Cade approves with restrictions the sale of Extrafarma to Pague Menos

The Court of the Administrative Council for Economic Defense (Cade) unanimously approved this Wednesday the sale of the Extrafarma pharmacy chain to Pague Menos, imposing restrictions that include the sale of stores in eight cities of the 17 markets considered relevant by the municipality.

“Simple divestment is not enough by itself”, said the rapporteur of the case, Gustavo Augusto Freitas de Lima, when reading his vote in session at CADE’s Tribunal. “Divestment only makes sense if the points are sold to regional chains, national chains or pharmacy association”, he added.

According to him, the sale of the assets is being signed for the Bruno Farma network and the deal should be settled within 180 days. If the deadline is exceeded, a ‘trustee’ will be responsible for the disinvestment.

Pague Menos shares rose 2.8% around 4pm, quoted at R$4.79. The shares are not part of the Ibovespa, which advanced 0.28% at the same time.

The General Superintendence of Cade had already recommended the approval of the sale of the pharmacy chain to Pague Menos in early May, about a year after the announcement of the deal by Ultrapar.

At the time, the Superintendence recommended the sale of approximately 3% of the network to eliminate competition concerns in some areas in the Northeast region.

Ultrapar announced the sale of Extrafarma for R$ 700 million, a deal that will make Pague Menos the second largest pharmacy chain in Brazil, behind only Raia Drogasil, which has been promoting an intense campaign to open stores across the country for some years. Currently, Pague Menos, founded in the early 1980s, is in third place.

The acquisition will increase by more than a third the number of stores of Pague Menos, whose shareholder is the private equity manager General Atlantic, to around 1,500, and reinforce its presence in the North and Northeast regions of Brazil.