MEXICO Law and Practice Contributed by: Christian Lippert, Carlos Chávez, Juan Carlos Burgos and Édgar Martín, Galicia Abogados
to which the CNA has taken the position that if capital commitments exceed filing thresholds, such ventures may be reportable, and joint marketing agreements, which according to the CNA may be reportable if the parties to such an arrangement undertake to fund and
total assets or capital stock of an economic agent whose total assets or sales in Mexico are in excess of 16 million times the UMA (MXN1,876,960,000, or approximately USD108,182,000); and • The transaction (or series of transactions) results in the acquisition in Mexico of assets or capital stock in excess of 7.4 million times the UMA (MXN868,094,000, or approximately USD50,034,000), provided that the joint assets or annual sales in Mexico of the economic agents involved in the transaction (or series of transac - tions) amount to at least 40 million times the UMA (MXN4,692,400,000, or approximately USD270,455,000) or more. These thresholds apply across all sectors and indus - tries. 2.6 Calculations of Jurisdictional Thresholds Jurisdictional thresholds are calculated as follows: • Transaction value : In connection with the first threshold, the CNA considers the value or price paid by purchaser (including cash, assumption of liabilities, or any type of exchange of securities or swap of assets) for assets located in national ter - ritory. In its guidance, the CNA takes the position that for purely Mexican deals, total consideration paid by purchaser is the relevant figure whereas in cross-border deals, this threshold would only in principle apply to the extent that the parties specifically allocate (in the transaction documents, internal documents or otherwise) a specific portion of the total consideration to the Mexican assets. • Value of assets : In assessing the value of the Mexican assets of target (second threshold), the CNA relies on the total assets line item of the most recent audited financial statements (or most cur - rent internal statements in lieu of audited finan - cials). With respect to the value of the Mexican assets being concentrated (third threshold), the CNA will look at the higher of (i) commercial value (ie, price paid for such assets) and (ii) book value. • Sales in Mexico : Sales originating in Mexico (sec - ond and third thresholds) are considered by the CNA to be those that have a material nexus with Mexico. These include sales made by Mexican companies, regardless of their destination, and
co-ordinate marketing efforts. 2.4 Definition of “Control”
Change-in-control transactions can give rise to a filing requirement to the extent that monetary thresholds are exceeded. Neither the FCA nor its Regulations define “control”. However, CNA guidance makes reference to the defi - nitions of control used in certain court precedents and the Securities Market Act, among others. Generally speaking, the CNA considers that control exists when a person meets one or more of the following criteria: the person (i) can impose, directly or indirectly, deci - sions in the shareholder meetings or equivalent body of a company; (ii) can appoint or remove the majority of the members of a company’s board of directors; (iii) holds rights which allow it to, directly or indirectly, vote more than 50% of the shares of a company; (iv) has the ability to determine, directly or indirectly, the management, strategy or main policies of a company, either through the ownership of stock, under contract or by any other means; or (v) has the capacity or the right to appoint high-level executives such as direc - tors, managers, relevant executives or main repre - sentatives of a company. 2.5 Jurisdictional Thresholds Concentrations are subject to prior CNA approval in the event that at least one of the following statu - tory thresholds is met. Monetary values are calcu - lated using the 2026 value of the daily Measuring and Update Unit ( Unidad de Medida y Actualización , UMA), which is MXN117.31. • The transaction (or series of transactions), regard - less of the place of execution thereof, provides for a consideration payable for the Mexican portion of the transaction in excess of 16 million times the UMA (MXN1,876,960,000, or approximately USD108,182,000 at time of writing); • The transaction (or series of transactions) results in the acquisition in Mexico of at least 30% of the
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