1 Relevant Authorities and Legislation


As a result of the amendments made in 2013 to Article 28 of the Mexican Constitution, two administrative agencies, independent from the Mexican Ministry of Economy and with technical and operational autonomy to issue its resolutions, have been created to enforce competition law and the merger control notification process in Mexico: (i) the Federal Telecommunications Institute ("IFT"); and (ii) the Federal Economic Competition Commission (the "Commission"). IFT is the agency in charge of regulating and supervising the telecommunications, radio and TV industries, and the Commission is the agency responsible for all competition matters except for those sectors reserved for IFT. The Commission is integrated to exercise merger authority by public officials, divisions and administrative units, of which the main authority is the Commission in Plenary session, comprising seven commissioners, including the Commission President. Resolutions are issued by majority votes of its members and, exceptionally, by a qualified majority in accordance with the law.

1.2 What is the merger legislation?

Listed in order of hierarchy, the merger legislation is as follows: (i) Article 28 of the Mexican Constitution, which establishes the antitrust prohibition, concentrations and the monopoly exception regime in the case of intellectual property (patents, trademarks and copyrights) and certain state monopolies (oil, electricity and postal service, among others); (ii) international treaties to which Mexico is a party, containing antitrust provisions, including, among others, NAFTA/USMCA and EUFTA; (iii) the Federal Economic Competition Law (the "Law") and its regulations; (iv) the Industrial Property Law; (v) the Copyright Law; (vi) the Foreign Investment Law; (vii) the Federal Consumer Protection Law; (viii) the Federal Criminal Code; (ix) the Federal Tax Code; and (x) The General Law of Business Companies.

1.3 Is there any other relevant legislation for foreign mergers?

There is no relevant legislation for foreign mergers in terms of economic competition and free commercial practices, but requirements and limitations apply with respect to foreign investment for certain industry sectors.



2 Transactions Caught by Merger Control Legislation


The types of transactions caught under merger control provisions are subject to threshold tests related to the underlying value of each transaction or successive transactions. The Law defines a concentration as any merger, control acquisition or any act resulting in the concentration of legal entities (whether commercial or civil), including trust or assets in general among and between competitors, suppliers, customers, or any economic agents.

The Commission is able to challenge, suspend and sanction, subject to express criteria, any concentration with the purpose of diminishing, damaging or not allowing competition or free access, with respect to identical, similar or substantially similar goods and services.

Although control is not a defined term in the Law, if the underlying transaction falls within any of the thresholds set forth in the Law, regulation provides that a merger control notice shall be filed with the Commission prior to: (i) perfection of the underlying agreement or as condition precedent; (ii) acquiring or exercising direct or indirect control, de facto or de jure, of another economic agent, through purchase of assets, shares, units of trust certificates; (iii) execution of a merger agreement; or (iv) perfection of any combination of actions, the last of which would result in exceeding the thresholds.


The acquisition of a minority shareholding does not amount to a merger as a general rule; however, if such acquisition is within the scenarios and thresholds specified under question 2.4, it would be subject to notice and prior approval from the Commission.

2.3 Are joint ventures subject to merger control?

Yes, please refer to questions 2.1 and 2.4.

2.4 What are the jurisdictional thresholds for application of merger control?

Based on the foregoing, and in accordance with article 86 of the Law, the following transactions are subject to prior notice:

  1. When the transaction, irrespective of the place of execu-tion, results in the direct or indirect amount in Mexico equivalent to more than 18 million times the minimum general daily wage applicable in Mexico City ("MGDW"): approximately $1,848,240,000 pesos.
  2. When the transaction or a series of transactions imply an aggregate of 35% or more of the assets or shares of an economic agent, whose annual assets in Mexico or annual sales which originated in Mexico, are equal to more than 18 million times the MGDW: approximately $1,848,240,000 pesos.
  3. When the transaction or a series of transactions imply an aggregation in Mexico of assets or paid-in capital which amount to more than the equivalent of 8.4 million times the MGDW: approximately $862,512,000pesos, and two or more economic agents participate, whose assets or annual sales volume in Mexico on an individual or aggregate basis are equal to more than 48 million times the MGDW: approximately $4,928,640,000 pesos.

For reference purposes, as of September 17th, 2019, the foreign exchange rate is $19.36 pesos per US dollar, as quoted by Mexico's Central Bank in the Official Gazette of the Federation (Diario Oficial de la Federación), and the MGDW is $102.68pesos.


Merger control applies in the scenarios and thresholds described above, regardless of whether monopolistic conduct has occurred. This, in turn, may result in antitrust conduct, subject to investigation by the Commission on its own discretionary authority, upon request by the Federal Executive Branch, the Ministry of Economy, the Consumer Protection Agency or upon a third-party claim.

2.6 In what circumstances is it likely that transactions between parties outside your jurisdiction ("foreign-to-foreign" transactions) would be caught by your merger control legislation?

Merger control applies when the transaction, irrespective of the place of execution, results in the direct or indirect amount in Mexico (either as paid-in capital, assets or sales, respectively) being equivalent to the threshold referred to in question 2.4 above.


There are no such mechanisms.


The principles that apply are: the relevant market; free competition; economic competition; identification of the economic agents; effects as a result of the concentration with respect to other competitors; and the commercial relationship between the relevant economic agents. Additionally, and as a general rule, even if a merger takes place in stages, the Commission will consider the thresholds referred to in question 2.4 for each stage.

3 Notification and its Impact on the Transaction Timetable


Yes, notification is compulsory when the thresholds are met, and approval must be granted prior to the implementation of the underlying transaction (for a more detailed deadline schedule, see our response to question 3.5).


Transactions are exempt from clearance even if they exceed the monetary thresholds (please refer to question 2.4) when:

  1. the transaction implies a corporate reorganisation in which the underlying parties belong to the same group of control and no third party is involved in such reorganisation;
  2. a stockholder increases its participation in the capital stock of a corporation in which it has held control since its incorporation or when the Commission has previously authorised the acquisition of such control prior to the capital stock increase;
  3. a trust is involved (for management or guaranty) based on which an economic agent contributes its assets, as long as such contribution is not made for the benefit of any person other than such economic agent or the trustee; however, upon enforcing a guaranty trust, notice applies, taking into account the thresholds mentioned in our response to question 2.4;
  4. transactions related to stocks, shares or trust certificates related to foreign companies which are considered non-residents (for Mexican tax purposes), as long as the underlying companies do not acquire control in Mexican companies or accumulate in Mexico stocks, shares or trusts certificates, or any other asset in addition to those held, directly or indirectly, before the transaction;
  5. the acquirer is an equity investment company and the purpose of the transaction is to acquire shares, debentures, securities, credit instruments or equity participations with proceeds obtained from a public offering of the investment company's stock, except if as a result of the transaction such investment company has a meaningful influence on the decision-making of the relevant economic agent;
  6. in the acquisition of shares, securities, credit instruments or equity participations of any company or in the acquisition of instruments, the underlying assets of which are stocks of a publicly traded company, when the transaction does not allow the purchaser to acquire 10% or more of such assets, and additionally, the purchaser does not have authority to: a) appoint or revoke board members of the issuing company; b) directly or indirectly impose decisions at the shareholders' or partners' meetings or equivalent management bodies; c) maintain ownership of rights that allow them to, directly or indirectly, vote the shares of 10% or more of a company's capital stock; or d) manage, or directly or indirectly influence, the management, operation, strategy or main policies of a company, either through ownership of securities, by contract or otherwise;
  7. they acquire stock, shares or trust certificates or equity participations in one or more investment funds with speculation purposes (portfolio investment) where such funds do not have any investments in companies or assets in which they participate or invest, or where they are employed in the same relevant market with the relevant economic agent; and
  8. in those cases established by legislation.

Originally Published by ICLG.com

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