MEXICO TRENDS AND DEVELOPMENTS Contributed by: Christian Lippert Helguera, Carlos Chávez Alanís, Juan Carlos Burgos Carbajal and Gerardo Rodríguez Aguilar, Galicia Abogados, S.C.
Merger Control More with less?
of IFT will transfer to the CNA, it is expected that an effort will be made to eliminate duplica - tive positions and remove sections or units the responsibilities of which overlap with those of the Ministry of Economy. Also, it is possible that compensation of staff will be adjusted to con - form to the budget and hierarchies within the Ministry of Economy. Substantive changes to competition law While, as noted above, Congress was only mandated to legislate to conform the FCA to the December 2024 constitutional amendment, a prior bill proposed by a Congressman of the incumbent party sought to include exploitative abuses in the catalogue of abuses of dominance set forth in the FCA and to expand the scope of transactions subject to a merger control clear - ance by making certain types of joint ventures mandatorily reportable. The Bill does not follow that path. While it increases fines for substantive and procedural infringements, lowers the merger control mon - etary thresholds and significantly shortens pro - cedural timelines for investigations and merger review, no changes are made to the catalogue of practices that are considered cartels or abuses of dominance nor to the types of transactions that trigger a merger control filing. Perhaps the only substantive change is that, fol - lowing the new industrial policy that the incum - bent party built into the Federal Constitution, which favours state-owned companies in the hydrocarbons and power generation industries, PEMEX (the state-owned oil company) and CFE (the state-owned power utility) cannot be con - sidered monopolies under the FCA (which will likely result in much debate as to whether this is, and to what extent, an antitrust exemption).
As noted above, the Bill proposes reducing all merger control monetary thresholds (by approxi - mately 11%-17%). It also proposes to repeal a couple of exemptions currently in the FCA: (i) foreign transactions where the relevant target has no assets or subsidiaries in Mexico, and (ii) acquisitions by investment funds the purpose of which is solely speculative. These changes will likely expand the already high number of trans - actions that are subject to antitrust review. The Bill also proposes to shorten statutory deadlines for issuing merger control decisions. While we will have to wait and see how all these changes play out once the CNA is up and run - ning, it is fair to expect that an increased case - load coupled with the efficiency goals described above (which will, in turn, likely result in less staff and lower compensation), may result in longer and less predictable review processes. Finally, the Bill proposes that “below-the-radar transactions” can be investigated up to three years after closing, instead of the one-year stat - ute of limitations currently in the FCA. Things to keep an eye on It is not expected that the current commissioners of the boards of COFECE and IFT (except per - haps with one or two exceptions) will be consid - ered for appointments to the Board of the CNA. At the same time, it is uncertain if key staffers from COFECE will retain their positions within the CNA. Accordingly, while the new agency may in due course set new policies and criteria, it is expected that at least in the near future most of the current COFECE standards and practices will remain in place. Below we highlight the mat - ters that we believe are worth keeping an eye on
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