Photo: Brazil Will Allow Merger of Orange Juice Companies
The Cade anti-trust agency has approved the merger between Brazil’s Citrosuco and Citrovita, a tie-up that creates the world’s largest orange juice producer.
The Brasilia-based regulator approved the transaction unanimously Wednesday but conditioned it on the companies’ signing an accord to protect independent producers, which must be informed about market prices and production volumes, state-run Agencia Brasil said.
The new company, a 50/50 joint venture between Citrosuco and Citrovita, respectively owned by the Brazilian conglomerates Fischer Group and Votorantim Group, also is prohibited from expanding its own orange plantations over the next five years.
The European Commission, which was consulted about the merger because the European Union is the Brazilian companies’ main market, gave the green light to the deal in May.
The new company will have a 45 percent share of the orange juice market in Brazil and take over leadership from Cutrale, which has a 35 percent share.
The merged entity will control 25 percent of the global orange juice market with its seven plants, eight port terminals, five vessels and groves in Brazil and abroad.
Citrosuco and Citrovita announced an agreement to merge their operations in May 2010.
In addition to concentrated orange juice, the new company also will produce by-products such as essential oils and citrus pulp pellets used in the production of chemical products and solvents, aromas and fragrances, paints and cosmetics.
Votorantim is an industrial conglomerate that also is one of Brazil’s leaders in the cement and concrete and mining and metallurgy industries, while Fischer also has diversified operations that include the provision of maritime services to oil platforms.