GUATEMALA Law and Practice Contributed by: Ignacio Andrade Aycinena, Alejandro Solares Solares, Claudia Pontaza Rubio and Lester Meda Ruano, Lex Atlas
5.5 Definitive Agreements In Guatemala, it is permissible for tender offer terms and conditions to be documented in defin - itive agreements. Due to the nature of the local shareholding composition, most local entities are closely held and, other than a share securi - ties exchange, tenders are rare. 6. Structuring 6.1 Length of Process for Acquisition/ Sale The length of the process to acquire or sell a business will depend on several matters, and most of the time such matters depend on the parties involved in the M&A transaction – ie, on the nature of the target. If it is a financial institu - tion, the process can take up to approximately 12 months as the approval of the authority is required before closing the deal. If the acquisition or sale of the business requires the transfer of real estate, then the transfer shall be registered at the General Property Registry, which can take approximately 20 business days for owned entities, and one month for majority shares acquisitions which require public notice of shareholder meetings. During the pandemic, the Mercantile Registry of the Republic of Guatemala introduced the use of electronic signatures for Public Notaries, so when the Public Notaries register public docu - ments with electronic signatures, their regis - tration is more agile. It is possible that similar changes will be made to the General Property Registry in the near future. 6.2 Mandatory Offer Threshold In Guatemala there is no mandatory offer thresh - old; however, if an offer is made to more than
35 persons, the offer will be deemed as public and certain mandatory requirements will apply under the Law of the Securities and Merchan - dise Market. Offers between existing sharehold - ers of local entities, even if made to more than 35 persons, have not been deemed a public offer. 6.3 Consideration In Guatemala, it is more common to use cash as a consideration, but it is also common for the consideration to be mixed, part cash and part securities, and not just shares but bonds as well. Common tools to bridge value gaps between the parties include escrow accounts to determine certainty on final decisions in litigation matters. 6.4 Common Conditions for a Takeover Offer The common conditions for a takeover offer are: • establishing the number of shares to be acquired; • the price of acquisition; • terms of payment of the price; • all regulatory, and governmental approvals and/or permits required to complete the offer being granted on terms acceptable to the offeror; • that no material adverse effect has occurred or will occur in a certain period; • no material pending litigation against the tar - get or any of its legal representatives, share - holders or ultimate beneficiaries has occurred or is expected to occur; and • that no public information or information disclosed by the target to the offeror is inac - curate, incomplete, or misleading, amongst others. The only restrictions imposed by law and enforced by regulators are the those related to
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