Brazil's anti-trust watchdog Cade says state-controlled Petrobras' planned sale of LPG distribution subsidiary Liquigas to local competitor Ultragaz would create a monopoly and should be rejected.
In 2016, Petrobras agreed to sell Liquigas to Ultragaz, the LPG arm of Brazilian conglomerate Ultrapar, for around R2.8bn ($818mn) as part of its 2015-16 $15.1bn divestment plan.
"The operation would mean the elimination of a relevant competitor in a market where the four largest companies account for more than 85pc of the entire supply," according to the Cade report on the transaction published today.
The final decision on the transaction will now go to the full Cade court, which can approve, reject or request changes to the deal.
Liquigas has 4,800 authorized distributors and around 22pc market share. Ultragaz also has around 24pc market share.
Earlier this month, Cade rejected Ultrapar's Brazilian fuel distributor subsidiary Ipiranga's planned R2.7bn acquisition of local competitor Alesat Combustíveis (ALE) based on similar arguments.
