Argentina: objection reports detail threats to CNDC’s merger regulation

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In summary

Objection reports are issued by the National Commission for the Defence of Competition (CNDC) as a preliminary measure to highlight concerns regarding a potential merger’s effect on competition. This article discusses objection reports issued by the CNDC in some of the most significant proposed mergers in Argentina in recent years. It also analyses structural and behavioural remedies that the CNDC and the notifying parties have developed to resolve the risks highlighted in the objection reports.

Discussion points

  • Reasons for, and consequences of, objection reports
  • Market segmentation
  • Structural and behavioural remedies
  • CNDC and notifying parties working together to resolve competition risk

Referenced in this article


Inspired by the European Commission’s statement of objections, which the Commission issues to parties suspected of violating EU antitrust rules, Argentina introduced objection reports (OR) into competition law through Act No. 27,442 on the defence of competition (LDC), which came into effect in 2018.

In an OR, the competition agency gives a detailed description of its concerns regarding potential competitive risks that a particular merger may pose to existing market structures. The document formally outlines the troublesome features of a given transaction, enabling the competition authority and the notifying parties to effectively negotiate solutions to the identified risks.

Similar to the European statement of objections, the OR is intended as a preliminary step in the analysis and resolution of high-risk mergers, which is followed by a phase in which the notifying parties may comment on the preliminary conclusions reached by the agency and provide potential solutions to lessen or eliminate the highlighted problems.

The LDC mandates that every OR is made public; as well as the OR being issued to the notifying parties, it must be published on the competition agency’s website. ORs may only be issued to parties whose proposed mergers pose a potential risk to competition. In Argentina, an OR is neither confidential nor used in anticompetitive infringement cases.

In Americas Antitrust Review 2022,[1] we provided an in-depth analysis of the characteristics of an OR and examined their initial application by the National Commission for the Defence of Competition (CNDC). This article discusses the outcome of those procedures, as well as that of the Linde/Praxair merger, and outlines cases that the CNDC and the notifying parties are endeavouring to resolve together.

Authorised mergers following an OR

Although the issuance of an OR initiates the stage in which the notified parties have a legal right to discuss its preliminary findings, this phase commonly focuses on the remedies that would be likely to resolve the competition authority’s concerns. Below we discuss the outcome of several procedures in which ORs were issued.

Disney/Fox – exclusive TV broadcasting of sports events

On 5 November 2020, the CNDC issued an OR on the proposed acquisition of Twenty-First Century Fox, Inc by The Walt Disney Company.[2]

Although this transaction created overlaps in several communication and entertainment markets, the CNDC determined in its OR that the risks were particularly high in two relevant markets in Argentina: (i) the market for paid television sports networks; and (ii) the market for the distribution of films for exhibition in cinemas.

Concerns over the film distribution market were quickly addressed when Disney disclosed, shortly after the issuing of the OR, that it had ended an existing joint venture between local subsidiaries of Fox and Warner Bros for the distribution of films in cinemas.

In the market for paid television sports channels, after several months of negotiation, the CNDC opted to reject Disney’s proposed commitments, and it cleared the merger subject to compliance with a set of conditions that included both structural and behavioural measures.[3]

In this market, the merger combined the entities that held the exclusive licence to live broadcast the country’s most popular sporting events. Disney, through ESPN, held the television broadcasting rights to first division matches in the professional football league (Argentina’s most popular national tournament), while Fox, through FoxSports, controlled the television broadcasting rights to matches in the Copa Libertadores de América (Argentina’s most popular regional competition and the most prominent football competition in South America).

The CNDC proposed to set up a new player capable of competing with Disney in the production and commercialisation of television channels. It ordered the divestment of the broadcasting rights to certain events within Fox’s portfolio. These constituted the main international competitions within each sport, as measured by average ratings. As a result, the broadcasting rights for matches within the Copa Libertadores de América and the UEFA Champions League (one of the world’s most watched sporting events) were included in the divestiture order.

While the decision to require a divestiture was never in doubt, the feasibility of implementing a structural remedy in the short term raised concerns among CNDC staff. The outcome of this type of remedy in Brazil and Mexico was well known at the time; in both jurisdictions, the merger was unsuccessfully conditioned on the sale of assets related to live television broadcasting of sporting events.[4]

The structural remedy was supplemented with a set of behavioural conditions aimed at mitigating the effects of the merger until Disney could implement the divestment, on the one hand, and at mitigating the effects of Disney’s increased bargaining power with the cable operators, on the other hand.

Disney was specifically ordered to ‘make available’ the sporting events to be divested for non-exclusive, free and open broadcasting, for all free-to-air and paid television networks that required them, as well as to ‘make available’ for broadcasting – under the same conditions – two first division professional football league matches, including one involving River Plate or Boca Juniors (the clubs with the largest attendance and audience figures in local football).

Regardless of the implementation of the structural remedy, and for five years, the CNDC imposed specific terms concerning the commercialisation and packaging of channels, which minimised portfolio effects. The CNDC also prohibited the merged entity from imposing contractual conditions on cable operators, including minimum resale prices, minimum subscriber quantities, penetration percentages and subscriber numbers.

One month after the merger authorisation was issued under the conditions described above, Disney informed the CNDC that it had entered into a preliminary agreement with the Spanish group MediaPro for the sale of the rights and assets outlined in the divestiture order.

After determining that the prospective acquirer fulfilled the divestiture order’s qualifications and requiring the initial agreement to be modified to fully comply with the order’s overarching goals, the CNDC concluded that Disney had successfully complied with the structural remedy.

It should be noted that Disney chose to litigate against certain behavioural conditions outlined in the divestiture order. In May 2022, the court reviewing the order rejected in its entirety both the injunction by which Disney sought to obtain the order’s suspension and the request to permanently annul the behavioural conditions.

Syngenta/Nidera – seed research, development and trading

The purchase of COFCO Corporation’s seed division by Syngenta Group Co, Ltd prompted the CNDC to issue an OR on 29 April 2021.[5]

In Argentina, Syngenta’s subsidiaries were important players in the market for the research and development (R&D), production and trading of seeds – particularly in the sunflower seeds market, in which Syngenta had the largest market share.

The transaction involved Nidera Seeds Argentina SAU also becoming a subsidiary of the Syngenta Group in Argentina. The combined participation of Syngenta and Nidera in the R&D, trading and production of sunflower seeds would represent more than 60 per cent of the market.

Given the OR’s diagnosis, and unlike the situation in Disney/Fox, Syngenta offered a divestment proposal that the CNDC understood would eliminate the identified risks, and whose implementation would preserve an adequate supply structure in the relevant market.[6]

Syngenta’s commitment – accepted by the CNDC – consisted of a structural remedy through the sale of the following package of Nidera’s assets concerning the research, production and commercialisation of sunflower seeds:

  • Nidera’s genebank;
  • germplasm-related know-how;[7]
  • germplasm-related intellectual property rights;
  • the Super Paraíso registered trademark and the Aromo trademark; and
  • Nidera’s inventory of sunflower seeds that were ready for commercialisation at the transaction’s closing.

Before obtaining the CNDC’s clearance, Syngenta transferred the assets to Nuseed Semillas, a subsidiary of Nufarm Limited, an Australian firm with a modest presence in the sunflower seed business in Argentina, that the agency recognised as having the potential to become a vigorous and effective competitor following the divestiture.

Mirgor/Brightstar – manufacture and sale of mobile phones

On 15 June 2021, the CNDC issued an OR in connection with the purchase of Brightstar Corporation’s local subsidiaries (Brightstar Argentina) by the Argentine business conglomerate Mirgor SACIFIA.[8]

The CNDC considered the transaction to be problematic for the markets for mobile phone manufacturing and sales in Argentina.

Mirgor is a leading manufacturer of Samsung mobile phones under the promotional tax regime of the Province of Tierra del Fuego;[9] Brightstar Argentina manufactures Samsung and LG mobile phones.

With the acquisition of Brightstar Argentina, Mirgor would consolidate its position as the leading mobile phone manufacturer, with 57 per cent of mobile phone production and marketing – accumulating half of the production capacity authorised by the promotional tax regime – and as the supplier of almost 100 per cent of Samsung mobile phones in Argentina.

The OR also indicated that the number of companies in the mobile phone manufacturing and selling sector would decrease from three to two, potentially diminishing the only remaining competitor’s determination to compete with the merged entity.

Another source of concern raised by the transaction was Mirgor’s ability to engage in exclusionary vertical behaviour because of the integration of its production and retail sale network of Samsung gadgets via its subsidiary GMRA SA. This integration may incentivise Mirgor to use anticompetitive profit-enhancing practices, therefore unlawfully favouring GMRA’s retail position.

Following the issuance of the OR, Mirgor and the CNDC began to discuss measures to eliminate or minimise the identified hazards. Mirgor formally offered the agency a series of behavioural commitments, including assurances not to discriminate – in terms of pricing or other market conditions – between GMRA and the rest of the market, and not to refuse to sell mobile phones to wholesale clients (mobile phone companies and other large retailers).

However, the CNDC concluded that Mirgor’s commitments were insufficient to minimise the risks indicated in the OR, particularly regarding a possible margin squeeze against GMRA’s rivals.[10]

As a result, similar to Disney/Fox, the CNDC chose to reject the commitment and conditioned the transaction’s approval on the fulfilment of certain behavioural requirements, including the following commitments:

  • to sell mobile phones to carriers and retailers under non-discriminatory market conditions in relation to GMRA;
  • not to subject or limit the sale of mobile phones to the acquisition of other products;
  • not to unreasonably deny the sale of products;
  • not to reduce margins in the retail segment as a result of an increase in wholesale prices;
  • to guarantee the maintenance and development of the human and productive resources incorporated as a result of the acquisition;
  • to report the monthly wholesale prices charged by Mirgor to mobile phone retailers;
  • to report the monthly retail prices charged by GMRA;
  • to report any new contracts with national or international mobile phone brands;
  • to prepare a competition compliance programme for all Mirgor (and subsidiary) managers and directors; and
  • to inform clients and the general public of the conditions imposed.

The remedy stipulates that the behavioural obligations have a five-year term and that the obligations aimed at neutralising the risk of exclusionary practices in the retail segment could be replaced by divestment in all retail assets.

Linde/Praxair – industrial and medicinal gases

The formation of Linde PLC, resulting from the merger of Germany’s Linde AG and US-based Praxair Inc, led the CNDC to issue an OR on 30 September 2021.[11]

Linde and Praxair have a global operating network dedicated to the production and delivery of industrial and medicinal gases. Both firms operate in Argentina, producing and selling medical gases, industrial gases, specialised gases, helium supplies and home respiratory care services.

Except for a few niche sectors, the majority of medicinal, industrial and speciality gases in Argentina are supplied by four subsidiaries of multinational corporations. Linde and Praxair are two of these subsidiaries.

The transaction has a major effect on the markets for oxygen (medical and industrial), carbon dioxide, nitrogen, argon, acetylene, hydrogen and nitrous oxide. Helium retail and home respiratory care services are also impacted.

According to the CNDC analysis, in 22 of the 33 markets for medicinal and industrial gases, the companies capable of producing and distributing gases with national reach would be reduced from four to three in some markets, from three to two in other markets, and, in some markets, only the consolidated Linde/Praxair business unit would be present. Furthermore, Linde/Praxair would have a market share of more than 55 per cent in several of these sectors, including in bulk medical oxygen and bulk nitrogen.

Apart from the supplies being critical for public health, with almost zero substitutability and high entry barriers (both economic and regulatory), the supply in certain markets would be highly concentrated, in some cases resulting in Linde/Praxair having a dominant position. The new scenario could also pose risks to markets with vertical relationships – for example, the supply of medicinal oxygen for the provision of home respiratory services – as the transaction could create incentives for Linde/Praxair to close the upstream market for the gas that functions as an input to its competitors in the downstream services market.

In addition, the CNDC analysed that the operation would make movements in the gas markets more visible and more transparent, which could reduce the cost of monitoring a concerted practice and could optimise the execution of a collusive agreement among the remaining competitors.

Following the release of the OR, the CNDC and the merged company began discussing possible remedies to neutralise the risks identified. The CNDC deemed the commitments offered by the company as insufficient and imposed conditional clearance to the transaction involving structural and behavioural remedies.

To bring back the level of competition that existed before the merger, the structural remedies included divesting assets in the oxygen business unit to allow the emergence of a new competitor with a 9.5 per cent market share.

The asset package to be sold was to include the following:

  • a contract guaranteeing the supply of 75 tonnes of liquid oxygen per day at production cost for a minimum of five years, with options for two five-year renewals;
  • the sale of three oxygen plants and two tanker transportation trucks; and
  • the transfer of oxygen supply contracts with hospitals to companies in different parts of the country.

Among other behavioural measures, the CNDC will monitor the effective competition in the markets for oxygen, nitrogen and special gases. The merged company must therefore regularly submit sales data to the CNDC. Furthermore, the merged company may not refuse to sell to, or unfairly discriminate against, other companies.

The conditional clearance also mandates the appointment of a selling and monitoring agent to handle the divestiture process.

ORs issued since late 2021

Since October 2021, the CNDC has issued ORs in the following three transactions.

Arcor/Ingredion – food and beverage ingredients

The incorporation of Ingrear Holding SA, a joint venture comprising the manufacturing and sale of food and beverage ingredients by US-based Ingredion Incorporated and Argentina-based Grupo Arcor, prompted the CNDC to issue an OR on 21 March 2022.[12]

Arcor is a conglomerate with three business divisions: consumer foods (chocolate, cookies and crackers, confectionary, ice cream and food products), agribusiness and packaging. Ingredion focuses on the production of ingredients – mainly starch, modified starches and starch sugars such as glucose syrup and high fructose syrup.

The transaction resulted from the transfer to Ingrear of both companies’ production and ingredient operations and assets; particularly those involved in the wet milling of corn and its derivatives, which are used in the food, beverage, paper and pharmaceutical industries.

The creation of Ingrear entails the disappearance of an independent player in the market and results in a significant increase in concentration in the corn wet-milling processing market, as well as in the production and sale of corn by-products.

Once the transaction has completed, Ingrear will be the market leader, with 76 per cent of Argentina’s corn wet-milling processing capacity. With two plants in the province of Buenos Aires, Ingredion holds 48 per cent of Argentina’s processing capacity, while Arcor accounts for 28 per cent. The remaining processing capacity is split between Glutal SA and Glucovil Argentina SA.

In terms of the sale of corn wet-milling by-products, Ingrear’s shares will exceed 65 per cent in three categories: sweeteners (80 per cent), starches (59 per cent) and other by-products (67 per cent).

The CNDC concluded that Ingrear’s competitors, Glucovil and Glutal, would not represent a credible threat to the exercise of market power by the merged company due to their insufficient wet-milling capacity and market shares in the sale of derivatives.

In addition, the transaction creates vertical risks. Arcor is a relevant player in both the packaging and food industries, which Ingrear’s products feed into. The deal has the potential to allow the practice of exclusionary conduct towards Arcor’s competitors in downstream industries, such as increased barriers to entry, increased costs or market foreclosure.

In this situation, as in the Mirgor/Brightstar merger, the CNDC opted to issue an interim measure together with the OR to halt the transaction’s closing.

As stated in Section 44 of the LDC, these types of measures are intended to avoid or mitigate harm to the competitive landscape. In this regard, the CNDC decision asserts that Arcor and Ingredion must maintain their business divisions separately until a final solution to the deal’s risks is reached. The interim measure, according to the CNDC, is ‘sufficiently adequate to avoid further harm to competition’.[13]

At the time of writing, the CNDC is assessing structural and behavioural remedies for neutralising the risks identified in the OR.

Natura/Avon – cosmetics and personal care

The incorporation of Natura Holding SA (Natura/Avon), resulting from the merger between Brazilian-based Natura Cosméticos SA and US-based Avon Products, Inc, led the CNDC to issue an OR on 7 June 2022.[14]

Both firms’ activities in Argentina are mainly centred on the sale of beauty and personal care items via direct sales or catalogues through resellers.

Based on the analysis outlined in the OR, the CNDC preliminarily concluded that the transaction may generate risks in several segments of the beauty and personal care products market, particularly in the colour cosmetics market and the mass fragrance market.

In the colour cosmetics market, Natura/Avon would have an average market share of 40 per cent; the CNDC also segmented the colour cosmetics market into face, eyes and lips sub-markets, and, in all of them, the consolidated unit would enjoy a market share of around 40 per cent. In the mass fragrance market, the combined entity’s market share would be 53.7 per cent.

These two market segments are the companies’ most lucrative in terms of revenue. Almost 55 per cent of Natura’s total sales were concentrated in the fragrances and colour cosmetics markets. Both categories accounted for 44.35 per cent of Avon’s total sales. In these segments, both companies have significantly higher market shares than their rivals.

Direct or door-to-door sales are the primary distribution channel for the products in the Natura/Avon portfolio, with sales made through resellers (ie, outside the traditional or modern channel). Natura/Avon’s share of the direct sales channel ranges from 70 per cent to 83 per cent, depending on the particular market segment. The CNDC analysed that, considering the degree of concentration in the colour cosmetics and mass fragrance markets in general, and based on the specific relevance of both companies in door-to-door sales, in the absence of challenging competitors, there could be distorting effects on competition in these markets.

As for barriers to entry, in both markets obstacles and difficulties were identified for the development of potential competitors; these are related to advertising and brand positioning expenses and the development of the reseller network necessary for an adequate distribution of products.

At the time of writing, the CNDC and Natura/Avon are examining remedies to reduce the risks identified in the OR.

Natura/Avon has stated that, because of the transaction, it plans to make investments in Argentina to increase local production of products, replacing imports that currently account for 70 per cent of products sold in the country, reducing transportation costs and generating direct and indirect employment in Argentina.

Given these statements, in the OR, the CNDC stated that many of the projections on variables such as local investment, increase in manufacturing capacity, import substitution, development of local suppliers, foreign currency savings and increase in employment, could result in benefits for the general economic interest.

However, although the OR did not rule out the fact that the transaction may result in these benefits, it did warn that these will be considered by the agency to the extent that they are credible and quantifiable, and together with specific remedies designed to mitigate the risks to competition identified in the OR.

Discovery/Warner – TV channels

An OR was issued on 5 August 2022 following the merger of Discovery, Inc and WarnerMedia, LLC (Warner Bros Discovery, Inc (Warner/Discovery)).[15]

Discovery is a global media company incorporated in the United States and is present in more than 220 countries. In Argentina, it mainly produces and sells pay-TV channels and markets its video-on-demand (VOD) platform.

WarnerMedia was part of AT&T’s media conglomerate. In Argentina, it produces and licenses audiovisual content, produces and sells pay-TV networks (basic and premium) and sells its VOD platform.

The CNDC determined in its preliminary research that the deal creates risks in the markets for the production and wholesale distribution of pay-TV networks, particularly concerning children’s programming, film and TV series, and non-fiction entertainment.

In terms of children’s channels, Warner/Discovery’s share would be approximately 50 per cent, according to 2021 data, with the company owning four of the nine channels on the market (the share was calculated based on the channels’ ratings). Within film and TV series channels, Warner/Discovery’s share would be approximately 39 per cent, and, in non-fiction entertainment channels, the combined entity’s share would also be approximately 49 per cent.

In addition, given the large number, diversity and preponderance of networks marketed by Warner/Discovery – both basic and premium – there are potential portfolio effects arising from the implementation of the transaction.

Warner/Discovery effectively sells many different pay-TV channels – not just those described above – to cable operators.

Before the transaction’s closing, according to 2021 data, Discovery marketed 13 channels, six of which sit within the non-fiction entertainment segment (43 per cent of the market measured by ratings), three belong to the ‘lifestyle’ segment and the remaining four channels comprise the following types of programming: children’s TV, sports, variety and general interest, and film and TV series.

WarnerMedia marketed 16 basic channels comprising a wide variety of subjects: film and TV series, children, non-fiction entertainment, lifestyle, music and news. In terms of market share, it holds significant positions in the film and TV series segment and in the children’s category, where its market shares are approximately 33 per cent and 29 per cent, respectively. Its portfolio is completed by eight premium networks in the film and TV series category, as well as another premium channel in the sports genre (TNT Sports), which live broadcasts 50 per cent of the national football competition’s first division matches, which are of considerable interest to the local audience.

As mentioned in the Disney/Fox merger discussion above, this latter point is especially important considering limited substitutability. The TNT Sports channel may be considered irreplaceable for any retail distributor of pay-TV channels if the content is considered essential to the preservation or growth of its competitiveness.

All these factors, as the OR concludes, ensure Warner/Discovery a significant increase in its bargaining power and give it the ability to develop different types of portfolio or conglomerate strategies (eg, bundled selling) that could potentially distort competition in the expanded pay-TV channels market.

Another source of concern stemming from the merger is the incentive to limit the distribution of its content on other pay-TV channels to steer people to Warner/Discovery’s over-the-top platforms.

In this case, and as in Mirgor/Brightstar and Arcor/Ingredion mergers, as well as issuing an OR, the CNDC issued an interim measure to stop the implementation of the deal.

The measures stipulate that, until a definitive solution to the risks posed by the transaction is reached between the CNDC and the notifying parties, Discovery’s and Warner’s business units in Argentina must continue to operate independently, and therefore the sale of the portfolio of networks analysed in the OR must continue to be carried out separately.

At the time of writing, the CNDC and Warner/Discovery are examining structural and behavioural measures to reduce the risks identified in the OR.

Final remarks

As discussed above, an OR details the competition agency’s concerns about potential competitive risks to market structures associated with a specific merger, allowing the competition authority and the notifying parties to effectively discuss solutions to the highlighted risks. ORs have also evolved to include and justify interim measures that aim to halt the execution of a transaction, which, in post-closing control regimes, are deemed necessary to avoid or minimise the harm that a transaction may cause to competition.

The CNDC is beginning to build expertise in the assessment and resolution of merger control procedures by means of ORs. In this article, we have delved into the outcomes of various merger control processes where an OR was issued. The balance is certainly positive.


[3] The National Commission for the Defence of Competition (CNDC) issued conditional clearance on 23 December 2021,

[4] Given the inability to find a buyer for Fox Sports Brazil’s assets, Brazil’s competition authority, the Administrative Council for Economic Defence, decided to abandon its initial position and only conditioned the transaction on compliance with behavioural remedies. In the Mexican case, more than two years passed between the Federal Telecommunication Institute’s order for Fox Sports Mexico’s divestiture and the actual asset sale. The sale of the Mexican networks had not been completed when the divestment order was announced in Argentina.

[6] The CNDC’s final decision was issued on 31 October 2022,

[7] Germplasm relates to genetic material, particularly its specific molecular and chemical constitution, that comprises the physical basis of the inherited qualities of an organism.

[9] The industrial promotion regime for Tierra del Fuego and South Atlantic Islands was established by Act No. 19,640 in 1972. This law, together with its implementing regulation, established a special regime of tax benefits and customs for the territory to encourage population and employment growth in a region that was distant and isolated from the rest of the country but of critical strategic significance. The law established a set of benefits intended to reduce the cost of living in the territory and a subset of economic incentives associated with the ‘industrial sub-regime’, which continues to regulate the entry of products manufactured in the province into the continental territory. The key incentives for companies under the regime are VAT credits for sales to the rest of the country and a tariff and VAT exemption (of up to 80 per cent) on products imported into the territory.

[10] The CNDC’s conditional clearance was issued on 6 December 2021,

[13] id., at paragraphs 103–16.

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