Paper Excellence said, in a statement, that it understands the decision of the general superintendent of the Administrative Council for Economic Defense (SG/Cade), Alexandre Barreto de Souza, to be “a huge mistake”. The note also informs that the company “will take all necessary measures to clarify and reverse such injustice”. The preventive measure responds to the request of Eldorado, controlled by J&F. While in force, Paper is prohibited from voting at general meetings, among other restrictions.
“Paper reiterates its commitment, once taking full control of Eldorado, to invest another R$20 billion to double the factory’s production capacity with the construction of a second production line, which will generate jobs and taxes for the country” , says the note.
The SG/Cade decision was taken as part of an investigation into alleged anti-competitive conduct carried out by Paper in the pulp market in Brazil. SG/Cade adopts preventive measures when it understands that there is a risk of “irreparable or difficult-to-repair damage” to the market, which is contested by Paper.
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The multinational of Indonesian origin also qualifies the argument that it would be causing “financial and competitive losses” to Eldorado as “unfounded and illogical”. “Unfounded because it uses the premise of supposed harm to competition to intend to interfere with Paper’s corporate rights, in an unprecedented strategy in Brazilian law. Illogical because it assumes that a shareholder with 49.41% of the share capital and who has been fighting for six years to have 100% of Eldorado’s capital could act to harm the company itself”.
Paper and J&F have been fighting on several fronts for control of Eldorado for more than six years. Paper acquired 100% of Eldorado in 2017, but the contract was taken to court. Currently, Paper has 49.41% of the pulp company and J&F maintains control of the majority share, 50.59%. This afternoon, a conciliation hearing will be held between the two companies at the Federal Supreme Court (STF).
Ricardo Bellino from Ensina
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