COLOMBIA Law and Practice Contributed by: Jaime Trujillo, Andres Crump and Natalia Ponce de León, Baker McKenzie
Board and Officer Appointments Bidders can secure the right to nominate direc - tors and officers to the target company’s man - agement. Board representation allows the bidder to active - ly participate in corporate governance and stra - tegic planning. Voting Agreements Bidders can enter into voting agreements with other shareholders. These agreements may include commitments to vote in a certain way on specific matters, ensur - ing alignment of interests. 6.9 Voting by Proxy Shareholders can vote by proxy in Colombia. 6.10 Squeeze-Out Mechanisms In Colombia, there are no legal squeeze-out mechanisms for listed companies and thus minority shareholders cannot be compelled to sell their shares. On the other hand, minority shareholders holding at least 1% of a publicly listed company’s shares are entitled to request a public tender offer for them to sell their shares. This provision comes into play when an entity acquires more than 90% of the target company’s shares through means other than a comprehensive tender offer for all the shares of the target company. In such sce - narios, the entity is obligated to launch the public tender offer within a period of three months from the time it exceeds the 90% ownership thresh - old. 6.11 Irrevocable Commitments Listed companies are usually acquired through irrevocable commitments from principal share -
their transaction’s success and are adjusting contractual language accordingly. Regulatory Environment and Interim Periods While there have not been specific changes to the regulatory environment overall, the length of interim periods has increased. Extended regula - tory approvals and unforeseen delays are nowa - days triggered by changes in the workforce of public entities resulting from changes in gov - ernment and regulatory authorities that actively promote antitrust measures and exhibit less flex - ibility towards private investments. 6.8 Additional Governance Rights In Colombia, control of a company can be estab - lished through a majority shareholding of more than 50% (although certain limited decisions may require higher thresholds in accordance with the law) and through other governance or contractual mechanisms. Bidders seeking less than 100% ownership of a target can negotiate the additional rights outlined below. Vetoes and Supermajority Decisions Bidders can negotiate veto rights over specific strategic decisions, such as major acquisitions, capital expenditures, or changes in corporate structure. Supermajority provisions (requiring approval by a higher percentage of shareholders) can also grant the bidder additional influence over critical decisions. In any case, certain decisions require higher vot - ing thresholds per law, such as the decision to issue shares not subject to pre-emptive rights.
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