CHILE Law and Practice Contributed by: Alvaro Moraga Fritz and Sebastián Moraga Nazar, Moraga & Cía.
According to Article 35 bis of the LGB, to acquire control of a bank or to increase existing control (whether through a merger, acquisition of all or a substantial portion of the assets and liabilities of another bank, or a takeover) such that the acquiring bank or the resulting group of banks reaches systemic importance (as defined in Arti - cle 66 quáter of the LGB), the parties involved in the acquisition or control increase must obtain prior authorisation from the CMF. In accordance with this, and as expressly out - lined in the LGB, the CMF issued Chapter 21-11 of the updated compilation of regulations, which establishes the factors and methodologies for identifying banks or groups of banks deemed to be of systemic importance. Prior authorisation from the CMF is required to proceed with the acquisition or merger of banks, or to assume control over one or more banks. Under Article 35 bis, if the acquisition or merger results in the acquiring bank or banking group achieving systemic importance, addition - al requirements may be imposed under Article 66 quáter of the same law. The CMF may deny authorisation through a reasoned decision (sub - ject to the favourable agreement of the Central Bank’s board), which must be issued within ten banking business days. Furthermore, Article 36 stipulates that any indi - vidual wishing to acquire shares representing more than 10% of the capital of a bank must obtain prior authorisation from the CMF. This 10% threshold applies both to direct and to indirect acquisitions. Shares acquired without authorisation will lose their voting rights, and any transfer of more than 10% of the rights in a company holding bank shares is also subject to CMF approval.
To obtain such authorisation, the interested party must comply with the requirements established in Article 28 of the LGB. The CMF will assess compliance with these requirements and will issue its decision within 15 banking business days in the case of acquisitions exceeding 10% of a bank’s shares under Article 36. Controlling shareholders must maintain ade - quate solvency to support their stake in the bank, and they must inform the CMF if their net worth falls below the required threshold (Article 28). The CMF may request additional information to verify compliance with these requirements. In the event of serious non-compliance, sharehold - ers may be required to divest their stake. Finally, Article 49 No 5 of the LGB provides that a bank may acquire shares in another bank solely for the purpose of effecting a merger between the two institutions. The provision sets forth sev - eral requirements, including the following. • Prior authorisation must be obtained from the CMF, and may only be granted if it is dem - onstrated to the CMF’s satisfaction that the acquiring entity holds control over two thirds of the voting shares of the target company. • The acquiring bank must make a firm public offer to purchase all the shares of the target institution at a price of no less than the aver - age of those it has committed to acquiring as per the previous provision. After making this offer, the acquiring bank is obligated to purchase all shares that are offered for sale. • The basic capital and effective equity of the merged institution must be no less than the amount required to qualify for an A-level sol - vency rating, according to Article 61.
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