Mexico City, April 12th, 2021.
On April 8, 2021, the Federal Economic Competition Commission (the “Commission”) updated the Merger Notification Guidelines (the «Guidelines») which were published in the Federal Official Gazette, which contains amendments to the first version published in 2015.
The Guidelines are intended to be a tool for economic agents who intend to notify a concentration and this update analyzes and addresses certain concerns that agents had with respect to the concentration notice procedure.
The updates to the Guidelines include:
i) Analysis of collaboration agreements between economic agents or Joint Ventures: a specific section on this type of agreements is added, which recognizes that, due to their legal nature and characteristics, such agreements may be considered as concentration in terms of article 61 of the Federal Economic Competition Law. Likewise, criteria for their analysis are specified and different types of collaboration agreements are described.
ii) Elements related to the monetary threshold calculation to carry out a notification: in this section, the Commission clarifies that transactions that only involve assets or companies in Mexico, the amount must consider the taxes incurred, such as the value added tax; it also issues rules on the accumulation of assets and capital stock when several buyers and sellers are involved.
iii) Multiplicity of sellers and acquirers in the notification of a concentration: the Guidelines provide that transactions derived from public offerings and involving the participation of several sellers, COFECE will consider the possibility that only the potential buyer submits the notification; likewise, in case of concurrence of multiple economic agents as shareholders of the seller or the target, the notification may be carried out by controlling shareholders, provided they demonstrate the legal impossibility by which not all involved parties can appear.
iv) Companies with precarious economic situation: The updated Guidelines recommend the type of documents that these companies may submit to demonstrate their economic deterioration and the potential risk of their exit from the market in the immediate future or that there are no solutions other than the one presented in the notification. These documents may include, for example, financial analyses, presentations to investors, etc.
v) Prior transactions not notified: a section is added describing how COFECE will treat transactions that were not notified for analysis and approval.
Our Antitrust team is at your service to answer any questions regarding this document.
S I N C E R E L Y,