The deal for Adevinta-Prosus owned OLX Brazil to purchase Brazilian portal group ZAP has been brought a step closer thanks to a favourable opinion released by the Brazilian authorities. Although the noises coming from the authorities this week are positive for OLX, a final decision is not expected for another 15 days as a statement from the company makes clear:
The Brazilian antitrust authority (Cade) published a favorable opinion in the Brazilian Official Gazette regarding the acquisition agreement for 100% of the shares of Grupo ZAP by OLX Brasil. This is still a preliminary opinion, which will turn into a final approval in case Cade’s Administrative Court does not request a further review of the transaction within 15 calendar days of the release. There are other conditions precedent before Closing can take place and, until then, both companies will continue to operate independent from each other.
The proposed deal will see OLX add to its already powerful offering in a large and ever-growing market and further entrench its market dominance with the ZAP portals VivaReal and Zap. The deal was agreed upon by the two parties back in March and had been pending an anti-competition ruling before this week’s announcement.
The deal is an interesting one not only because of the huge numbers involved (Grupo Zap’s valuation was $2.9 billion and between the classifieds sites there will be 12 million listings from 40,000 agents), but also because of the parties involved. OLX Brazil is a unique 50/50 joint venture between two of the largest players in the classifieds world: Prosus the classifieds division of Africa’s most valuable company Naspers, and Adevinta the offshoot company of Norwegian publishing powerhouse Schibsted.
Few other companies could have mustered the capital to pull off a deal which sees the two giants set up to benefit from total Brazilian market dominance for the foreseeable future.