SÃO PAULO — Brazil's anti-trust regulatory body, the Administrative Council for Economic Defense (CADE), has vetoed Braskem SA's purchase of Solvay Indupa SAIC.
CADE said the two companies are the chief competitors in South America's PVC market.
The decision suspends a $200 million deal that was announced in December 2013, in which Braskem, the largest petrochemicals company in the Americas, would have acquired the controlling 70.59 percent capital stake of Brussels, Belgium-based Solvay SA's South American subsidiary. The deal would have made Braskem the top PVC producer in the Americas and the lone producer in Brazil.
CADE said the solutions Braskem offered to help balance the market were “behavioral remedies” that were “too fragile and weak,” according to board adviser Gilvandro Araujo. Those solutions were not revealed publicly, due to confidentiality clauses.
Buenos Aires-based Solvay Indupa has two plants producing PVC resin for pipe and fitting production in Santo Andre, Brazil, and Bahia Blanca, Argentina, with a combined annual production capacity of more than 1 billion pounds.
The companies can file a new proposal that includes the sale of assets, CADE President Vinicius Marques de Carvalho said. He said Braskem should only buy one plant from Solvay.
In a corporate statement on Wednesday, São Paulo-based Braskem said the CADE decision is harmful to the Brazilian plastics industry, and that the PVC market should be considered an international one by Brazil's anti-trust regulator. Braskem said it will evaluate its options following the decision.