Bunge wins unconditional Phase 2 approval for acquisition of soy protein concentrate producer CJ Selecta

Compass Lexecon’s Chile team assisted Bunge and its external counsel from Carey and Mayer Brown during the investigation by the Chilean competition authority (“FNE”) of Bunge’s acquisition of CJ Selecta. The FNE gave its green light to the transaction in early September 2024.

Situation

Agri-food manufacturer Bunge aimed to acquire exclusive control of CJ Selecta, the largest global producer of soy protein concentrate (“SPC”), which is mainly used in feed for fish, pigs, poultry, equine, and cattle. Bunge’s counsel hired Compass Lexecon to assist with the assessment of competitive effects of the deal.

Our Role

We provided economic advice in the context of the merger review by the FNE. Among other tasks, we conducted econometric and qualitative analysis to inform on the relevant product and geographic market definition. As part of this analysis, we studied the substitution patterns between SPC and other raw materials used for salmon feed production, as well as between SPC food-grade and SPC feed-grade. We also analyzed the relationships between domestic and international SPC prices. Additionally, we assessed the entry conditions to the market, the likelihood of entry of new actors, and we analyzed eventual risks of a reduction of potential competition following the standard framework of competition authorities.

Outcome

After a Phase 2 investigation, the FNE concluded that the presence and possible expansion of Brazilian soy derivatives producer, Caramuru Alimentos, would provide sufficient counterweight to the position of the new combined entity. It approved the deal without need for any remedies.

The team

The Compass Lexecon team was led by Fernando Coloma Ríos, and included Gabriel Fernandez, Bernardita Silva and Ignacio Frixone.
They assisted Bunge’s external counsel, Chilean law firm Carey and Brazilian law firm Mayer Brown. The Carey team was led by Lorena Pavic, and included José Pardo, Ismael Bahamonde, Arturo Fasani and Pedro Burnstein. The Mayer Brown team was led by Francisco Todorov, and included Adriana Giannini and Felipe Pereira.