Citrovita and Citrosuco Transaction

On May 5, 2011, the European Commission (EC) cleared without conditions the proposed combination of Citrovita (Votorantim group) and Citrosuco (Fisher group) to form the world’s largest wholesale supplier of orange juice. Unconditional clearance was awarded after an in-depth, Phase II review of the transaction by the EC. Compass Lexecon economists were retained by Marc Pittie of Bredin Prat for both parties. The Compass Lexecon team included David Sevy (Paris), Nadine Watson (Madrid) and Jeremiah Juts (Paris) and received support from Kirsten Edwards (London), Enrique Andreu (Madrid) and Catalina Campillo (Madrid). We provided economic analyses relating to market definition (at wholesale and retail levels) and potential unilateral effects. Statistical and econometric analyses emphasized the likely persistence of significant competitive constraints exerted by other products and by the two other main orange juice suppliers on the combined entity after the merger. In particular, we demonstrated that competitors would not be limited by capacity constraints to offset any declines in production volumes of the merged entity.