AmBev claims Coke trying to scuttle merger

Board decides not to delay decision on Brahma-Antarctica deal

Feb 11, 2000 - Two Brazilian companies that plan to merge into the world's third largest brewery went on the offensive Friday, accusing the Coca-cola Co. of trying to derail their deal.


Brahma and Antarctica announced the merger last summer that would create a new company, AmBev. A five-member board of the Conselho Administrativo de Defesa Economica (Cade) will reach a decision on the merger by April 3. The federal antitrust agency voted not to postpone deliberations on the merger, despite a Federal Police request to do so while it investigates alleged influence peddling surrounding the agency's deliberations.

The Federal Police last week asked the Justice Ministry to suspend deliberations about AmBev, which passed the decision onto Cade, an independent agency. The Federal Police are investigating an allegation, made by a source that has not been made public, that a Cade board member had been warned by a third-party of an attempt to influence the Cade board's vote on the AmBev merger. But Cade President Gesner Oliveira said that he knew of no Cade board member who had received a bribe offer.

Coca-Cola owns Kaiser, Brazil's No. 3 brewery. Kaiser has sought to prevent the formation of AmBev, arguing that AmBev's breweries would have a stranglehold on the beer market.

Marcel de Telles, who has been designated as a co-president of AmBev, told the New York Times that "Kaiser is trying to portray itself as David when it is in fact Goliath." Telles said that although Coca-Cola did not have a majority stake in Kaiser, it had effective control of the company because it distributes Kaiser's products through its Brazilian bottlers.

Coca-Cola officials downplayed accusations. "We're in the ready-to-drink nonalcoholic beverage market," said Marco Simoes, the director of communications at Coke's Brazilian subsidiary. "We're not beer sellers. We own a small stake of about 10 percent in Kaiser, that is all."

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