On May 16th, 2013, the General-Superintendence - SG of CADE issued the Technical Note nº 140, regarding the analyses of the Concentration Act nº 08700.004054/2012-19, related to the market of guardrails.
Through the mentioned transaction, the company Armco, active in the segment of metallurgy, aims to acquire assets related to the manufacturing of guardrails and galvanizing from Mangels, active in the segments of steel, wheels, cylinders and galvanizing.
If the Concentration Act is approved, these two Brazilian companies would jointly control over 65% of market share in the segments of guardrails and galvanizing. Armco is currently the leading company in the field, followed by Mangels.
The analysis conducted by SG verified an horizontal overlap in the segments of guardrails and galvanizing. Moreover, competitive disadvantages for other players were noticed, as well as the fact that nor importations or new players entry would be capable of maintaining competition in the segments.
Since no remedies capable of eliminating concerns regarding the competitive issues were found, SG suggested the Concentration Act's disapproval.
The case now awaits for a final judgment in CADE's Tribunal, where Mr. Ricardo Machado Ruiz, case's Reporting Commissioner, will present his vote.