Localiza, Unidas one step closer to merger in Brazil

Brazil's antitrust agency Cade has published a legal opinion which recommends the merger of the country’s two largest car rental and leasing agencies, Localiza and Unidas. 

The opinion comes one year after the two companies first announced their plan in September 2020. They operate in three areas, being rent-a-car, third party corporate vehicle leasing, and used car sales. 

The merger, however, would result in a rent-a-car market concentration of approximately 70% in the country, considering that international rental agencies Vanguard, Enterprise, National, and Alamos would also pertain to the same group, 
 
Owing to the risk of competitive environment, the court of Cade has yet to evaluate the matter, a process which could be finalized by January 2022. 
 
Considering a merger, the closest rent-a-car competitor today would be Movida, ranked with the third largest overall fleet in the country. Depending on the opinion of the court, approval could be contingent on relinquishing some of the group's car rental business, most of which pertain to Localiza.  

The merger whould result in a fleet of some 490,000 vehicles (336,000 Rent-a-Car and 154,000 Corporate). Movida has approximately 110,000 cars. (73,000 Rent-a-Car and 37,000 Corporate).