MEXICO Law and Practice Contributed by: Carlo Cannizzo, Marco Cannizzo, Stefano Amato, Enrique García and Paloma Iglesias, Cannizzo
6. Structuring 6.1 Length of Process for Acquisition/Sale There is no defined timeframe for a sale and pur - chase process but, depending on the complexity of the negotiation and the need to obtain government authorisations to carry it out, it could take months. A merger authorisation process before the CNA or other authorities, depending on the relevant industry, may take more than six months if the relevant authority considers that it is a complex case. In the banking sector, authorisation must be obtained from the CNBV, which must have the positive opinion of the Mexican central bank, the Bank of Mexico ( Banco de México ), In the case of private companies, there is no threshold determined by law that requires an offer to be made for a certain number of shares. However, in the case of public companies, and as dis - cussed in 6.4 Common Conditions for a Takeover Offer , if there is an intention to acquire 30% or more of the ordinary shares of a company registered in the RNV, a mandatory takeover bid must be made, which is subject to the following terms and conditions: • The offer shall be extended to the different series of shares, including those with limited, restricted or non-voting rights. • The consideration shall be the same, regardless of the class or type of share. • The offeror shall disclose the commitments assumed with the company or with the holders of the securities it intends to acquire. • The offer shall be made: to authorise an acquisition of shares. 6.2 Mandatory Offer Threshold (a) for the percentage of the capital stock of the company equivalent to the proportion of com - mon shares sought to be acquired in relation to the total of such shares or for 10% of such capital, whichever is greater, provided that the offeror limits its final holding on the occasion of the offer to a percentage that does not imply obtaining control of the company; or (b) for 100% of the capital stock when the offeror intends to obtain control of the company.
8. Intellectual Property (IP) Due Diligence • Review of trade marks, patents, copyrights, trade secrets and software rights owned or licensed by the company. • Identification of potential IP licensing issues. • Verification of IP registrations with the Mexican Institute of Industrial Property ( Instituto Mexicano de la Propiedad Industrial or IMPI) and compliance with applicable laws. 9. Real Estate and Asset Due Diligence • Examination of ownership titles, lease agreements and land use permits for company properties. • Verification of encumbrances, mortgages or liens affecting real estate assets. • Compliance with zoning and environmental regula - tions related to owned or leased properties. 10. Competition and Antitrust Due Diligence • Evaluation of market concentration risks and com - pliance with antitrust regulations enforced by the CNA. • Identification of anti-competitive practices, exclu - sive agreements or market dominance concerns. • Assessment of whether the business combination triggers mandatory pre-merger notification require - ments under Mexican antitrust law. 5.4 Standstills or Exclusivity Both standstill and exclusivity arrangements or pro - visions are usually included in M&A transactions in Mexico. Rather than in contracts, in practice they are included as clauses or provisions in letters of intent and term sheets or other documents setting forth exclusivity until the contract is signed, authorisations are obtained and standstills restricting certain activi - ties – such as sale of assets, salary increases and sales promotion – are agreed. While standstill and exclusivity provisions are gen - erally enforceable under Mexican law, they must be carefully drafted to ensure clarity on scope, duration, and potential penalties for breaches. 5.5 Definitive Agreements Mexican laws allow for tender offer terms and condi - tions to be documented in a definitive agreement.
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