Brazilian medical-diagnostics company Diagnosticos da America SA (DASA3) fell to an almost 11-month low on concern antitrust regulator Cade will delay or block its acquisition of a rival.
Dasa, as the company is known, slumped 2.3 percent at 12:17 p.m. New York time to 18.25 reais, the lowest since Sept. 3.
Cade’s general attorney, Gilvandro Vasconcelos Coelho de Araujo, recommended ordering Dasa to keep its administration separate from MD1 Diagnosticos SA on concern the combined company would have too much market share, according to an agency official who asked not to be identified in accordance with internal policy. Dasa, which agreed to buy MD1 last year, has 15 days to respond to the recommendation before Cade decides whether to impose the order, the official said.
“The anti-trust process could take some time to be resolved and may postpone benefits from the integration of the two companies,” analysts at Banco Bradesco SA, including Rafael Frade, wrote in a note to clients yesterday. “Rumors related to this case could keep some pressure on the stock. Nonetheless, in terms of synergies, we believe that one of the main gains of this merger is related to possible renegotiations with medical suppliers, and this had already been done.”
Dasa, in a filing last night, said Araujo’s recommendation is a non-binding opinion and the company will have the opportunity to discuss the issue with Cade to reach a “positive conclusion.”
In a separate case in May, Araujo issued a report calling for restrictions on the takeover that created BRF Brasil Foods SA, Brazil’s biggest maker of TV dinners and frozen-meat products. Cade ultimately approved the deal earlier this month on the condition that the company stop using some brands and sell some assets to ensure domestic competition.
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