​In 2013, the Administrative Council for Economic Defence (CADE) analysed the acquisition of Innova SA (held at the time by Petrobras SA) by Videolar SA and its controlling shareholder, Lírio Parisotto. The transaction involved a horizontal overlap of 70% of the Brazilian polystyrene market – a market with low rivalry and a high entry threshold.


After the judgment session on 1 October 2014, the CADE found that the merger was likely to lead to significant competitive risks in the Brazilian polystyrene market and, therefore, decided to subject its approval to remedies.

These merger remedies comprised a hybrid provision of:

  • a minimum polystyrene production for a 10-year term;
  • non-exclusive licencing of styrene and polystyrene monomer patents for a five-year term;
  • adoption of a compliance programme;
  • prohibition of acquiring or leasing Brazilian-produced polystyrene plants for a 10-year term;
  • application of tax measures;
  • investments in research and development;
  • submission of an estimate of efficiencies transferred to consumers;
  • submission of reports on the competitive dynamics of the market for a 14-year term; and
  • adoption of an open-door policy with the CADE.

A few months later, Unigel Plásticos SA alleged that Videolar was systematically violating the merger remedies, with particular regard to the minimum polystyrene production. These complaints were reaffirmed over the following years and, on 30 March 2020, the CADE's General Superintendence finally reached a decision of ex-post prohibition of the transaction, followed by undoing the merger and imposing fines. This decision was also confirmed by the CADE's administrative tribunal, based on the CADE's General Superintendence's decision.

After new rounds of discussion between the CADE and the merging parties, a new decision was reached in October 2021, allowing the merger to move forward with new remedies. The remedies provided commitments for the investment in the research and development of polystyrene and alternative plastic resins by the merging parties, in addition to the payment of fines for violating the original remedies (9 million reais).


These recent developments in Videolar/Innova may have a significant effect on the CADE's merger enforcement. Indeed, the CADE's revision of long-running mergers may lead to the need for further action on similar cases. One such case is Nestlé/Garoto, a merger that was analysed under the former ex-post standard and originally rejected by the CADE, but the decision was later questioned in the courts by the implicated parties. In addition, the discussed case may pose further issues to the design of merger remedies, especially as regards behavioural commitments and their conveniency, which could affect negotiations.

For further information on this topic please contact Marcela Mattiuzzo or Arthur Sadami at VMCA by telephone (+55 11 3939 0708) or email ([email protected] or [email protected]). The VMCA website can be accessed at