A Nestlé/Garoto dispute continues

One of CADE’s most emblematic – and problematic – cases continues to gain new contours. The Merger Case involving Nestlé and Garoto, whose rejection decision, dated 2004, has been contested by the parties. Recently, Nestlé had its request of an agreement to close the legal dispute denied by CADE.

The case had been analyzed under Law No. 8,884/1994, which provided a subsequent (not previous) control of corporate structures. Therefore, the decision on the transaction was published after it had already started its operation, in 2002. Then, a long judicial battle began, in which the parties demanded a re-examination by the authority.

In 2016, the lawsuit was suspended because the companies entered into an agreement with CADE, in which several behavioral and structural obligations were imposed to approve the case. However, the companies did not perform the divestiture within the stipulated term, which is why the litigation is still pending of judgment. At CADE’s October 16 trial session, Commissioner Polyanna Vilanova stated that efforts towards an amicable agreement between the parties should be terminated.