//14 Jun 2011
Brasil Foods, the world’s largest poultry exporter has asked Brazil’s antitrust regulator, CADE, for more time to negotiate a deal over the purchase of Sadia SA.
A key member of Brazil's antitrust regulator Cade voted on Wednesday against the merger that created food processor Brasil Foods, a setback that caused the company's shares to plummet and prompted the body to suspend a vote on the ruling.The shares have sank 4.6% to 24.09 reais.
Carlos Ragazzo, the Cade director responsible for the ruling, voted against the June 2009 takeover of poultry producer Sadia by smaller rival Perdigao, saying the move to combine both firms created a giant that exerts too much power in a market where competitors face strong entry barriers.
Fellow members of Brasilia-based Cade's board decided to suspend the ballot on the ruling until June 15, in order to assess the real impact of a decision that could spark billions of reais in losses to investors, shareholders and state-run lenders.
Cade's rejection of the transaction could thwart one of Brazil's biggest government-engineered mergers. Brasil Foods was formed after food giant Perdigao agreed to take over rival Sadia, which failed after reporting billions of dollars in derivatives-related losses in the wake of the global financial crisis of 2008. The government facilitated the transaction by deploying large credit lines through its state development bank BNDES.
Source: Reuters
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