MEXICO Law and Practice Contributed by: Melissa Franco and Mauricio Oropeza, Deloitte Impuestos y Servicios Legales, S.C.
approval are less than an extraordinary meeting, and formalisation before a notary public is not required. However, due to the “certain date” requirement by the tax authorities – meaning that the acts relevant to the corporate life of taxpayers must have an additional validation on the date they were held, by means of registration or notarisation – it is highly advisable to proceed with such formalisation. There is also a preference right, whereby the other partners or shareholders of a Mexican company will have to be preferred to acquire shares or increase their capital stock before third parties can do so. Never - theless, the partners or shareholders can refuse such right prior to the transfer or at the time of the meeting. Acquisition of Assets Another alternative for FDI in Mexico is the acquisi - tion of companies by means of the transfer of assets. Usually, the decision on these types of transactions is made based on the tax consequences each alterna - tive represents to the companies and investors. In this sense, FDI can be made through the direct acquisition of assets, unless they are regulated asset or have a specific permit, in which case the acqui - sition can be made through an agreement, whether purchase, donation, bailment or other. For the acquisition of assets or shareholdings, in the event of a concentration in terms of the Federal Law of Economic Competition ( Ley Federal de Competen- cia Económica , or LFCE), the participating economic agents must obtain authorisation from the National Antimonopoly Commission ( Comisión Nacional Anti- monopolio , or CNA) prior to the implementation of the act or series of acts. Merger In a merger, all assets, liabilities and capital of the applicable companies will be absorbed by one entity, which is newly incorporated as a result of the merger or by the merging company. According to the LGSM, a merger requires a merging agreement as well as the holding of an extraordinary meeting of each of the companies involved, plus the applicable registration and notices being filed with the authorities. In such case, please note that the merger will have full effects
for internal purposes at the time of adoption of the applicable agreements, but against third parties at the following points: • at the time of registration, if all debts of all com - panies involved are paid, the amounts owed are deposited into a credit institution, or the consent of all creditors is obtained; or • three months after the last registration/publica - tion is made, so creditors have a term in which to object, if they deem that their rights might be affected as a result of the merger. The specific strategy is usually determined based on the tax implications of both scenarios. Nevertheless, some antitrust regulations might also apply if the enti - ties belong to the same sector or are dominant players in the same market. For public or highly regulated entities, additional authorisations from the supervisory authority might apply. 3.2 Regulation of Domestic M&A Transactions In general terms, the following regulations can be rel - evant for M&A transactions. Antitrust In the event of a concentration in terms of the LFCE, the participating economic agents must obtain author - isation from the CNA prior to the implementation of the act or series of acts. This authorisation might apply in the acquisition of a company already incorporated in Mexico, or in the acquisition of its assets. Such concentration usually happens in the case of mergers, acquisitions of shareholdings, acquisitions of assets or joint ventures. Foreign Investment As mentioned in 1.2 Regulatory Framework for FDI , certain activities are reserved for Mexicans or Mexican companies through a foreigner’s exclusion clause and certain activities have a maximum participation per - centage according to the LIE, such as transportation, broadcasting and newspapers, among others. If a for - eign investor is looking to participate in such industry in a higher percentage than is allowed, the company
381 CHAMBERS.COM
Powered by FlippingBook