Eldorado is controlled by the Batista family’s J&F, who claim the contract signed with Paper expired in 2018; courts have already recognized its validity
03/20/2025
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The Tribunal of the Administrative Council for Economic Defense (CADE) has narrowed the scope of the provisional remedy imposed by the antitrust watchdog’s General Superintendency, thus restoring certain shareholder rights to Paper Excellence in the pulp producer Eldorado, owned by J&F Investimentos.
In an ongoing legal battle, the members of the tribunal decided on Wednesday (19), by a vote of 6 to 1, that there were grounds to maintain the provisional remedy while limiting its reach: Paper Excellence is prohibited from vetoing any potential expansion project for Eldorado, a contentious issue in the legal dispute that has dragged on for more than six years.
Since last year, as Valor has reported, both J&F, the holding company owned by the Batista family, and Paper, owned by Indonesian businessman Jackson Wijaya, have been in talks with the Mato Grosso do Sul state government regarding the potential construction of a second production line for Eldorado or an independent facility in the state.
With estimated investments at R$25 billion, the expansion project for Eldorado has been in the pipeline for nearly a decade but was stalled due to shareholder disagreements. Both partners have publicly expressed interest in the expansion, although initially, Paper linked the project’s execution to taking control of the pulp producer by performing the purchase and sale agreement signed in 2017.
Valor found that no expansion project has been submitted to Eldorado’s board of directors so far to initiate the investment. People close to the company say Paper’s indication that it would veto the project has derailed the plan.
“Paper Excellence asserts that it has always supported the factory’s expansion. However, the company emphasizes that it has been demanding that J&F provide economic and financial feasibility studies, as is customary for major investments in the pulp sector,” Paper stated in a note on Wednesday (19).
Eldorado and J&F have not commented when reached for their input.
Through a provisional remedy in December, the antitrust regulator’s General Superintendency barred Paper from voting in general meetings and participating in company decisions after accepting a request from Eldorado, which accuses the minority shareholder of engaging in eight alleged anticompetitive practices.
Rapporteur Victor Fernandes stated in his vote that CADE is competent to analyze the dispute, even though it involves corporate aspects. According to Mr. Fernandes, corporate law is related to antitrust law, which examines the repercussions of business decisions.
He noted, that there is “jurisdictional complementarity” between the antitrust regulator’s analyses and those of the Securities and Exchange Commission of Brazil (CVM) concerning this dispute. The capital market regulator, he pointed out, has already recognized CADE’s competence to analyze the matter from an antitrust perspective.
He suggested that the provisional remedy should only apply to the veto rights that Paper holds over investments in Eldorado. According to the rapporteur, these powers could be hindering the company’s investments.
All political rights remain in effect, including the appointment of board members and other officials appointed pursuant to the bylaws. The rapporteur was joined by members Diogo Thomson, Camila Alves, José Levi, Gustavo Augusto, and President Alexandre Cordeiro.
“I believe that it is particularly fair and proportional to restrict the effects of the provisional remedy solely to the veto powers invoked by the appellant [Paper] in its warning expressions sent to Eldorado regarding the Expansion Project,” the rapporteur noted in his vote.
The only dissenting vote came from member Carlos Jaques. According to him, corporate rights could cause competitive harm to Eldorado. Therefore, he also opted to maintain the corporate restrictions in his vote.
Beyond the specific case’s effects, the antitrust community was watching the process to discern signals from the current CADE tribunal. This is the main case reviewed by the current CADE members—four of whom were appointed in 2023 during the Lula administration.
Additionally, companies and lawyers were monitoring whether a faction of the tribunal would have the strength to overturn or mitigate a provisional remedy imposed by the technical department.
The main uncertainty for the session was the vote of member José Levi. According to him, no competition issue in the case would justify overturning the provisional remedy entirely. “However, to form a majority with the rapporteur’s vote and for legal safety, I adhere to the rapporteur’s proposal for partial provision,” Mr. Levi explained in the vote that formed the majority.
The case had undergone several legal developments before reaching the antitrust watchdog’s Tribunal on Wednesday (19). In January, the Federal Regional Court of the 3rd Region (TRF-3) overturned the General Superintendency’s provisional remedy. It reinstated Paper’s corporate rights in the pulp producer until the antitrust regulator’s final judgment of the remedy, which occurred on Wednesday (19).
Eldorado is owned by J&F, the Batista family’s holding company, which argues that the purchase and sale contract signed with Paper in September 2017 expired in 2018—although the courts have recognized its validity. The Batista family is seeking to annul an arbitral award that ruled in Paper’s favor, ensuring the transfer of Eldorado’s control.
*By Guilherme Pimenta and Stella Fontes, Valor — Brasília
Source: Valor International