Structures most often used by foreign investors The forms of enterprise most commonly used by Mexican and foreign investors are the S.A. or its variant, the S.A. de C.V. and, under certain conditions, the S. de R.L. and S. de R.L. de C.V. partnerships.
C.2
Mergers and acquisitions
Mexico’s antitrust law requires that any and all transactions (mergers, transfer of equity) including transactions between related parties, with a value that exceeds the parameters mentioned below, shall be reported in advance to the Federal Competition Commission (CFC): A transaction value of at least 18 million times the general minimum daily wage (GMDM) in effect in Mexico City; (as of 01.01.09 the GMDM was MXN$54.80) If the overall transaction, whether in a single act or a succession of acts, entails the accumulation of 35 % or more of the assets or shares of an economic agent the value of those assets or sales is greater than the equivalent of 18 million times GMDW; or if two or more economic agents take part in the transaction, and whether separately or together:
The value of their assets or annual sales volume is greater than the equivalent of and 48 million times GMDW, and The transaction entails an additional accumulation of assets or capital stock greater than the equivalent of 8.4 million times GMDW
The CFC has 35 calendar days to approve a transaction, forbid it or impose performance conditions. If the Commission fails to respond within the 35 day period, the transaction is deemed authorized. Certain exceptions may extend the response period to more than 35 days. Notwithstanding the aforementioned, an analysis and information may be filed to demonstrate to the CFC that it is notorious meaning that the concentration will not diminish, harm, or obstruct the competency. The CFC has 15 calendar days to approve that a transaction is notorious or else, to forbid it or impose specific performance conditions for its implementing. If the Commission fails to respond within the 15 day period, the transaction is deemed authorized. In the event that the CFC considers that the concentration is not notorious as mentioned in the above paragraph, the CFC will issue a notification to restart the process for obtaining an authorization within the following 35 calendar days. In the event of transactions that result from reorganizations among companies of a corporate group and previous compliance with provisions in the Regulations to the Antitrust Law in Mexico, a post-completion notice shall be filed before the CFC. . At this point is important to mention that new regulations are expected for 2007. In addition, specific provisions of Mexican corporate and tax laws govern mergers and reorganization, including spin-offs. For example, a decision to merge must be made at a special shareholders’ meeting, and the resolutions adopted must be announced publicly in newspapers. Creditors must also consent to the merger. For details regarding tax treatment of certain merger transactions, see Section C.7.
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