CADE updates FAQ list for merger filing criteria in Brazil

Brazil’s Antitrust Authority (CADE) published, on April 23, 2025, an updated version of its FAQ section regarding merger filing criteria. An unofficial English translation of the updated FAQ is available here.

Developed by a working group comprised of members of CADE’s General Superintendence and the offices of CADE’s Administrative Tribunal, the FAQ contains six main sections, each of which refers to specific aspects of the mandatory filing criteria:

• Revenue and business volume;
• Timing of economic group analysis;
• Definition of an economic group;
• Analysis of cross-border transactions;
• Minority shareholding acquisitions; and
• Associative agreements.

Key clarifications provided in the FAQ include:

Sections 1, 2, and 3 – Revenue and business volume, the timing of economic group analysis, and definition of an economic group

According to the Brazilian Competition Law (Law No. 12,529/2011), certain corporate transactions in which at least two of the economic groups involved meet specific revenue criteria must be submitted to CADE. The FAQ included the following CADE guidelines for defining the economic group and for revenue calculation:

• For revenue calculation purposes, companies must consider the sum of the gross operational revenues that each of the companies registered within the relevant economic group(s) in the fiscal year preceding the transaction. However, intragroup/intercompany sales may be excluded;
• The relevant date for determining the structure of the economic group is the execution date of the binding agreement. Companies that are in the process of being acquired or divested by the group at that time should be included in the revenue and substantive analysis (if applicable);
• The revenue criteria must be met by at least two of the economic groups involved in the transaction. Based on the wording of the Brazilian Competition Law, different economic groups on the buyer’s side of a corporate transaction can, at least in theory, meet the revenue thresholds. However, in share purchase transactions, CADE’s established practice requires the revenue criteria to be met by at least one group on the buyer’s side, and by another group on the seller’s side;
• A target company may be considered part of an economic group if its shareholders hold joint control, even if individual stakes are below 20%. Regarding the definition of control for the purpose of determining an economic group, sole control refers to the ability of one shareholder to establish business guidelines and direct the company’s business activities, regardless of the presence and votes of other shareholders. In turn, shared control refers to a situation in which the control of a given company is continuously exercised by a group of shareholders. The control structure can be identified through shareholder agreements, particularly those including any minority shareholder rights that go beyond mere investment protection;
• Intragroup corporate reorganizations are not subject to mandatory filing when new shareholders (outside of the economic group) do not enter, or there are no changes in the percentage of shareholding within the economic group.

Section 4 – Cross-border transactions

The FAQ highlights that cross-border transactions may be subject to mandatory filing if they produce (even if indirectly or to a limited extent) or may produce effects in Brazil.

• As long as it is economically rational, from a geographical and logistical point of view, for the company to offer its goods or services in Brazil, there is potential for producing effects. This is usually the case when the relevant markets involved in the transaction are global or encompass part of Brazil’s territory.
• The lack of past, current or planned activity in Brazil is not (by itself) sufficient to rule out potential effects in the country. As such, potential effects may arise even when the company or asset involved is not located in Brazil and does not generate revenue in Brazil, or even when the asset to be acquired is not operational.

Section 6 – Associative agreements

As per the Brazilian Competition Law and CADE Resolution No. 17/2016, the FAQ clarifies each of the four criteria for determining when an associative agreement must be filed:

• Minimum term: agreements with a term of less than two years will only be subject to mandatory filing if they are extended to cover a total period of more than two years from the moment the agreement is signed, not from it is amended. The agreement must be filed before it has been in force for two years.
• Joint ventures for economic activity: This criterion is met when parties collaborate in a coordinated manner to carry out economic activities, even if they are not for profit. CADE may consider governance structures, the level of interdependence between the parties, and the use of shared sources (among other factors);
• Sharing risks and results: typically evidenced via clauses addressing shared investment, revenue targets, pricing coordination, or exchanges of competitively sensitive information.
• Competition in the market relevant to the agreement: this criterion is met whenever two or more companies are active in the same relevant market. However, CADE also considers horizontal and vertical overlaps between existing products/services and those under development.

The updated FAQ comes in the wake of intense discussions around the need for transparency and updating the criteria applicable to merger filings in Brazil. As always, a case-by-case analysis remains essential when assessing whether a transaction should be filed.

For more information, please contact Mattos Filho’s Antitrust practice area.