MEXICO LAW AND PRACTICE Contributed by: Fernando Carreño, Sergio López, Michel Llorens, Andoni Garza and María García, Von Wobeser y Sierra
Sales Considerations The sales to be considered in the threshold anal - ysis are Mexican sales, which can be carried out by a Mexican or foreign entity. For a sale to qualify as a Mexican sale, the sale should be invoiced in Mexico, to a Mexican cus - tomer, or made by a Mexican entity to national or foreign customers. Also, the sales of third-party distributors that are not part of the distribution network of the entities involved in the transac - tion should not be considered in the thresholds analysis. Exchange Rates for Assets and Sales Expressed in Other Currencies For the conversion of US dollars to Mexican pesos, the exchange rate that should be used is the lowest exchange rate published by the Mexican Central Bank in the preceding five days counted from the date on which the transac - tion will be notified. The exchange rate can be reviewed under the column titled “Para pagos”. Where the sales or assets are shown in a cur - rency other than US dollars, any exchange rate indicator that reflects the value of the Mexican currency regarding the foreign currency in ques - tion can be used. 2.7 Businesses/Corporate Entities Relevant for the Calculation of Jurisdictional Thresholds The entities to be considered in the Mexican thresholds will depend on the specific threshold being analysed. When it comes to the size of the target threshold, the parties will only have to consider the Mexican sales or assets of the target. In terms of the size of the parties’ threshold, the parties involved need to consider the Mexican capital stock or asset value of the target for the
to the total Mexican assets or capital stock (eg, 20% of the total Mexican assets or capital stock should be greater than MXN950,376,000). 2.6 Calculations of Jurisdictional Thresholds General Assessment of Jurisdictional Thresholds in Mexico In terms of the price allocation threshold, the value of the Mexican portion must be included in the transaction documents or determined in any tax documents related to the transaction. If there is no price allocation for the Mexican por - tion, this threshold will not apply, and the other two must be assessed instead. For the size of the target threshold, the transac - tion must imply the acquisition of 35% of the assets or shares of an entity and its direct or indirect Mexican sales or assets must have a value above the second part of the threshold. For the size of the parties’ threshold, the first part of the threshold refers to the assets or capital stock being acquired in Mexico. Thus, if the transaction only implies the acquisition of a certain percentage, such percentage should be applied to the total assets or capital stock to determine if the first limb of the threshold is met. Regarding the second part, the Mexican sales or assets of all parties involved – namely, seller, target and buyer (as applicable) – must be considered. Assets Considerations In terms of assets, the value to be considered is either the asset value expressed in the bal - ance sheet or the fair market value (whichever is higher).
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