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Brazil central bank, antitrust regulator end dispute on M&A approval authority

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Brazil central bank, antitrust regulator end dispute on M&A approval authority

Brazil's central bank and antitrust watchdog Cade on Feb. 28 signed an agreement establishing a framework for both entities to analyze mergers between financial institutions, ending years of dispute over M&A approval authority.

Under the deal, both Cade and Banco Central do Brasil will express opinions on merger deals, which will require approval from both entities. However, the central bank will have the ultimate say in cases where Brazil's financial stability is deemed to be at stake. Even then, the central bank will still be required to explain its reasoning and decision to Cade.

The agreement, which follows the creation of a joint working group to tackle the issue in August 2017, will see both entities increase cooperation with each other and exchange more information when analyzing mergers.

In a statement, the central bank said the agreement will improve regulatory efficiency, allow for a deeper analysis of deals, and ease information demands on banks looking to merge. The central bank and Cade have also agreed to seek approval for a draft bill that would enshrine their cooperation in national legislation.