SAO PAULO, (Reuters) – The Technical Body of Brazilian Antitrust Watchdog Cade recommended approval for the purchase of Extrafarma pharmacy chain by Pague Menos. This was the statement made Monday.

The company stated that Extrafarma should sell around 3% in its stores as a recommendation from Cade’s technical committee. This will eliminate any competition concerns. Security filings stated that the Cade councillors must approve this agreement before September.

Luiz Novais, Pague Menos’ Chief Financial Officer, stated in an interview to Reuters that Extrafarma’s purchase, which will include more than 350 stores, after Cade’s divestiture, would accelerate Pague Menos’ growth.

Novais said, “The acquisition would equal three years’ organic growth,” noting that Pague Menos plans to open 120 stores by the end of this year.

Following Cade’s approval Pague Menos would pay 50% of 700 million Brazilian reais (138 million dollars) to Extrafarma owners Ultrapar Participacoes SA. Rest of the amount will be paid over two years. Novais stated that Pague Menos would pay the purchase with its cash flow.

($1 = 5.0776 reais)