When Does a Foreign-to-Foreign Deal Trigger a Brazilian Filing? CADE Draws the Line

Background

Brazilian merger control has no express de minimis exception for foreign-to-foreign transactions. In 2026, CADE tested – and ultimately rejected – an attempt to create one through case interpretation. Over a series of foreign-to-foreign filings, CADE's General Superintendence (SG) began treating transactions as non-reportable where the foreign target generated less than BRL 75 million in Brazil even though the parties' economic groups met the statutory turnover thresholds. The approach started with a single SG decision and was then applied to further cases, prompting discussion and controversy among practitioners before CADE's Tribunal ultimately reversed it. The ruling therefore reaffirms a broad and conservative filing standard under the current framework, while foreshadowing a broader revision of CADE’s merger control rules.

Under Brazilian law, a transaction is reportable to CADE when three cumulative criteria are met: (i) it must constitute a “concentration” under Article 90 of Law No. 12,529/2011; (ii) the economic groups involved must meet the turnover thresholds under Article 88, currently BRL 750 million for one group and BRL 75 million for another; and (iii) it must produce, or be capable of producing, effects in Brazil under Article 2 (local nexus). The controversy in this case centred on the second and third requirements.

The effects in Brazil under Article 2 (nexus) requirement has no strict statutory definition, is generally interpreted broadly and usually presumed to be met where a transaction directly or indirectly involves a company that: (i) is incorporated or headquartered, or has offices, in Brazil; (ii) has local assets; (iii) regularly sells to customers located in Brazil; (iv) operates in a market that includes Brazilian territory; or (v) has concrete or express plans to operate in Brazil.

The SG’s decisional practice is not necessarily uniform with respect to the future-plans criterion. In Chevron/Petrobras Americas (Case No. 08700.001008/2019-26), the SG reviewed the transaction in part because the parties had not ruled out future exports to Brazil. In Denso/Aisin/Jtekt (Case No. 08700.000686/2019-71), by contrast, it declined to review a joint venture even though the parties did not entirely exclude the possibility that its products would reach Brazil within five years. Read side by side, the two decisions point in opposite directions on essentially the same question.

Against this backdrop of an open-textured statutory test and an uneven body of precedent, the SG's initiative can be read as an attempt to bring some objectivity to the effects analysis, replacing a case-by-case judgment on indirect effects with a clear turnover figure tied to the target. That attempt is what CADE's Tribunal was ultimately called upon to review.

The Transaction

The transaction that prompted the most recent developments consisted of Lin Yin International Investments, a Foxconn subsidiary, acquiring a 50% stake in Mitsubishi Fuso Bus Manufacturing (Case No. 08700.003063/2026-80). Both economic groups exceeded the statutory turnover thresholds. The target, however, was located outside Brazil and recorded less than BRL 75 million in Brazilian turnover. In May 2026, the SG found that the transaction was not reportable, effectively proposing a de minimis filter on the ground that the transaction lacked a material economic-territorial nexus with the Brazilian market. The case was later called up for review, and on 1 July 2026, CADE’s Tribunal unanimously reversed the decision.

The Filter Proposed by the General Superintendence

In finding that the transaction was not subject to mandatory review, the SG supplemented the group-level turnover thresholds with an additional criteria criterion – or de minimis filter – based on the target’s standalone turnover. It reasoned that, because the target was located abroad and generated limited turnover in Brazil, the transaction lacked a material economic-territorial nexus with the Brazilian market. This reasoning is broadly aligned with international standards, including OECD and ICN recommended practices, which advocate a material-nexus test in cross-border merger review. From a practical standpoint, the approach is welcome: it reduces filing burdens for transactions with no meaningful local footprint and allows CADE to focus its resources on cases with genuine competitive effects in Brazil.

Following the decision, the SG applied the same position and reasoning to similar transactions for several weeks.

The Tribunal’s Decision

On 1 July 2026, CADE’s Tribunal unanimously reversed the SG’s decision and reaffirmed that, under the current wording of the Brazilian Competition Law and CADE Resolution No. 33/2022, the turnover thresholds must be assessed by reference to the economic groups involved, rather than the target’s standalone turnover. The Tribunal signalled that transactions remain subject to mandatory filing whenever the economic groups involved meet the statutory thresholds, even if the target alone does not generate significant turnover in Brazil.

The decision also delineated the scope of the SG’s authority. It recognised the legitimacy of the objective of reducing filings with a limited local nexus, but made clear that filters of this nature must be created through rulemaking, rather than through administrative interpretation in individual cases. The holding was grounded in legal certainty: notification criteria determine which transactions must be filed in Brazil, and a change of that magnitude should not result from the SG’s interpretation in individual cases, as this would leave parties without a stable basis for assessing their filing obligations. The Tribunal also indicated that transactions the SG had declined to review during that period would not be reopened or called up for review. Some of those decisions have already become final. Going forward, however, both the SG and companies should follow the Tribunal’s ruling.

In this ruling, CADE’s Tribunal also clarified the authority’s interpretation of the local-nexus requirement by examining whether the parties had plans to sell or export to Brazil within the next five years.

With respect to local effects, the Tribunal reaffirmed its broad approach. The applicants had stated in the filing form that the target could sell and supply buses in Brazil within the next five years. The Tribunal treated that statement as sufficient to satisfy the local-nexus requirement. That conclusion was reached even without present sales, exports or local assets to support it. As the Reporting Commissioner put it, the effect may be small, but it exists.

Practical Implications

The Tribunal signalled that, under the current wording of the Brazilian Competition Law and CADE Resolution No. 33/2022, transactions remain subject to mandatory filing whenever the economic groups involved meet the statutory thresholds, even if the target alone did not register significant turnover in Brazil.

The decision also signals how CADE is likely to assess a transaction’s effects in Brazil. By holding that the stated intention to supply buses to Brazil within the next five years itself constitutes a relevant effect, the Tribunal adopted a broad interpretation of Article 2 of Law No. 12,529/2011. In practice, plans for future entry into the Brazilian market – even in the absence of current local turnover – will tend to weigh in favour of filing, warranting heightened caution when assessing transactions with a forward-looking component.

Finally, the decision delineates the scope of the SG’s authority. According to the Tribunal, a filter of this kind could not be adopted by the SG alone and would require amendments to the applicable rules. For the market, this means that any relief from filing obligations for cross-border transactions will depend on the revision of CADE Resolution No. 33/2022.

The SG and the Tribunal have both signalled that this review is under way. CADE Resolution No. 33/2022 governs merger filing thresholds and the applicable review procedures, and its revision is likely to address not only the issue highlighted by this case, but also other topics. Once the internal stage is complete, CADE will submit the proposed amendments to public consultation, which is expected in the coming months.

Conclusion

Under the current legal framework, transactions remain subject to mandatory filing whenever the economic groups involved meet the statutory turnover thresholds, even if the target alone does not generate significant turnover in Brazil. Although CADE’s Tribunal acknowledged that the SG had identified relevant policy concerns that may merit attention, it ultimately held that filters of this nature must be created through rulemaking. Until then, the prudent assumption when assessing any cross-border transaction with a Brazilian nexus is that the group-level turnover thresholds govern and that a plan to enter the Brazilian market may be sufficient to establish CADE’s jurisdiction.