Cade refuses the last request of Nestle to the acquisition of Garoto

According to the agency South American Business Information and the Brazilian newspaper Valor Economico, the Brazilian Administrative Council for Economic Defense Cade denied the last request of Nestle to the acquisition of the chocolate plant Garoto. Nestle may appeal to the Justice arguing that there were possible irregularities during this process.
Garoto was acquired on February 2002 and Cade has been investigating the business since February 2004. In October 2004, Nestle proposed the sell off of chocolate assets amounting to 10% market share but Cade refused the offer concluding that the acquisition would generate market concentration. According to Cade s decision, Nestle has 60 days to sell off Garoto. Cadbury, Masterfoods and Hershey s already showed interest in the operation.
Nestle acquired Garoto for R$570m (€176m) in 2002 and already invested R$105m (€32,6m) in the group. After the take over, Garoto s income with sales increased by 51% from R$468.9m (€145,4m)in 2001 to R$708.5m (€219,6m) in 2004. Garoto increased net profit by 61% to R$62.8m (€19,5m) in 2004 over R$38.9m (€12m) in 2003.