Petroleo Brasileiro SA’s drive to raise $21bn with asset sales just hit another roadblock as an antitrust regulator who referred to the effort as “piecemeal privatisation” voted to block a 2016 deal.
While praising the Brazilian state-controlled oil giant’s divestment plan to cut debt, antitrust commissioner Cristiane Alkmin said a $820mn sale of the Liquigas propane-tank distribution unit to rival Cia. Ultragaz SA was not in the public interest. Following her arguments, the full commission voted to bar the deal last Wednesday.
“It breaks my heart, but this deal doesn’t bring any benefit for society,” she said during a session in Brasilia.
While Petrobras has been publicly traded in Sao Paulo and New York for decades, the government controls the company with a majority of voting shares, and relinquishing that control is anathema to most Brazilians. Calls for a full privatisation of the company created in the 1950s under the slogan “The Oil is Ours” has always been met with strong opposition.
Although the deal that was rejected wasn’t part of the asset sales the company is seeking to carry out this year, it sets a negative precedent, adding to several legal disputes the company has faced and marking another setback in the broader goal of focusing on its prime oil fields.
It’s not uncommon in Brazil for the antitrust regulator, known as Cade, to block deals long after two companies have agreed on them.
People walk next to the Petrobras headquarters (right) in Rio de Janeiro (file). While Petrobras has been publicly traded in Sao Paulo and New York for decades, the government controls the company with a majority of voting shares, and relinquishing that control is anathema to most Brazilians.
