Nestle given until 1H18 by CADE to sell brand package – reported rumor (translated)
20 OCT 2017
Nestlé [VTX: NESN] has been given until 2018 by the Brazilian Competition Authority CADE to sell a package of more than ten brands, Valor Econômico reported, without citing sources.
The original deadline to conclude the sale was October 2017, the Portuguese-language item said.
The requirement to sell the assets was stipulated in an agreement entered into by CADE and Nestlé to end a legal dispute concerning Nestlé’s acquisition of Brazilian chocolate maker Garoto, according to the report.
CADE ordered Nestlé to divest Garoto in 2004, the newspaper said. At that time, Brazilian legislation did not require CADE’s prior approval for mergers and acquisitions – such a requirement was only instituted in 2012, when Brazil’s new competition law went into effect.
The companies appealed CADE’s ruling in court, the item noted. CADE and Nestlé entered into an agreement to settle the dispute last year.
As reported, the package includes the Serenata de Amor, Chokito, Lollo, and Sensação brands, in addition to recipes and production secrets. The brands cannot be sold to a large competitor, which excludes Illinois-based Mondelez[NASDAQ:MDLZ] from the negotiations. The assets are likely to be acquired by smaller rivals, such as Argentina-based Arcor and Pennsylvania-based The Hershey Company