Petlove asked the Administrative Council for Economic Defense (Cade) to be the buyer of the divested assets in the event of approval of the merger between Petz () and Cobasi. The operation will be judged by the competition defense body in the session next Wednesday, 10th, and there are indications that it could be approved with remedies, that is, restrictions to reduce market concentration and mitigate competitive impacts in some locations.
The merger has been analyzed by Cade since mid-2024. Petlove, the third largest retailer in the pet store sector in Brazil, entered as a third party interested in the process and had been defending the rejection of the operation.
In the petition presented this Monday, the 8th, Petlove reinforced its concern about the impacts of the merger of the companies Petz and Cobasi. “Although it remains convinced that the operation should be rejected, it understands as natural the attempt by the applicants to seek to make the merger viable through a set of remedies, in order to propose a divestment capable of eliminating competition concerns”, considered the company.
Asset Divestment
One of the possible remedies that can be adopted to condition the combination of the two companies is the divestment of assets. It is in this context that Petlove places itself, claiming to be the “natural candidate for the acquisition of assets”, due to its size, its market positioning and its ability to operate online.
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According to Petlove’s legal team, it is common for Cade to establish criteria that the buyer must meet to guarantee the effectiveness of the remedy. When a buyer is identified, Cade must approve it to ensure that it meets the necessary criteria of independence, viability and effectiveness. Then, the companies involved in the operation are responsible for identifying a buyer that meets the imposed criteria and submitting it to the board for approval.
Petlove also claimed to have revenues almost five times higher than other chains on the market, including Petcamp, Petland and American Pet. “It is, therefore, the only company that, although to an incomparably lesser extent than the applicants, has relevant national operations through the online market, brand recognition and strategic omnichannel“, defended the third party interested in the business.
If the merger is approved with remedies, the court’s understanding must diverge from the understanding of Cade’s General Superintendence, which, in June this year, approved the operation without restrictions. An appeal was filed on the 23rd of that month, which led the case to go to the administrative court.
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