The Administrative Council for Economic Defense (CADE) has imposed fines totaling more than R$3.8 million (USD 640,383) on NovaAgri Infra-Estrutura de Armazenagem e Escoamento Agrícola SA, Safras, and six individuals for engaging in gun jumping—completing transactions before regulatory approval.
The decisions were made during CADE’s 240th Ordinary Judgment Session on November 27, 2024.
The violations stem from Safras’ acquisition of a rural property in Nova Maringá, Mato Grosso, which included a solid bulk storage facility owned by NovaAgri. Investigations revealed that NovaAgri received the full transaction price stipulated in the contract before CADE had approved or analyzed the deal. This early payment allowed NovaAgri to transfer possession of the property prematurely, breaching competition laws.
For its role, NovaAgri and six individuals were fined R$1.83 million, following the recommendation of rapporteur Victor Oliveira Fernandes. Separately, Safras was fined more than R$2 million, with rapporteur Diogo Thomson citing an intentionality multiplier and a voluntary notification reduction in calculating the penalty. Both decisions were unanimously upheld by CADE’s Tribunal.
What is Gun Jumping?
Gun jumping occurs when companies involved in a merger or acquisition finalize the transaction before securing approval from antitrust authorities. This practice can include the transfer of sensitive information, premature payments, or property possession, which undermines the regulatory body’s ability to evaluate the transaction’s competitive implications.
The fines will be directed to the Ministry of Justice and Public Security’s Fund for the Defense of Diffuse Rights (FDD).
