The transaction is also subject to approval by Brazil’s telecommunications regulator Anatel.
Brazil’s competition authority is reviewing a proposed transaction under which Brasil Tecpar Serviços de Telecomunicações would acquire fiber broadband, wholesale network infrastructure and data center assets currently operated by Ligga Telecomunicações.
According to the full-form notification filed with the Administrative Council for Economic Defense (CADE), the transaction involves the acquisition by Brasil Tecpar of 100 percent of the shares in a newly created company, to be formed by Ligga Telecomunicações and BP Participações.
The new company will hold all assets, rights, contracts, employees and licenses required for the provision of fiber‑based fixed broadband services (SCM), the wholesale supply of telecommunications network infrastructure and the operation of data centers, as currently carried out by Ligga.
The filing emphasizes that the deal excludes Ligga’s other telecom activities, such as fixed‑line telephony (STFC) and mobile services (SMP). Only the fiber broadband, wholesale infrastructure and data center businesses will be transferred to the new company and subsequently acquired by Brasil Tecpar.
The parties present the transaction as a strategic expansion move for Brasil Tecpar, allowing it to strengthen its presence in Paraná — Ligga’s main state of operation — and to increase operational density and network efficiency. For Ligga and BP Participações, the deal is framed as a divestment of non‑core assets that provides immediate cash inflow and significant deleveraging.
The notification acknowledges horizontal overlaps between the parties in three markets: fixed broadband services (SCM), wholesale supply of telecommunications network infrastructure and data center services.
Horizontal overlaps in SCM arise in 259 municipalities nationwide, most of them in Paraná. In 30 municipalities, the parties’ combined market share exceeds 20 percent, and in three municipalities — Irati, Fernandes Pinheiro and Rio Branco do Sul — the increase in market concentration, measured by the Herfindahl‑Hirschman Index, exceeds 200 points. An HHI increase of more than 200 points typically triggers antitrust concerns.
In Irati, the combined market share reaches 48.87 percent, with an estimated HHI increase of 857 points. In Fernandes Pinheiro, the combined share is 51.57 percent with an HHI increase of 324 points, but Ligga accounts for just 16 instances of fixed broadband internet access (3.35 percent). In Rio Branco do Sul, the combined share is 29.07 percent, with a reported HHI increase of 293 points.
The filing argues that even in those municipalities the transaction does not raise competitive concerns, citing factors such as moderate combined shares, small absolute numbers of affected instances of internet access and, in some cases, distortions in reported data.
The companies also present potential vertical overlaps between upstream wholesale infrastructure activities and downstream retail or service markets. The notification identifies five theoretical vertical links, involving wholesale network infrastructure upstream and downstream markets for SCM and data centers, as well as a limited relationship between fixed telephony and broadband services.
On the downstream side, the filing states that Ligga holds SCM market shares of 30 percent or more in only three municipalities: Antonina, Matinhos and Santa Terezinha de Itaipu, all in Paraná. In those locations, the parties argue that Brasil Tecpar’s wholesale infrastructure presence is limited, meaning that the combined group would have neither the ability nor the incentive to foreclose rival broadband providers or restrict access to essential inputs.
On the upstream vertical side, Brasil Tecpar is reported to hold shares of 30 percent or more in the wholesale supply of telecommunications network infrastructure in a number of municipalities in Paraná, including Piên, Quitandinha, Paula Freitas, Itaperuçu, Rio Negro, Fernandes Pinheiro, Mandirituba, Irati and Agudos do Sul. In these locations, Ligga’s downstream presence in SCM is described as marginal, often below 1 percent of accesses and, at most, 3.35 percent in a single municipality. The parties argue that such limited downstream activity rules out any meaningful vertical foreclosure effects.
Regarding data centers, the filing identifies vertical links in principle but estimates that the parties’ combined national market share remains below 10 percent. Given the presence of numerous competitors and CADE precedent treating data center services as a national, unconcentrated market, the parties contend that no competition concerns arise.
The notification also addresses a potential vertical overlap between Brasil Tecpar’s limited fixed‑line telephony activities and Ligga’s broadband operations. The parties argue that STFC is a structurally declining market with very small absolute numbers of instances of internet access in the affected municipalities, and that the overlap does not give rise to foreclosure risks.
According to the companies, the relevant markets are characterized by low barriers to entry, strong competitive rivalry, rapid expansion and sector‑specific regulation mandating network sharing and open access. They point to the growing role of regional providers and the availability of alternative infrastructure suppliers as further safeguards against anticompetitive effects.
The transaction is also subject to approval by Brazil’s telecommunications regulator Anatel.
The review was filed under full-form procedure on March 30, setting up a Nov. 25 expiration of CADE’s 240-day deadline to analyze the deal.
Source: MLex
