Brazil's antitrust regulator is likely to impose temporary restrictions to the takeover of food maker Sadia by rival Perdigao to ensure both companies operate separately until a final ruling is made, a local newspaper reported on Tuesday.
The Brasilia-based agency, known as Cade, will ban the companies from merging their distribution units, cutting jobs and reducing brands and factories until its final ruling on the combination is unveiled, Valor Economico reported, without saying how it obtained the information.
Cade will allow Perdigao to sell shares on behalf of Brasil Foods, as the combined company will be called, so long as it informs potential shareholders there is a risk the deal may crumble, Valor said.
Cade's goal is to keep the combination in stand-by so regulators can still impose restrictions, Valor said. The preliminary accord is being drafted by Cade and company lawyers and may be announced this week, according to Valor.
With the decision, Cade hopes to remove the perception among investors that mergers and acquisitions face little regulatory scrutiny in Brazil, Valor said, adding the agency is currently working on a reform of antitrust laws. (Reporting by Guillermo Parra-Bernal, editing by Maureen Bavdek)