Brazil: HSBC $5.2 billion sale gets deeper antitrust scrutiny

HSBC Holdings Plc’s sale of its Brazil unit to Banco Bradesco SA will require a deeper look from the nation’s antitrust regulator, which is extending its inquiry into the $5.2 billion transaction to gauge the
effects on competition in the banking industry.

Cade, as the regulator is known, told its economic department to study the transaction, according to a statement published Monday in the government newspaper Diario Oficial.

The authorities will also require the two banks to detail efficiency gains generated by the transaction and provide studies showing how they could mitigate regulators’ concerns about diminished competition.

The deal “boosts banking concentration in Brazil, which generates the need to carefully analyze eventual price increases for financial and non-financial products,” Cade said in a Jan. 28 report posted on its website.

The regulator said it had 240 days to analyze the deal, starting from Oct. 27, which would mean a decision would be announced by the end of June. Cade said it may extend that deadline further.

Full content: Bloomberg

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