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Itaú's purchase of XP Investimentos 'complex,' says Brazilian antitrust body

Itaú Unibanco Holding SA's acquisition of brokerage firm XP Investimentos CCTVM SA is being regarded as "complex" by Brazil's antitrust regulator Cade and additional information is being requested to analyze the deal, according to a decision published in the country's official gazette.

According to Cade's superintendent-general, the transaction will generate horizontal overlap in the areas of securities brokerage, administration and management of third-party resources and distribution of investment products to clients, among other aspects which could affect competition in the sector, Diário Comércio Indústria & Serviços reported.

"Thus, in order to better analyze the competitive dynamics of the market and the conditions of rivalry in the markets affected by the transaction, it is necessary to carry out new steps in order to deepen the analysis of the case and give the parties the opportunity to present the efficiencies resulting from the operation, which could counterbalance such concentration," Cade said.

In May, Itaú said it has reached an agreement to acquire 49.9% of the total share capital of XP Investimentos, representing 30.1% of the brokerage firm's voting shares, for about 6.3 billion Brazilian reais.

As of Oct. 13, US$1 was equivalent to 3.15 Brazilian reais.