The judgment regarding the merger between Petz and Cobasi was considered one of the most complex by the Administrative Council for Economic Defense (Cade) in recent years. But, on Wednesday, December 10th, the green light was given for the creation of the group with combined revenue close to R$ 7 billion, more than 480 stores, and a physical and digital presence in almost the entire country.
The approval from CADE (Brazil's antitrust agency) was accompanied by the signing of a Concentration Control Agreement (ACC) that includes the mandatory sale of 26 stores in São Paulo, in addition to a package of behavioral obligations, which will be closely monitored by the agency.
The approval was granted by majority vote. The rapporteur, José Levi Mello do Amaral Jr., acknowledged the concerns but argued that the set of commitments "creates a better competitive situation than the current one."
In his statement, the rapporteur said that "the perfect is the enemy of the good" and that there is no perfect solution in this merger, but one that solves the essential problems for the business.
The remedy imposed by Cade is concentrated in São Paulo, where Petz and Cobasi have the greatest geographical overlap and where the merger could generate more serious effects on smaller competitors.
The 26 stores that will be sold represented approximately 3.3% of the companies' combined revenue over the last 12 months.
What helped CADE (Brazil's antitrust agency) determine these sales was the market's interest in the assets. Petlove , the third largest retailer in the sector and an active participant in the process, for example, positioned itself as a "natural buyer" of the units.
According to the head of the regulatory body, Gustavo Augusto Freitas de Lima, this only happens when there is a market to immediately absorb the assets. "What gives us comfort is having more than one interested party," he stated. "Whether it will work out or not, we will measure and monitor it."
Under surveillance
In addition to the sale of stores, the ACC includes behavioral obligations that have not been made public. But these involve rules for the execution of the sale, commitments related to business practices, and transparency obligations – points that the court itself said it wants to monitor closely.
The message is that the "superpet" is born with a short leash and GPS tracking. CADE (Brazil's antitrust authority) made it clear that there will be continuous monitoring to assess the impact on prices, product range, commercial conditions, and competition with online operators, independent pet shops, and supermarkets.
The Petz and Cobasi operation had already been analyzed and approved by the CADE's (Administrative Council for Economic Defense) general superintendence in June of this year. But an appeal (still from 2024) took the case to the administrative court. Since then, the process has taken on a public dimension with open hearings, demonstrations from organized sectors, and pressure from rival companies.
The main opposition came from Petlove, which argued that the operation would create a group "30 times larger than the third-placed company," harming market rivalry. The company also maintained that selling 26 to 28 stores would be an "ineffective" remedy.
The dissenting opinion was partially incorporated by a voice from within CADE. Council member Camila Cabral stated that, even when calibrated, the package “leaves many problems,” criticizing methodological limitations in the economic studies and suggesting that the participation of rivals had been overestimated. However, the understanding of the rapporteur and the majority prevailed.
On the B3 stock exchange, PETZ3 shares rose by just over 6% at 2 PM. By 4:10 PM, the stock had appreciated by 4.1% compared to the previous day's closing price. Year-to-date, the stock has appreciated by 8.5%, compared to 31.9% for the Ibovespa index. The company's market capitalization is R$ 2 billion.
