By Leticia Fucuchima
SAO PAULO (Reuters) – Abrace, an association that represents large consumers of natural gas, intends to file an appeal against the approval given by the general superintendent of the Administrative Council for Economic Defense (Cade) to the purchase of piped gas distributor Gaspetro by Compass Gás and Energy.
The entity, which is one of the parties interested in the operation, believes that the decision of the body may lead to the replacement of the old national monopoly by a model with “enormous” vertical and horizontal market power in the sector.
In a note, Abrace also said that Cade’s opinion used non-restrictive interpretations to make Compass eligible, since, by the term of cessation of conduct signed between Cade and Petrobras, the sale of Gaspetro could not take place with a trading agent.
The General Superintendence of Cade approved without restrictions the acquisition of the majority stake of Petrobras in Gaspetro by Compass, a subsidiary of Cosan.
Gaspetro is a holding company that holds equity interest in 18 piped gas distribution companies in several states of Brazil, which should allow the Cosan conglomerate to advance in the sector – the group already operates in the production of sugar and ethanol, in addition to the distribution of fuel and gas, among other businesses.
The agreement between the companies was closed in July last year, for around 2 billion reais, for 51% of Petrobras’ share. The remaining 49% of Gaspetro belong to Japan’s Mitsui.
The deal has been facing resistance due to fears among authorities, specialists and associations that the operation could allow a large concentration of the market in the hands of a single company, contrary to the opening of the gas market to new agents.
The ANP even recommended that Cade disapprove the sale operation and that the process be reopened.
CADE’S OPINION
In a note released this Tuesday, Cade says that, after analyzing the operation, the superintendence concluded that possible vertical integrations resulting from Gaspetro’s participation in gas distributors would not be sufficient to characterize the business’s harmful potential.
Compass already has businesses in the energy and gas sector, operating in the distribution of natural gas through Comgás, a São Paulo concessionaire, and in the commercialization and infrastructure segments.
In the superintendence’s assessment, the consolidation of Petrobras’ exit from the gas distribution link represents a gain in the competitive environment.
“In summary, 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 )”, concluded the opinion.
Also according to the document, any concerns from a competition point of view are also likely to be addressed through sectoral regulation.
MARKETPLACE
Abegás, which represents piped gas distributors, has a positive view of the operation.
In a note, the executive president of the entity, Augusto Salomon, said that Cade’s opinion recognizes the transaction as beneficial to the competitive environment and is a very important signal for Brazil to move towards an open and competitive gas market.
Compass Gás & Energia said in a statement that it trusts the technical analysis of Organs competent bodies and continues to work for a more open, competitive and competitive natural gas market.
(By Leticia Fucuchima)
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