CHILE Trends and Developments Contributed by: Luis Felipe Hübner, Diego Marín Ithurbisquy, Felipe Hübner Vadivieso and Valentina Fuentes, UH&C Abogados
Key implications for M&A transactions include the following. • Applicability limited to critical infrastructure and essential services: The law applies only to public and private entities classified as operators of essential services, meaning its impact on M&A transactions will be industry- specific. • Mandatory cybersecurity due diligence for critical sectors: Buyers involved in transac - tions within regulated industries (eg, telecom - munications, banking, utilities) must conduct cybersecurity audits to assess compliance risks before finalising deals. • Higher compliance costs and infrastructure investments: Affected companies will need to strengthen their cybersecurity protocols to meet the new requirements, which could impact deal valuations and negotiations. • Integration of cybersecurity clauses in M&A contracts: Transactions in regulated sec - tors will increasingly include warranties and indemnities covering cyber risks, ensur - ing that security vulnerabilities are properly accounted for. Although this law does not impose general cybersecurity obligations on all companies, businesses operating in essential sectors must proactively integrate compliance measures to avoid post-transaction liabilities and regulatory scrutiny. Start-Ups in the Chile M&A Market Start-up synergy: transforming Chile’s M&A landscape Start-ups have become an increasingly central component of Chile’s M&A market, both in terms of transaction volume and deal value. In 2024, M&A transactions involving start-ups accounted for 112 deals, with a total aggregate value of
USD1.103 million, according to TTR Data. This represents a notable portion of Chile’s overall M&A market, highlighting the growing role of start-ups in deal-making, capital allocation and corporate expansion strategies. Beyond M&A transactions, start-ups in Chile have also leveraged alternative financing mechanisms, such as ScaleX Santiago Venture Exchange, which has facilitated USD16.77 mil - lion in public offerings as of 2024. With 125 reg - istered start-ups, each required to designate a sponsor – an authorised entity responsible for guiding and supporting the company through - out its listing process – and an expanding inves - tor base, ScaleX has positioned itself as a vital platform connecting emerging companies with institutional and private capital. Leading legal and advisory firms, including UH&C Aboga - dos, currently serve as sponsors, underscoring the credibility and professionalism of the plat - form. Moreover, Chile’s regulatory advance - ments, including the integration of ScaleX into the regional stock exchange market “Nuam exchange” , have enhanced the country’s attrac - tiveness for foreign investors looking to engage with Latin American start-ups. In recent years, the combination of venture capital funding, corporate investment, and public policy incen - tives has fostered a dynamic environment where start-ups are no longer merely acquisition tar - gets but active contributors to shaping the M&A landscape. Key factors driving start-up M&A activity are as follows. • Institutional and government support: Initia - tives like ScaleX Santiago Venture Exchange and CORFO-backed funding programmes have been instrumental in improving capital access and positioning start-ups as attractive
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