CHILE Law and Practice Contributed by: Cristián Eyzaguirre Fontaine, Daniela Del Solar Nielsen and Gonzalo Eyzaguirre Alvarado, Eyzaguirre & Cía
11. Activism 11.1 Shareholder Activism
and well-informed judgment that the transaction would be detrimental to the company’s interests.
Shareholder activism in Chile remains relatively limited in impact compared to more developed markets such as the United States of America and Europe. Chile’s legal framework does not provide the same level of shareholder rights or activism-friendly mechanisms as other jurisdic - tions, and the concentrated ownership of Chil - ean companies further restrains activism forces. Despite such limitations, pension funds man - aging entities and other institutional investors have had an active role in corporate governance, focusing on pressuring companies to adopt poli - cies inspired by ESG principles, such as imple - menting corporate governance policies, includ - ing board diversity requirements and conflict of interest policies. 11.2 Aims of Activists Shareholder activism in Chile has had a limited impact, as discussed in 11.1 Shareholder Activ- ism . The current activism is relatively mild and does not primarily target mergers and acqui - sitions, spin-offs, or significant divestitures. Instead, it focuses on advocating for the adop - tion of policies aligned with ESG principles. This may be partly explained by Chilean law, which tends to emphasise shareholders’ with - drawal rights in certain situations rather than granting them direct veto powers over strategic corporate decisions. 11.3 Interference With Completion As mentioned in 11.2 Aims of Activists , it is not common in Chile for activists to seek to interfere with the completion of M&A transactions.
10. Litigation 10.1 Frequency of Litigation
In Chile, while litigation is not the general trend in M&A transactions, it is still relatively common, particularly in cases involving disputes over purchase price adjustments, breach of repre - sentations and warranties, and indemnification claims. These matters are generally submitted to arbitration in Chile or some international arbitra- tion forum. 10.2 Stage of Deal Litigation in M&A deals is commonly triggered during the post-closing phase. This phase occurs after the transaction has been complet - ed, and issues such as breaches of warranties, representations, or indemnity provisions arise during this period. 10.3 “Broken-Deal” Disputes Over the past few years, various disputes have highlighted important lessons in M&A transac - tions, particularly regarding the risks of misrep - resentation and incomplete disclosures. These disputes underscore the critical importance of thorough due diligence, transparency between parties, and accurate financial reporting during negotiations. Ensuring that all relevant informa - tion is disclosed and that both parties engage in open communication is essential in mitigat - ing risks and preventing potential litigation in the post-closing phase.
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