Antitrust agency suggests conditions on CVRD purchases

An antitrust agency in Brazil's justice ministry has suggested the approval with restrictions of Rio de Janeiro-based resources giant CVRD's (NYSE: RIO) acquisition of several mining companies. The secretary of economic rights (SDE), which reviews mergers and acquisitions for the country's administrative council for economic defense (Cade), issued the report on CVRD's purchase of mining companies Ferteco, Samitri, Socoimex and MBR, as well as the sale of CVRD's stake in Brazilian steelmaker CSN. The purchases significantly increase CVRD's share of the iron ore market, railroads and ports, according to the report. This increased share could strengthen CVRD's ability to exercise influence over the iron ore market and access by third parties to the railroad and port system, the report said. CVRD said in a statement to BNamericas that it has presented evidence to the antitrust agencies that "do not justify any restrictions." "The acquisitions do not affect the sale of iron ore, which is totally guaranteed by long-term contracts," CVRD said. SDE recommended approval but suggested the sale of stakes in some companies, such as transport company MRS Logística. It also suggested the elimination of a clause giving CVRD preference to sell iron ore from CSN's Casa de Pedra mine. Cade will now decide whether to approve the sales with or without conditions but is not obligated to include SDE's recommendations.