ECUADOR Trends and Developments Contributed by: Félix Reyes, Lorena Barrazueta, Jorge Sicouret Zea and Karla Condo, Coronel & Pérez
Political, security and energy crises shaping M&A activity Over the last few years, Ecuador has faced a political crisis that prompted the previous Presi - dent, Guillermo Lasso Mendoza, to dissolve the National Assembly and call for early presidential elections. As a result, in October 2023, Daniel Noboa Azín was elected President. In April 2024, a public referendum was held to address significant constitutional reforms related to economic and investment matters. One of the key proposals aimed to repeal the prohibition in Article 422 of the Constitution, which prevents the Ecuadorean state from engaging in inter - national arbitration before institutions such as ICSID. The executive proposed amending this article to permit both investment and commer - cial international arbitrations, but over 65% of voters opposed this reform. Additionally, with the support of the country’s main Chamber of Com - merce, a proposal was introduced to authorise fixed-term and hourly contracts to increase access to decent employment, which is currently available to less than 30% of the economically active population. However, nearly 70% of vot - ers rejected this proposal. Both security and energy crises characterised 2024. In response to these two crises, multiple “states of emergency” were declared. The vio - lent death rate reached the second-highest level in the country’s history, surpassed only by 2023. The increase in the number and cost of claims paid out by insurers over these two years may be linked to these factors. The first round of the presidential elections took place in February 2025. The current President, Daniel Noboa, received a slightly higher vote share than Luisa González, the candidate from former President Rafael Correa’s party. The
Introduction Ecuador has shown remarkable strength and adaptability in the M&A sector. Since 2021, the country has seen consistent growth in these transactions, with a significant increase in cross- border acquisitions over the past two years. This momentum has persisted despite a challenging economic and political landscape, reinforcing Ecuador’s position as a strategic market in the region. Looking ahead, expectations remain positive for 2025, with forecasts suggesting the continuation of this trend. Navigating the Ecuadorean Business Market From a regional standpoint, Ecuador’s stock market has remained relatively modest. The country has two stock exchanges, one in Quito and the other in Guayaquil, and fewer than 100 companies have their stock listed in either of them. During 2024, the trading volume of listed stocks declined by 43% compared with 2023. A significant portion of Ecuadorean companies are not listed, are either family-owned or have a highly concentrated ownership base and have simple corporate governance structures. There - fore, as long as the market share or total turnover of the parties thereto are below the thresholds set forth in the antitrust regulations, the majority of M&A transactions are not subject to disclo - sure requirements. A distinctive feature of Ecuador’s legal frame - work is the accessibility of corporate infor - mation. Unlike other markets, public access extends beyond information on listed companies to include data on unlisted companies as well. Through the website of the corporate authority, the Superintendency of Companies, Securities, and Insurance, it is possible to access key cor - porate information, as well as legal and financial documents of non-listed companies.
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