MEXICO LAW AND PRACTICE Contributed by: Fernando Carreño, Sergio López, Michel Llorens, Andoni Garza and María García, Von Wobeser y Sierra
• In 2023, Engie, Sonate Bidco and Veolia Envi - ronment were sanctioned with fines totalling MXN11,029,331 (approximately USD563,618). • In 2023, HP, Inc. and Plantronics, Inc. were sanctioned with fines totalling MXN 61,580,800 (approximately USD3,146,887). 2.14 Exceptions to Suspensive Effect No exceptions to the suspensive effect are set forth in Mexican law. 2.15 Circumstances Where Implementation Before Clearance Is Permitted As a general rule, parties are not permitted to close a transaction before obtaining clearance in Mexico. However, it is possible to implement carve-outs involving the business, assets, or entities located in Mexico, allowing the global transaction to proceed while the pre-merger fil - ing remains pending before the Mexican author - ity. That said, COFECE tends to view these alter - natives with caution and has, in at least one instance, ordered the parties to refrain from clos - ing the transaction until clearance was granted in Mexico. Therefore, if closing prior to clearance is unavoidable and a carve-out is contemplated for the Mexican portion of the transaction, it is strongly recommended to notify the Authority in advance. Doing so can help mitigate the risk of penalties for gun-jumping.
cleared by the Authority before any of the fol - lowing take place: • the legal act by which the transaction is car - ried out is perfected in accordance with the applicable legislation or, if the case may be, fulfils the condition precedent to which said act is subject; • the direct or indirect acquisition or exercise of factual or legal control of another entity (or the factual or legal acquisition of another entity’s assets, trust participation, partnership interest, or stock); • the execution of a concentration agreement among the involved undertakings (unless it is conditional upon clearance by the authority); or • the culmination of the last in a sequence of acts, owing to which any of the Mexican thresholds are met. If the parties to a transaction carry out any of the above-mentioned acts before notifying and obtaining clearance, they will be subject to a fine ranging from MXN565,700 (approximately USD28,908) up to 5% of their income. 3.2 Type of Agreement Required Prior to Notification Pursuant to the law, the parties should submit the executed agreement or at least the draft of the agreement by means of which the transac - tion is going to be executed. However, the merg - er guidelines establish that the authority could accept a draft of the transaction agreement or a Letter of Intent or Memorandum of Understand - ing – and even a description of the transaction – as long as the structure and the main terms and conditions of the transaction (including any non-compete and non-solicitation covenants) are not modified later.
3. Procedure: Notification to Clearance 3.1 Deadlines for Notification
Pursuant to the FECL, where a mandatory filing is required, a transaction must be notified and
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