CHILE Law and Practice Contributed by: Cristián Eyzaguirre Fontaine, Daniela Del Solar Nielsen and Gonzalo Eyzaguirre Alvarado, Eyzaguirre & Cía
aware of the transaction, are required to disclose material information on the transaction to the Financial Market Commission ( Comisión para el Mercado Financiero , CMF) and the general public once a binding or definitive agreement is executed, and this includes any change of con - trol event or event that may significantly affect the company’s financial position or market value and is typically made through a material event filing ( hecho esencial ). In contrast, privately held companies have fewer obligations to disclose but may still need to notify the National Eco - nomic Prosecutor’s Office ( Fiscalía Nacional Económica , FNE) when both revenue thresholds referred to in 2.4 Antitrust Regulations are met. In cross-border M&A transactions, if foreign parties are required under the law of their juris - diction to file with their respective authorities or stock exchanges, such filings will only trigger a reporting obligation in Chile to the extent that both revenue thresholds referred to in 2.4 Anti- trust Regulations are met. Where the target is a publicly traded company, the execution of a non-binding letter of intent generally does not by itself require formal disclo - sure. The mere commencement of negotiations does not trigger a disclosure requirement unless it creates a reasonable expectation that a bind - ing agreement will soon be executed or if infor - mation leaks and materially affects the market. In such cases, the target, and sometimes the buyer and/or seller, may need to disclose to ensure transparency. For privately held companies, no immediate disclosure is typically necessary unless the negotiations have a significant market impact and, thus, require approval by the FNE. 5.2 Market Practice on Timing In Chile, market practice generally aligns with the legal framework governing disclosure require -
ments, with full compliance being the standard approach. However, the depth of the information disclosed may vary depending on the specific stage and complexity of the transaction. This may involve gradual disclosure, particularly in complex deals or when managing sensitive reg - ulatory or confidential matters. Nevertheless, any attempt to delay or obscure disclosure beyond what is permitted by law may result in regulatory sanctions. Therefore, compa - nies must exercise caution and ensure compli - ance to avoid legal and reputational risks. 5.3 Scope of Due Diligence The parties involved determine the scope of legal due diligence in a certain transaction, tak - ing into account factors such as timing, efficien - cy, industry-specific risks, costs, and the legal risks associated with material non-compliance with Chilean law. The agreed-upon legal scope typically covers corporate, labour, tax, and regu - latory matters, material contracts, assets, and liabilities, as well as litigation cases that may give Standstill agreements are less common in Chile than in other jurisdictions. However, exclusivity agreements are more frequently used in trans - actions, particularly during negotiations, to pre - vent parties from engaging with others for a set period. 5.5 Definitive Agreements It is permissible in Chile for the terms and con - ditions of a tender offer to be documented in a definitive agreement. Although tender offers are usually subject to specific regulatory require - ments and are typically detailed in a separate offer document, there is no legal restriction against including the terms within a definitive rise to some material contingency. 5.4 Standstills or Exclusivity
433 CHAMBERS.COM
Powered by FlippingBook