CHILE Law and Practice Contributed by: Cristián Eyzaguirre Fontaine, Daniela Del Solar Nielsen and Gonzalo Eyzaguirre Alvarado, Eyzaguirre & Cía
6.3 Consideration In Chile, cash is the typical form of consideration in mergers and acquisitions, although shares also play a significant role in certain particular scenarios concerning large companies and are mostly seen in cross-border transactions. The choice between cash and shares depends on various factors, such as the transaction struc - ture, market conditions, tax regulations, the par - ties’ financial capacity, and the shareholders’ preferences. Usually, minority shareholders are given the option to choose some portion of the share price. In an environment characterised by high valu - ation uncertainty, such as in emerging sectors, technology industries, or volatile markets, the parties may resort to several tools to bridge value gaps and reach a mutually satisfactory agreement. These tools include earn-outs, price adjustment clauses, escrow arrangements, and call/put options. These mechanisms allow for the adjustment of consideration based on future events or specific conditions, thereby mitigating risk and uncertainty for both parties involved in the transaction. 6.4 Common Conditions for a Takeover Offer Without prejudice to the minimum content requirements established by the Securities Mar - ket Act for any tender offer (as further outlined in section 6.5 Minimum Acceptance Conditions ) takeover offers (OPAs) for publicly traded com - panies in Chile may include certain conditions, which remain subject to regulatory oversight. Common conditions in OPAs include: • minimum acceptance thresholds, where the bidder requires a certain percentage of shares
(eg, 50% or more) to be tendered for the offer to proceed; • regulatory approvals, in particular, from the National Economic Prosecutor’s Office ( Fiscalía Nacional Económica , FNE) in cases involving potential competition concerns; and • no material adverse change clauses, allowing the bidder to withdraw or adjust the offer if the target company faces significant nega - tive events such as financial distress or major litigation. Tender offers shall be addressed to all the share - holders of the target company or all the holders of shares of a given series, provided, however, that a tender offer may be limited to a certain amount of shares, in which case the shares ten - dered shall be acquired by the offeror on a pro rata basis. The terms and conditions governing a tender offer made with respect to shares of a given series shall be the same for all the holders of shares of such series. 6.5 Minimum Acceptance Conditions A tender offer process for shares of publicly traded companies in Chile must be publicly announced, and a prospectus must be prepared and made available to all interested parties. In accordance with the Securities Market Act, this prospectus must include, at a minimum: • full identification of the bidder and its control - ling persons; • details of the shares or securities subject to the offer; • price and payment terms; • offer duration and acceptance procedures; • acquisition history and relationships with other major shareholders; • method of financing; • guarantees, if any; revocation conditions;
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