a stake in 19 gas distributors. The Cosan company already controls Comgás and, at the end of the year, won the privatization auction of a concessionaire in Rio Grande do Sul.

With the purchase of Gaspetro, Compass now has influence over two-thirds of the country’s piped gas sales. The company has also been taking its first steps in the segment of selling the product to distributors.

CADE’s superintendence assesses, however, that “possible vertical integrations resulting from the participation of Gaspetro in distribution companies would not be sufficient to characterize the harmful potential of the merger”.

According to the assessment, Petrobras’ exit from this segment represents gains for competition. The sale of Gaspetro was one of the commitments assumed by the state-owned company in terms of ceasing investigations into abuse of economic power in this market.

“It is understood that the post-operation scenario is better for the competitive environment than the pre-operation scenario, given that – even if it transfers Gaspetro to a single economic agent – the sale removes the participation of the incumbent agent (Petrobras), which is also a monopolist in activities upstream of the chain, notably production”, says the opinion.

The operation was questioned by large consumers of natural gas. This Tuesday (8), the Embrace (Brazilian Association of Energy Consumers) released a note saying it hopes to reverse the decision in Cade’s collegiate.

“The decision does not seem to reflect Cade’s historical behavior, of deeply evaluating the effects of a merger. deal with a trading agent”, says the text.

“At the limit”, he continues, “this decision may lead to the replacement of the old national monopoly by a model with enormous vertical and horizontal market power operating in the sector”.

According to CADE, if within 15 days no appeals are filed or if CADE’s court does not ask for an analysis of the concentration process, the superintendence’s decision has a final character, with the final approval of the operation.

The other 49% of the capital of Gaspetro belong to the Japanese Mitsui, which has not yet expressed itself on the exercise of the preemptive right over Petrobras shares. As soon as the operation was announced, state governments, partners of the company in distributors, said they could exercise their right, buying Gaspetro’s stake in the companies.