MEXICO Trends and Developments Contributed by: Gabriel Robles, Héctor Cárdenas, Eric Silberstein and Eduardo Aiza, Ritch Mueller
tariffs or currency fluctuations, thereby strengthening the value proposition of Mexican portfolio companies. Legal reforms and their impact on private equity Although the macroeconomic environment is broad - ly favourable, private equity activity has also been reshaped by important regulatory and institutional changes. Over the last 12 months, two reforms of par - ticular note have generated robust discussions within the investment community: (i) reforms to Mexico’s judiciary branch; and (ii) the reform to the Mexican Federal Economic Competition Law and Telecommu - nications Law which result in the creation of a replac - ing competition authority as described below. Both legal reforms have direct and indirect implications for private equity transactions, from the way disputes may be resolved to the thresholds and approvals required for merger control. Judiciary reform Approved in late 2024, Mexico’s judiciary reform intro - duces several structural changes to the country’s judi - cial framework. One of the headline features is the requirement that Justices of the Supreme Court of Justice, members of Circuit Courts, and Federal Dis - trict Judges be elected through direct vote of Mexican citizens. Although full implementation of the reform is expected to conclude within the last quarter of 2025, the new provisions are already influencing how legal disputes are adjudicated and how investors perceive the impartiality and efficiency of courts, thus, modify - ing their approach when negotiating jurisdiction and conflict resolution clauses. From a private equity perspective, the key considera - tions include the potential impact on litigation time - lines, the independence of judicial bodies (particularly as it relates to disputes with the government), and the administrative processes for securing injunctions or protective measures. Although the reform intends to reduce backlogs and increase transparency, short- term uncertainty may arise as new justices take office and the adjudication processes adapt to the revised framework. Investors should be mindful that signifi - cant changes to the Supreme Court’s structure, par - ticularly reducing it from eleven to nine justices and reducing their terms, could affect the pace of consti - tutional review and the predictability of certain rulings
that directly impact commercial deals. Fund managers are encouraged to assess potential litigation risk, not only within their transactional documentation (possi - bly prioritising arbitration clauses or carefully negoti - ated venue and jurisdiction provisions to mitigate any short-term volatility as the reform is fully implement - ed), but also when evaluating transaction structures (which are typically tax driven) and liabilities of their target companies. The reform also establishes a new Judicial Discipline Tribunal, which has the authority to investigate and sanction judicial officers who fail to meet professional standards. Although this tribunal is largely designed to address misconduct and inefficiency in the judiciary, market participants should be aware that the tribunal’s powers could influence the speed at which courts pro - cess corporate and commercial cases. If the tribunal vigorously enforces its procedural timelines, dispute resolution may become faster in the medium term, a development that would be well-received by private equity managers looking to protect or enforce their contractual rights in Mexico. Antitrust reform and the birth of the CNA Alongside judiciary changes, Mexico has recent - ly enacted important reforms in antitrust matters. The Federal Economic Competition Commission ( Comisión Federal de Competencia Económica , or COFECE) will transfer its legal authority to a new body: the National Antitrust Commission ( Comisión Nacional Antimonopolio , CNA). This newly established entity will operate as a decentralised public agency within the Ministry of Economy, possessing technical and operational autonomy. Crucially, the CNA’s expanded capabilities include the following. • Increased investigative powers – the CNA holds greater authority to perform inspections and collect statistical data from individuals and companies. These enhanced capacities could lead to more frequent and in-depth probes of transactions that raise potential antitrust concerns. • Reduced financial thresholds and share accumula - tion tests for merger control – the values that trig - ger mandatory pre-merger notification have been
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