Amount has not been disclosed; deal pending approval by antitrust regulator
01/07/2025
Ambev has decided to sell its juice brand Do Bem, acquired in 2016, to the Brazilian company Tial. According to Ambev, the agreement has been signed and is pending approval from the antitrust watchdog CADE. The amount involved in the deal has not been disclosed. It includes selling intellectual property rights and formula copies of Do Bem, which will continue to be marketed by Tial. Columnist Lauro Jardim from newspaper O Globo initially reported the news.
When acquired in 2016, the acquisition of Do Bem was part of Ambev’s strategy to expand its non-alcoholic beverage division. The company now says the sale will allow it to prioritize investments in other brands and business segments. “Over the past eight years, Do Bem has experienced significant innovations, reached more regions in Brazil, and expanded its presence to new points of sales,” Ambev noted in a statement. In the third quarter of 2024, the non-alcoholic beverage division represented 8.8% of Ambev’s total revenue.
One of Do Bem’s main competitors is Coca-Cola’s Del Valle. However, the sector is characterized by a variety of strong regional brands.
Tial, founded in 1986 in Visconde do Rio Branco (Minas Gerais), describes itself as a producer of ready-to-drink fruit-based beverages made with natural ingredients and no chemical additives. The company has an annual production capacity of 96 million liters. Currently, it offers 51 products, including nectars, 100% juices, other fruit-based beverages, and coconut water. In addition to domestic sales, the group exports to countries such as the United States, Japan, and Portugal.
Tial is owned by the food manufacturing group Pif Paf (through the holding company CRL Empreendimentos) and the investment fund Victoria Falls, which invests in various sectors such as mining, healthy foods, and administrative support services. The companies declined to comment on the deal.
Pif Paf considered going public in 2021 but now faces a complex financial situation, advancing with asset sales to reduce its leverage. The company has hired G5 Partners to develop a plan focused on debt reduction.
The request submitted by the companies to CADE requires that the deal be reviewed under a fast-track process, which applies to deals with minimal competitive harm and market concentration below 20%. In the filing submitted to the antitrust regulator, the companies indicated that the combined market share of the buyer and the target business “in all presented market scenarios was significantly below the 20% threshold,” based on data from Scanntech.
In markets such as coconut water, non-carbonated non-alcoholic beverages (like sodas), and ready-to-drink juices, the consolidated business holds a market share of less than 10%. According to the company, the low market share demonstrates that the concentration resulting from the deal would be “minimal and unlikely to raise competitive concerns.”
Zeca Berardo, a competition law expert and partner at Berardo Advogados, said the process is expected to proceed smoothly at the antitrust regulator. “It’s a major player in the beverage sector divesting a business line to a relatively small player. That should not raise any competition concerns,” he said, noting that other significant competitors in the sector, like Coca-Cola, continue to invest.
According to Mr. Berardo, CADE has taken less than 20 days to study cases like that. A third party can oppose the deal within 15 days, or for a council member to request a detailed review of the case—both scenarios are deemed unlikely by the expert.
By Cristian Favaro e Ana Luiza de Carvalho — São Paulo
Source: Valor International