1 Relevant Authorities and Legislation
1.1 Who is/are the relevant merger authority(ies)?
As a result of the amendments 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 ("Ifetel"); and (ii) the Federal Economic Competition Commission (the "Commission"). Ifetel 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 Ifetel. 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: (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 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; and (ix) the Federal Tax Code.
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.
1.4 Is there any other relevant legislation for mergers in particular sectors?
There is no relevant legislation for 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
2.1 Which types of transaction are caught - in particular, what constitutes a "merger" and how is the concept of "control" defined?
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, either 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.
2.2 Can the acquisition of a minority shareholding amount to a "merger"?
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, the following transactions are subject to prior notice:
When the transaction, irrespective of the place of execution, 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 $1,314,720,000 pesos. 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 $1,314,720,000 pesos. 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 $613,536,000 pesos, 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...