On April 13, 2022, the Secretariat of Domestic Trade (the “Secretariat”) issued an injunction in the framework of the investigation for the notification of the transaction consisting of the acquisition of the joint control of INGREAR HOLDING S.A. (“INGREAR”) by ARCOR S.A.I.C. (“ARCOR”) and INGREDION ARGENTINA S.R.L. (“INGREDION”). The Secretariat ordered that the businesses of the acquiring companies be maintained as they are, i.e., without the economic operation.
This injunction is the first to be issued in the context of an economic concentration in several years and was ordered within the framework of the approval of the Statement of Objection issued by the National Commission for the Defense of Competition (“CNDC”).
The CNDC understood that the operation causes a reduction in the number of competitors and a significant increase in the concentration in the corn wet milling markets and in the commercialization of its derivatives, which makes it difficult for competitors to avoid any attempt to abuse their dominant position. Likewise, the CNDC highlighted that there are certain conditions that could cause the operation to generate coordinated and vertical effects, resulting in a detriment to the general economic interest.
The CNDC usually issues statements of objections when it considers that the notified transaction could restrict or distort competition in a specific market and, therefore, among its recommendations to the Secretariat, the CNDC advised to summon the parties to a special hearing to analyze possible measures to mitigate the possible negative effect of the transaction on competition.
In this line, the CNDC considered it necessary to impose an injunction in terms of Section 44 of Law No. 27,442, in order to prevent damages to the competition regime. Thus, ARCOR and INGREDION must maintain their businesses separately until the conflicts raised in the Statement of Objection are resolved, in order to avoid a potential greater damage to competition.
This report should not be considered as legal or any other type of advice by Allende & Brea.
