CHILE Law and Practice Contributed by: Cristián Eyzaguirre Fontaine, Daniela Del Solar Nielsen and Gonzalo Eyzaguirre Alvarado, Eyzaguirre & Cía
gate this risk through the use of escrow arrange - ments, whereby a portion of the purchase price is withheld for a defined period to cover potential contingencies arising post-closing. Business combinations may also be achieved through the corporate reorganisations outlined below. • Mergers: whether they are made by absorp - tion, where one or more companies that cease to exist become part of and merge into another pre-existing company, which acquires all the assets and liabilities of those that cease to exist in consideration of the issuance of shares to the shareholders of the latter; or by consolidation, where two or more companies that cease to exist transfer or con - tribute all their assets and liabilities to a new company, in consideration of shares in the new company. A merger may also be deemed to occur when a single corporate shareholder acquires all shares or ownership interests in a company. In such cases, Chilean law generally requires that the absorbed entity be dissolved and integrated into the acquiring company, given that most corporate forms require at least two shareholders to remain in existence. • Spin-offs or demergers: these involve the divi - sion of an existing company by resolution of its own shareholders, who agree to separate part of its equity capital and transfer spe - cific assets, liabilities, and capital to a newly formed entity. All shares in the new company are allotted to the same shareholders of the original entity as part of the reorganisation. • Cooperation or joint venture structures: through corporate or unincorporated contrac - tual joint ventures.
Special procedures apply to transfers of busi - ness and business combinations by, among oth - ers, banks and financial institutions, insurance companies, pension fund managing entities, other third-party fund administrators, and secu - ritisation companies. 2.2 Primary Regulators The primary regulators for M&A activity in Chile are outlined below. • National Economic Prosecutor’s Office ( Fiscalía Nacional Económica , FNE): agency in charge of overseeing antitrust regula - tions, issuing mandatory general regulation on competition, including M&A transactions, as it is the authority responsible for approv - ing, approving with conditions, or rejecting concentrations that, in its view, may reduce market competition. • Antitrust Court ( Tribunal de Defensa de la Libre Competencia , TDLC): Specialised tribu - nal entrusted with the prevention, the taking of corrective actions, and the sanctioning of anti-competitive practices and deals, and any other breaches and infringements of the anti - trust and free competition law. It also reviews decisions issued by the National Economic Prosecutor’s Office in connection with merger control proceedings. • Financial Market Commission ( Comisión para el Mercado Financiero , CMF): the financial markets regulator, which is relevant when at least one of the entities involved in a transac - tion is a banking institution, insurance com - pany, or other finance-related entity under its supervision (eg, the target entity is publicly traded). • Internal Revenue Service ( Servicio de Impues- tos Internos , SII): agency involved in adminis - tering tax laws and enforcing tax compliance.
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