Corporate M&A 2025 Comparisons

M&A activity in Argentina picked up in 2024 compared to previous years, with the number of deals closed reaching levels seen back in 2017-2019. This higher activity was particularly significant during Q3 and Q4 of 2024.

The main drivers of this trend, all of which helped create a very positive climate for investment, were as follows:

• the successful reduction by the new administration of skyrocketing inflation inherited from the previous government;
• the easing of foreign-exchange regulations;
• adoption of pro-market measures;
• reduction of country risk; and
• improvement in other key economic indicators, with rumours of a possible upcoming broad tax reform.

Reduced interest rates in the US certainly enhanced the already favourable local backdrop. However, regional markets may continue to negatively affect Argentina’s M&A sector. Investors will need to closely monitor the increased risk in neighbouring business partner, Brazil, since regional exits triggered by deteriorating economic conditions there could further drag multinational companies away from Argentina.

The M&A market no longer appears to be concentrating on the exit strategies of foreign investors and multinational companies, unlike a year ago, although last year’s inertia did extend further through 2024, explaining several of the most recent transactions. The market is now focused on investments in strategic sectors, driven by the deregulation brought about by President Javier Milei’s flagship reform bill, Ley Bases, and the RIGI regime (the “Incentive Regime for Large Investments” – a much-celebrated, ambitious initiative intended to attract substantial investment to projects in certain business sectors).

The last 12 months in Argentina have seen a persistent focus on the oil & gas and energy sectors, which represented approximately 30% of deals and 60-70% of deal value.

The RIGI regime, which offers a wide range of stability measures, legal protections and incentives aimed at encouraging large-scale investments, laid the foundations for this hyperactivity. Several projects in the mining (namely lithium and copper), renewable energies and oil & gas upstream and midstream sectors (predominantly in the Vaca Muerta area) have applied to the regime, with the El Quemado solar energy project in the Province of Mendoza, sponsored by Luz de Campo S.A. and YPF Luz, and the project involving the construction of an oil pipeline by the new joint venture Vaca Muerta Oil Sur (VMOS), being the first two projects approved.

The privatisation boom fostered by Milei with respect to over 50 publicly-owned firms was also a significant trend that drew attention from multiple sectors and contributed to buoyancy of the M&A industry. The sale of the government’s interest in IMPSA, a highly-indebted metallurgical company primarily operating in the hydroelectric, wind and nuclear sectors, to an ARC Energy-backed vehicle, was the first privatisation to successfully close in a row of long, delicate and complex processes in which much development is yet to be seen.

Argentina’s renowned human talent, competitive advantages and dynamic scientific community create an environment with high potential for investment and growth in the technology and knowledge-based services sector which has seen some significant activity in recent months. Expected labour law, foreign-exchange and tax reforms reducing the liabilities that negatively affect valuations will be crucial in deepening the sector’s dynamism.

As previously described, oil & gas was among the most active sectors in the past 12 months, with several superdeals made, such as:

• Pluspetrol’s acquisition of some of Exxonmobil’s assets;
• Geopark’s acquisition of oil fields in Neuquén and Río Negro;
• YPF’s acquisition from Equinor of onshore assets in Vaca Muerta;
• the new VMOS joint venture involving YPF, PAE, Pluspetrol, Vista, Pampa Energía, Shell and Chevron; and
• YPF’s sale of mature oilfields to Grupo Pérez Companc, Quintana E&P, Compañía TSB, Bentia Energía-Ingeniería Sima, Velitec and PCR in order to focus on Vaca Muerta.

In the mining sector, particular interest has developed with respect to copper, lithium, gold and uranium projects. In this sector:

• BHP and Lundin Mining have set up a JV in the province of San Juan (on the Argentine-Chile border) to acquire assets in a deal worth over USD3 billion;
• Jaguar Uranium acquired two Uranium (Canada) projects from IsoEnergy;
• Eramet (France) acquired interest in a lithium project in the Salta province;
• CNGR (China) acquired control over a solar project in Salta; and
• Ganfeng Lithium (China) acquired a stake in the Pastos Grandes lithium project, also in Salta.

Notable transactions in the renewables sector included Stellantis’ acquisition of a stake in 360 Energy, as well as the consolidation of players that entered the country during the Macri administration and the Renovar programmes.

In the retail and mass consumer sectors, Newsan S.A., a leader group in the manufacturing and sale of home appliances and consumer electronics announced an exclusive agreement with Procter & Gamble (P&G) for the commercialisation in Argentina of some of its iconic products as part of P&G’s exit plan from Argentina. In the same line, Dreamco S.A. completed the acquisition of P&G’s household cleaning products business in Argentina.

The fintech sector in Argentina continues to set the region’s pace, with pressure building on banks to accommodate the trend. This has led to relevant transactions in the sector, such as: i) the acquisition by Banco Galicia of HSBC Argentina (certainly part of the exit wave); ii) Banco Macro’s acquisition of competitor Banco Itau; and iii) an alliance between Banco Galicia and Santander to provide financing to the agribusiness sector under newly-formed fintech company Nera; and iv) broker-dealer Allaria acquiring an interest in digital bank Banco del Sol from insurance company Sancor Seguros.

The market was recently awe-stricken by crypto giant Tether Investments S.A. de C.V.’s hostile (unsolicited) bid to acquire at least 51% of Adecoagro (NYSE ticker AGRO) in a novel combination of a cryptocurrency foreign company acquiring a publicly listed agroindustrial Argentine company. A transaction agreement was reached with Adecoagro’s Board, with the final steps of the public bid still to be completed.

The main methods for acquiring companies in Argentina are as follows.

1. Purchase of shares – either directly, by acquiring the shares of the target company, or indirectly, by acquiring the shareholding package of the target company’s shareholding companies.
2. Merger and/or spin-off – although the merger is usually a post-acquisition procedure, the acquisition of the target company can also be implemented through a merger and/or spin-off of assets.
3. Sale of assets – the purchase and sale of the desired assets or business units. Parties involved in a sale-of-assets transaction need to be mindful of Law No 11.867 which sets forth a specific procedure for the transfer of commercial and industrial establishments.
4. Capital subscription – the purchase of shares to acquire a company is often accompanied by a cash-in component. The buyer applies funds to the capital of the target company which issues new shares to the buyer.
5. Takeover bid (oferta pública de adquisición, or OPA) – whether voluntary or mandatory, the OPA exists in Argentina for companies with shares listed in public markets. The volume of OPAs in Argentina is lower than in other jurisdictions, and it is not the most common method used for acquisitions.

The main regulators and official tools used in M&A activity in Argentina are:

• Registros Públicos de Comercio (Public Commerce Registers)– used for verifying compliance with the General Companies Law, registering trusts (fideicomisos) and acts performed by companies that are subject to registration according to applicable regulations, and specifically the transfer of social quotas, interest shares, or shares in limited liability companies, general partnerships, simple limited partnerships, capital and industry partnerships, and partnerships limited by shares.
• Comisión Nacional de Valores y Mercados (National Securities and Markets Commission)– responsible for overseeing compliance with General Companies Law, Capital Markets Law, and applicable regulations by companies that publicly offer shares or securities.
• Comisión Nacional de Defensa de la Competencia (National Competition Defence Commission)– responsible for enforcing Competition Defence Law and post merger control.
• Agencia de Recaudación y Control Aduanero, or ARCA (Revenue and Customs Control Agency) – the federal tax authority of Argentina.
• BCRA (Central Bank of Argentina) – responsible for regulating financial entities, including merger control of such entities.

Foreign investors are on equal footing with locals in Argentina except for within some sectors with specific restrictions (media, aviation and ownership of certain pieces of land).

Generally, to become a shareholder of an Argentine company, foreign companies must register with the competent Public Registry of Commerce and with the tax authorities. If a foreign company develops its business on a regular basis in Argentina it must either: i) register a branch there; or ii) set up a local subsidiary by registering its shareholders with the competent Public Registry of Commerce.

Specific restrictions are as follows.

Media

Foreign ownership of media outlet companies (newspapers, journals, magazines, radio, audiovisual and digital producer publishing, internet providers and on-street advertising) is capped at 30% of capital stock and capital stock with voting rights, except for ownership of foreign investors from countries with reciprocity agreements. This restriction may be soon reconsidered, as the Minister of Deregulation and State Transformation of Argentina, Federico Sturzenegger, sent a draft bill to Congress in October of 2024 that included the proposed repeal of the cap for foreigners.

A general ban on foreign investment in broadcasting media precludes foreign investors from obtaining licensees of broadcasting services or participating as shareholders of licensee companies holding broadcasting service licenses. This restriction does not apply to foreign investors from countries with international agreements with Argentina with national treatment or “most favoured nation” clauses.

Aviation

The current Administration’s “Open Skies” (cielos abiertos) policy has repealed and modified a series of regulations with the objective of increasing competition in the sector. Some notable changes that affect foreign investment in the sector are as follows:

• the previous 49% cap on foreign ownership of air transportation services operating domestic flights has been relaxed, with streamlining of the process; however, foreign-owned companies must still undergo a discretionary governmental authorisation process that follows principles of international standards of safety and reciprocity with the country of origin of the foreign capital;
• a foreign-owned company operating domestic flights must be presided over by an Argentine national, and two-thirds of the managing body must be Argentine nationals;
• individuals are no longer required to provide proof of a real domicile in Argentina in order to own an aircraft registered in the country; and
• the National Administration of Civil Aviation has been instructed by the executive branch to establish procedures permitting airlines to request authorisation – subjected to certain safety conditions – to use foreign crew members and/or foreign aircraft to operate domestic flights (this has allowed Flybondi to wet-lease foreign aircraft during the 2025 summer high season).

Rural Land

The Rural Land Law limits ownership of land by foreign persons and entities (defined as control by a foreign person) as follows:

• no more than 15% of land (calculated on national territory and on the territory of the province and county) can be owned by foreign persons;
• foreign persons of the same foreign nationality cannot hold more than 30% of the above-mentioned 15% limit;
• rural land owned by foreign individuals may not exceed 1,000 hectares in core zones or the equivalent surface area as determined by the Interministerial Council of Rural Lands; core zones represent the most fertile agricultural lands of Argentina; and
• foreign persons are prohibited from acquiring riparian land along large and permanent bodies of water.

Foreign investors interested in acquiring rural land that are not included in the exceptions listed hereafter are required to obtain a certificate of approval to purchase the rural land issued by the Office of the National Registry of Rural Land.

Foreigners i) with ten or more years of continuous residency in Argentina; ii) with sons or daughters who are Argentine citizens and have five years of continuous residency in Argentina; or iii) those married to or in a registered domestic partnership with an Argentine citizen for five years and with an equally long continuous residency in Argentina are exempt from the restrictions of the Rural Land Law.

Border Security Zones

Foreigners are generally prohibited from owning or possessing land in designated border security zones. Border security zones are considered sensitive for national security and sovereignty reasons. If a foreigner wishes to acquire land in these areas, they must obtain prior consent from the Ministry of the Interior. Foreign Argentine naturalised persons with less than five years of continuous residency in Argentina, non-naturalised foreign persons, and foreign entities (incorporated abroad or controlled by foreigners) must undergo a cumbersome administrative process considered “exceptional”, requiring them to submit an investment plan in which they must prove the public interest of the project. Naturalised persons with at least ten years of continuous residency in Argentina are also required to undergo an administrative process to obtain an authorisation, but rather than “exceptional” it is considered an “ordinary” process aimed at determining national security is not at risk (ie, by checking for criminal records).

Under the Argentine Competition Act (ACA), certain transactions must be filed for merger control and are subject to the approval of the Argentine Antitrust Commission (AAC). The obligation to submit a transaction to merger control depends both on whether: i) there is a change of control in a company or part of a company with activities or assets in Argentina; and ii) certain thresholds are met.

Both of the following thresholds must be met:

• the aggregate Argentine turnover of the acquiring group and the target, including controlled companies, during the previous fiscal year must be equal to or higher than 100 million Mobile Units (currently ARS67,632); and
• the price of the transaction and the value of the Argentine assets acquired must be equal to or higher than 20 million Mobile Units, or the acquirer has participated in transactions in the same market:
1. during the last 12 months which altogether exceeded 20 million Mobile Units; or
2. during the last 36 months which altogether exceeded 60 million Mobile Units.

Substantial and regular exports into Argentina count as Argentine turnover.

Even if the threshold for business volume is exceeded, the transaction may not be subject to the report obligation if one of the following exemptions of the ACA applies:

• the buyer previously owned more than 50% of the stock in the company to be acquired, and the acquisition will not lead to a change of control in that company;
• the acquisition is one of bonds, debentures, non-voting shares or other debt instruments;
• a single foreign company is acquiring a single Argentine company, the buyer did not previously own any assets or stock in other companies in Argentina (excluding those with residential purposes) and the buyers’ exports to Argentina have not been significant, regular, or frequent during the previous 36 months; or
• the buyer is acquiring companies that have not carried out business in Argentina during the past year, unless the buyer and target’s business activities are the same.

As a general rule, a transaction can be filed before closing or up until one week afterwards. The approval by the AAC of a simple transaction may take between three months to a year. For more complex transactions, it may take upwards of 18 months. In certain circumstances, the CNV may require the bidder to notify the AAC of the offer for its prior approval. This notification must be carried out within seven days of submitting the application for authorisation to the CNV. If the AAC does not approve the transaction before the expiry of the tender offer, the CNV will require the bidder to withdraw the latter.

Labour law in Argentina is notoriously pro-employee. Liabilities that may be found in the due diligence process need to be carefully considered since the materialisation of a labour law liability in a court case will almost certainly lead to an unfavourable ruling for the employer.

Acquirers should carry out a comprehensive due diligence of the target company’s employment structure, including services provided to the target company with regularity, to check for defective registration of worker conditions (contract start date, seniority, benefits, etc), failure to apply collective bargaining agreements, and claims that may arise from service providers that render services to the target company on a regular basis.

President Javier Milei’s “Ley Bases” reform bill (“Bases and Starting Points for the Freedom of the Argentine People”) and its regulation introduced significant changes to labour law that had a positive impact on the M&A market.

• Employment regularisation – introduces a regularisation period and moratorium for unregistered workers, extinguishing criminal actions and debts for companies that comply.
• Repeal of fines – removes penalties related to lack of registration, late payments, and failure to deliver labour certificates.
• Simplified registration – allows electronic storage of labour documents and introduces a single contribution system for small businesses (≤12 workers).
• Extended probation – increases probation to six months, extendable to eight to 12 months via collective bargaining agreements.
• Maternity leave – permits reduction of pre-birth leave to a minimum of ten days, replacing the previous 30-day minimum.
• Discriminatory dismissal – establishes additional indemnity (50-100%), with the burden of proof on the claimant.
• Labour termination fund – allows replacing severance pay with a fund paid by employers.
• Independent workers – recognises “independent worker with collaborators” for up to three workers.
• Contractor employees – the employees of contractors will be considered direct employees of the registering company, limiting mis-registration claims.

As a side note with respect to the tech sector, due to high inflation and foreign exchange regulations, it has been market practice for Argentine companies and start-ups to outsource the hiring of technical roles – mainly developers – to payroll services. Given this type of industry, and the low litigation experienced with respect to this type of freelance employee, the labour contingency is sometimes assessed differently. 

There is no national security review of acquisitions in Argentina, other than the review of acquisitions by foreign investors of media, aviation and ownership of certain land, as previously described (see 2.3 Restrictions on Foreign Investments).

There has been no significant court decision in Argentina in the past three years relating strictly to an M&A deal. However, the following relevant decisions may affect M&A activity.

• In the case of Lacuadra Jonatan c/DIRECT TV Argentina S.A. y otros s/Despido, dated 13 August 2024, the Supreme Court overturned a ruling that had adjusted a labour credit based on the CER mechanism (regulated by the Argentine Central Bank) plus 6% annual interest, with interest compounding at the time the complaint was served, due to high inflation. The Court deemed the decision arbitrary, as it resulted in an outcome considered excessively disproportionate. This ruling holds significance for M&A activity, as it helps mitigate labour-related contingencies, which often deter potential buyers and hurt company valuations.
• On 27 December 2025, the Supreme Court of Justice of the Nation (CSJN), by majority, in Levinas c/Ferrari concluded that the Superior Court of Justice of the City of Buenos Aires (TSJ) is the competent court to hear extraordinary appeals filed before the National Ordinary Judiciary based in Buenos Aires (CABA) regarding rulings issued by the Courts of Appeals in Civil, Commercial, and labour matters. This court will be the body responsible for “concentrating jurisdictional powers related to local and common law and acting as the highest court in cases involving a federal question”. However, the National Ordinary Judiciary based at the Buenos Aires (CABA) appellate court dismissed the CSJN’s decision in a plenary session, arguing that the organisation of judicial power should be decided by the legislative branch of government, and not the CSJN. Amid the uncertainty, appeals are currently being filed following the decision of the CSJN and presenting the alternative appeal as required by the appellate court.
• Since most disputes that may arise in an M&A transaction are of this nature and would be handled by these courts, this change is highly significant as it alters the appellate court for appeals.

Finally, it is worth noting that, in late February 2025, President Milei appointed by decree two judges to fill vacancies in the CSJN and complete the five-member court. In the coming months, we will see how such developments impact the ideological positioning of the CSJN and how they may influence the M&A sector.

On 12 December 2024, the Argentine Securities Commission (Comisión Nacional de Valores) issued General Resolution No 1037. The Resolution provides that it will no longer be mandatory to execute a tender offer when: i) the Federal Government – directly or indirectly – transfers to a private investor its interests, when equal to or lower than 50%, in a controlling entity of a company admitted to the public offering regime included in the energy or gas sectors; and (ii) the purchaser assumes the same position as the seller in a pre-existing shareholder agreement without altering the stake held in the company, which must remain equal to or less than 50%.

On 16 July 2024, the Public Registry of the Autonomous City of Buenos Aires issued General Resolution No 15/2024 seeking to reduce the bureaucratic load and to promote investment and economic development. To do this, the resolution simplifies the procedures and requirements for registering foreign entities before the Public Registry, and eliminates annual information requirements as well as certain local entity requirements. This eases the way for the entry of all foreign investors, including those willing to enter the takeover sector.

It is not customary – though not unheard of either – for a bidder to build a stake in its target prior to launching an offer. The Argentine market for public takeover bids (ofertas publicas de adquisición, or OPAs), whether voluntary or mandatory, is a small one, and there are few cases in which a takeover bid is not the result of pre-existing shareholder agreements or situations. It is rare for a takeover bid to occur in which a third party acquires shares without prior negotiation by the shareholders, or on a hostile basis. In other words, it is neither necessary nor common to acquire a minority stake in a company before obtaining control of it. Instead, it is more usual for a shareholder who does not initially control the company to later gain control through via a takeover.

There are no specific rules or procedures governing stakebuilding strategies. However, if the target is a publicly traded or regulated entity, acquiring a certain percentage of shares – either individually or in coordination with others (as legally defined) – can trigger disclosure obligations and, in some cases, necessitate mandatory offers.

Companies that are not admitted to the public offering regime must first notify the tax authorities of any change in their share capital within ten days of their occurrence (AFIP Regulation 4697).

Additionally, they must record at the Public Registry any transfers of equity interests, partnership interests, or shares in limited liability companies, general partnerships, simple limited partnerships, capital and industry partnerships, and partnerships limited by shares.

Listed companies must report to the National Securities Commission on a monthly basis any changes that occurred during the previous month in their holdings or options to buy or sell shares and/or debt securities convertible into shares of the entity, using the corresponding forms.

Furthermore, any transaction carried out by individuals or legal entities must be reported within ten days if they concern: i) the acquisition or disposal of shares and/or debt securities convertible into the shares of an issuer; ii) the acquisition of options to buy or sell such securities, or to convert negotiable obligations; (iii) the alteration of the structure or composition of their direct or indirect stake in the capital of an issuer by 5% or more, or by gaining more than 5% of the voting rights that can be exercised at shareholders’ meetings.

This is reduced to 2% for issuers that are market operators (General Resolution 1036/2024).

While statutory limitations on the transfer of shares that float in the market may not be possible, the principle of freedom of contract applies for non-listed companies. In this regard, General Corporate Law establishes that the transfer of shares or equity interests may be limited, but not prohibited.

Accordingly, companies can include – and it is common to do so – clauses that provide for rights such as right of first refusal, drag-along rights or tag-along rights. Likewise, in partnerships, provisions may be included regarding the admission of new partners or heirs – either to regulate or limit such admission.

Following the enactment of the Productive Financing Law (27440), Argentina fully adopted ISDA standards, granting full enforceability to contractual solutions within financial derivative agreements. This law, after broadly defining “derivative contracts,” stipulates that its provisions apply to contracts that meet the following criteria:

• they are executed and/or registered within markets authorised by the National Securities Commission (CNV), where settlements occur through a market, clearing house, central counterparty entity, or an institution performing similar functions;
• they are executed and/or registered in markets authorised by the CNV, even if the settlement process does not involve a market, clearing house, central counterparty entity, or an institution with equivalent responsibilities;
• they are executed between domestic and/or international counterparties outside of markets authorised by the CNV, in which case the CNV requires specific registration procedures for such derivatives; contracts in this category will be enforceable against third parties and assigned a definite date upon registration.

As a result, it is crucial that these contracts are either executed or registered within CNV-authorised markets to ensure full applicability of the Productive Financing Law.

In line with the provisions of the Productive Financing Law, the CNV, as the controller and enforcement authority of the regulatory regime, issued Resolution 775/2018 governing the Registry of Derivatives Operations that the markets must carry out for the registration of non-standard derivative contracts, carried out bilaterally with the intervention of entities under the jurisdiction of the CNV and/or agents registered with it, as well as the content and minimum data that such registries must contain and the obligations that fall on the entities under the jurisdiction of the CNV and the agents registered with said Agency in the matter.

Resolution 775/2018 establishes that the so-called Derivatives Operations Registration Entities or, in their absence, the markets and/or clearing houses must keep a record of the derivatives contracts and repurchase agreements entered into bilaterally outside the scope of authorised markets. To this end, they must include the recordable data grouped by type of contract and underlying asset required in each case. The record must contain, at least, the following data: date, tax ID the parties involved, indication of buyer/seller (for swaps, refer to the underlying asset), type of contract, underlying asset, face value, settlement currency, amount, term, expiration date and applicable jurisdiction.

The entities in charge of the registry must enable access that allows the information to be sent remotely with the security measures that it deems most appropriate to guarantee its authenticity. Said registry must guarantee the confidentiality, integrity and protection of the information they receive. The information involved must be kept by the entities in charge of the registry, for a period of ten (10) years.

The entities in charge of the registry must authorise the parties to a contract to access the information corresponding to the execution, modification (of amount or term), final settlement and termination of said contract, and to correct it without delay. The record of registration sent to the parties involved by the entities in charge of the registry will be sufficient proof of the effective registration of the contract for the purposes of effectiveness against third parties and the record of the existence of a certain date of the same.

The Resolution outlines registration duties for derivative contracts and bilateral repos. CNV-regulated entities and agents must report contract execution, modification, settlement, or termination to register entities by the next business day. Non-CNV entities may register contracts within five business days if the counterparty is solvent. One party must be designated for registration. Argentina’s 2018 regulations ensure enforceability of close-out netting, protecting derivative transactions against third parties and insolvency, provided they are conducted within CNV-authorised markets.

For listed companies, the regulations of the National Securities Commission establish that a public takeover bid must include the purpose of the acquisition, explicitly stating the bidder’s intentions regarding the future activities of the affected company.

Where applicable, it must also include potential plans for the use of the affected company’s assets, any changes concerning its governing bodies, modifications to its bylaws, and initiatives related to the trading of the company’s securities.

Non-Publicly Listed Companies

For non-publicly listed companies, transactions must be disclosed once definitive agreements are signed. Regulatory approvals from bodies such as the Argentine Antitrust Commission (AAC), the Argentine Central Bank (BCRA), or the National Communications Entity (ENACOM) are obtained after closing, meaning deals are finalised subject to receiving the necessary clearances (ad referendum of approval).

Publicly Listed Companies

The Board of a publicly listed company must immediately inform the National Securities Commission (CNV) of any event or situation that could significantly impact the placement or trading of its securities. This obligation arises from the moment a public offering of negotiable securities is requested and extends to administrators and supervisory body members.

Despite this requirement, parties typically maintain confidentiality during negotiations and disclose transactions only upon executing definitive agreements. This practice aligns with CNV reporting obligations for individuals or legal entities acquiring or selling shares in a publicly listed company when the transaction results in a change in ownership affecting the control group.

Additionally, any individual or entity acquiring or selling shares representing 5% or more of a publicly traded company’s voting rights must immediately notify the CNV and provide the necessary documentation. 

The market practice on timing of disclosure generally does not differ from legal requirements, subject to the delay of disclosures where a matter is kept temporarily confidential. CNV rules recommend that the CNV be consulted for guidance where disclosure is not made or delayed.

In Argentina, the legal due diligence process for negotiated business combinations follows a generally standard approach. The review typically covers key aspects such as assets, charges and liens, material contracts, employment matters, shareholder agreements and rights, ongoing or potential litigation, intellectual property, licenses and permits, company structure, tax filings, and other relevant business matters. Whenever possible, information provided by the seller is cross-checked against public registers and other publicly available sources to ensure accuracy.

Although, some years ago, the market tended to request full due diligence reports, the trend has changed in recent years and red-flag due diligence reports are now usually sought due to the need to cut down on time and costs of the process.

Notwithstanding the peculiarities of each industry, in Argentina, the analysis of labour, litigation, contractual, corporate, anti-corruption and regulatory risks are essential to any type of due diligence report. In recent years, environmental risk has seen a more detailed and in-depth analysis.

Exclusivity agreements on “no-shop” clauses are frequently demanded by buyers and typically included in confidentiality agreements and letters of intent at a very early stage in an acquisition process to give potential buyers time to conduct due diligence and negotiate definitive agreements with the sellers without any competition from other potential buyers.

Standstill agreements, on the other hand, are less frequent in the domestic M&A market, since acquisition of public companies is very modest due to scarce foreign direct investment in Argentina. Standstill agreements typically seek to prevent pressure from activist investors or aggressive bidders pursuing hostile takeovers by preventing such actors/potential buyers from accumulating shares in the target, or voting such shares in specific manners, for a period of time extending even after the deal has failed (to block vulnerabilities raised during due diligence).

Tender-offer terms and conditions for shares in companies subject to the public offer regime must be set down in a prospectus. The prospectus must include all documentation required by applicable regulations so that the potential seller can make an informed decision.

The length of the process will be determined by the scope of the due diligence, type of transaction, industry and corporate form.

An acquisition of the total shareholding of a company that is not subject to the public offering regime and that does not present major complications can take between three and nine months. Usually, the due diligence report is ready within the first three months. The remaining timing will depend upon the ability of the parties to reach an agreement.

However, if the transaction involves a financial institution or a regulated entity, approval by the various regulators will be required, and this could extend the deal process. 

In the case of having to agree on a joint venture and the partial sale of the shareholding package, the need to regulate the relations between the parties and the operation of the business will necessarily take longer.

For listed companies, public tender offers apply in the following scenarios.

1. Acquiring control– a party must launch a tender offer to acquire 100% of a target company’s shares when, either directly or indirectly and in a single transaction or through successive transactions within a 90-day period, the party intends to gain control of the company, ie, acquiring control over 50% of the votes of the company or being capable of controlling the company’s shareholders’ resolutions, even without controlling 50% of the votes.
2. Acquiring a significant interest – when any party (regardless of it being a shareholder prior to such acquisition/s) intends to obtain an interest equal to or above 35% of the target company, provided that this potential stake grants the purchaser actual control of the target company, the purchaser is required to launch a mandatory bid to acquire at least 50% of equity interest in the target company.
• Indirect or subsequent transactions (sobrevinientes)
1. when the acquired or merged entity is a holding company or primarily owns shares in the target company, a tender offer is required only if the transaction leads to the acquisition of either control (a) above) or a significant interest (b) above).
2. in all other situations, the tender offer becomes mandatory if the transaction results in obtaining 51% or more of the target company’s shares provided that, if the deal corresponds to a merger, the offer covers 100% of the target’s shares and if it corresponds to an acquisition, it covers at least 75% of the shares.

Note that “indirect mergers” as used herein do not necessarily imply forward triangular or reverse triangular mergers.

The obligation to launch a mandatory tender offer will not apply in the following cases.

• Acquisitions carried out by financial trusts (Law No 24,441), or similar legally established institutions, resulting from awards granted by the Central Bank or Argentina or the National Insurance Superintendency, in compliance with the rules of publicity and competitive bidding established by applicable regulations. This exclusion extends to indirect acquisitions, regardless of the percentage of significant interest acquired, when the competent supervisory authority deems it necessary. The exclusion does not apply to subsequent transfers made by the awarded entities.
• Acquisitions carried out under an expropriation law or other actions derived from the exercise of public authority powers as established by current regulations.
• Cases where all shareholders of the company involved unanimously agree to sell or exchange all shares representing the company’s capital.
• Acquisitions resulting from the reorganisation or restructuring of economic sectors, as approved by the National Government.

Cash has tended to be the predominant form of consideration when acquiring/selling a business. However, certain transactions by public companies have incorporated an in-kind component, replacing currency with stocks, including the following.

• Pampa Energía/EDENOR/EDELCOS – Pampa Energía sold its 51% stake in EDENOR to EDELCOS for a mix of consideration, including the transfer of Class B shares of EDENOR (in-kind payment), an upfront payment in cash, and a cash payment contingent on profits generated.
• Banco Galicia & Grupo Financiero Galicia (GFG)/HSBC Argentina – GFG, a publicly traded entity, partially funded its acquisition of HSBC Argentina by issuing and transferring its own ADRs as part of the payment.
• Columbus/Banco Valores – Columbus shareholders consented to a merger with Banco Valores, a publicly traded bank, where they received shares in Banco Valores rather than a cash payout.

Some of the common tools seen in Argentina used to bridge value gaps between the parties in a deal environment with high valuation uncertainty are the following.

• Earn-outs, usually deferring payment tied to the agreed financial metrics of target companies – successive one-year earn-out periods for a two-to-five-year term post-closing are common.
• Instalment payments – the interest rate may be added or can be priced in ex-ante.
• Rollovers by management – a mix of cash and equity of the acquired target is sometimes offered to sellers. Ratchets that track post-closing performance may be a part of the mix and help both sides to bridge valuation gaps.
• Sale of minority stakes – coupled with a call option in favour of the buyer at a value to be based on financial metrics observed prior to exercise of the option and once the buyer has been involved in the management of the target company.

In Argentina, tender offers are the primary method for acquiring control of a publicly traded company. The offers can be either mandatory or voluntary, with key differences in their purpose and conditions.

Mandatory Tender Offer Conditions

As previously explained, a mandatory tender offer is required when an investor acquires control or a “significant interest” in a public company, and in cases of de-listings. Mandatory tender offers must be unconditional, and the bidder cannot impose any conditions on the offer.

Voluntary Tender Offer Conditions

A voluntary offer is initiated by a bidder without legal obligation to do so and with no requirement on the number of shares to be potentially acquired. Voluntary offers can be made with or without the co-operation of the target’s board and may include conditions, such as a minimum acceptance threshold or regulatory approvals. The CNV, acting as the regulator, must approve any conditions to ensure they are fair and transparent.

With respect to voluntary tender offers, Argentine laws do not require a minimum percentage of stock at which the target company must accept the bid, and bidders may freely set the minimum acceptance threshold. However, CNV rules do not allow pre-conditions other than an acceptance threshold.

Mandatory public tender offers for the acquisition of shares of companies under the public offer regime cannot be conditional on the bidder obtaining financing. These types of offers must be irrevocable during their term of duration.

Notwithstanding the above, we note that a bidder must secure its offer using cash, securities, or a financial entity’s guarantee and must demonstrate to the CNV that the guarantee is valid and sufficient.

In a specific squeeze-out method using what is called a Declaración Unilateral de Voluntad de Adquisición, or DUVA (see 6.10 Squeeze-Out Mechanisms), once the CNV approval is obtained, the controlling shareholder issuing the unilateral statement must deposit the necessary funds in a special account at a local financial institution to acquire the remaining shares at a fair price. The amount may exceed the proposed price, which is open to challenge by shareholders regarding its fairness and reasonableness.

Deal-protection and cost-coverage solutions used in M&A transactions to shield transactions from competing third-party bidders are permitted in Argentina, and including the following: 

• confidentiality or non-disclosure agreements;
• no-shop clauses;
• non-solicitation clauses;
• break-up fees (penalty payable by target company) or reverse break-up fees (penalty payable by buyer) – although their inclusion is not market-standard;
• matching rights; and
• MAC clauses.

Among the recent changes to the regulatory environment that may impact the length of interim periods in Argentina, we highlight Resolution 905, published on 18 May 2023 by Secretariat of Commerce, introducing a new Regulation for Merger Notification. A significant change is the implementation of a summary procedure (PROSUM) for mergers which are less likely to negatively affect competition. This procedure streamlines the approval process, potentially reducing the interim period before closing.

In such cases, it is convenient to obtain the right to veto certain corporate resolutions that would otherwise be passed by a simple majority of the governing body (Assembly), such as the approval of amendments to the bylaws, variation in capital stock, issuance of shares, change of purpose or the appointment of authorities.

Furthermore, buyers may obtain the right to appoint a certain number of members of the management body or of the controlling body.

When appointing its own board members, it is advisable to establish mechanisms that allow certain relevant decisions not only to be adopted by majority vote but also to require the vote of the directors appointed by the acquiring party. For instance, the approval of annual financial statements, obtaining loans, executing certain contracts and/or granting of powers of attorney may require the signature of board members of the acquiring party.

Voting by proxy at shareholders’ meetings is authorised both for private companies and companies authorised to operate under the public offering regime. Proxies may be general or special.

In the case of board meetings, the position is considered to be non-transferable (intuito personae) and the director may only authorise another director to vote on their behalf if the quorum is still reached without them. In other words, voting by proxy is authorised with the limitation that the proxy must be granted to another member of the board of directors who participates in a meeting with sufficient quorum. If the proxy is not a member of the board of directors, they should not be authorised to participate in the board meeting, otherwise the resolutions adopted at such meeting shall be null and void.

Argentina has squeeze-out mechanisms in place for tender offers, which are available when a shareholder has obtained 95% or more (referred to as quasi-total control) of the outstanding shares of the publicly-listed target company. In such case, the acquiring shareholder may either:

• launch a simplified tender offer to acquire the residual shares (within a short period of time following approval by the National Securities Commission (CNV)); or
• implement a DUVA procedure by which the acquiring shareholder must unilaterally: a) file with the CNV a fair-market price valuation with a public disclosure of interest in an additional acquisition; ii) deposit the purchase price (assessed by the acquirer in its fairness valuation) in escrow; and iii) issue a unilateral public deed.

Argentine law also grants sell-out rights to minority shareholders who can request that the majority shareholder buys their shares under similar conditions.

Irrevocable commitments are not common in Argentina, due to the absence of a well-developed takeover market.

Public tender offers may be voluntary or mandatory. Public tender offers are mandatory when, individually or through joint action, a controlling interest in a company with shares admitted to the public offer regime is achieved.

A controlling interest is considered to exist when a percentage of voting rights equal to or greater than 50% is reached, directly or indirectly, or when a percentage of less than 50% is reached but corporate decision-making is possible.

The OPA requires prior authorisation from the CNV. Once the offer is authorised by the National Securities Commission, the offeror must publish a prospectus which must be accepted or rejected by the other shareholders within a term of not less than ten business days and not more than twenty business days.

The prospectus must be comprehensive and contain complete information regarding the offeror and the offer itself. The information that must be provided regarding the offeror includes the following:

• identifying details and registered office;
• description of the acquiring business group;
• details of the securities of the target company held, directly or indirectly, by the offeror, its affiliated entities, other individuals or entities acting on behalf of the offeror, or those acting in concert with the offeror;
• members of its administrative bodies;
• Any agreements, whether express or implied, between the offeror and other shareholders of the target company or with members of the administrative body of the target company; and
• information regarding the nature of its business activities and financial situation, including financial statements for the last two (2) fiscal years.

With respect to the terms of the offer, the following must be identified, among other aspects:

• the securities covered by the offer;
• the consideration offered for the securities;
• valuation conducted by an independent appraiser;
• date of issuance of the offer and the acceptance period; and
• formalities that the recipients of the offer must comply with to express their acceptance, as well as the manner and timeframe in which they will receive the consideration.

Additionally, the offeror must specify the purpose of the acquisition, explicitly stating its intentions regarding the future operations of the target company.

Whether the companies are admitted to the public offer regime or not, the amount of information to be provided will depend on how the transaction is set up. In a public tender offer, all the information indicated in 7.1 Making a Bid Public must be provided to the National Securities Commission.

Mergers or spin-offs must be approved and registered in the Public Registry. For this purpose, corporate background information, financial statements, consolidated financial statements and the presentation of the definitive merger/spin-off agreement will be required.

In the case of the acquisition of shares of limited liability companies, partnerships, limited partnerships, limited partnerships with capital and industry and limited partnerships by shares, the transfer must be registered in the Public Registry, together with the transfer documents.

Finally, in the case of corporations that are not admitted to the public offering regime, no public registry must be informed, unless the specific industry requires it.

In all cases, the tax authority and the authority of control corresponding to the industry that so requires it must be informed.

Within the framework of a public tender offer, information regarding the economic and financial situation of the offeror company for the last two fiscal years must be provided to the National Securities Commission and in the offer prospectus, with identification of its net worth, turnover, total assets, indebtedness, results, and express reference to any relevant qualification or indication contained in the external audit reports in relation thereto. It must also provide information on its financial and commercial prospects. If applicable, such information must refer not only to the offeror company but also to the financial statements of the controlling company.

If the transaction is set up as a merger and/or spin-off, special merger and consolidated merger financial statements must be produced and must be filed with the Public Registry of Commerce.

In the case of a public takeover bid or OPA, the documents specified in 7.1 Making a Bid Public must be submitted and included in the offer prospectus.

For mergers and/or spin-offs, only the final merger agreement must be submitted, including the special and consolidated financial statements for the operation.

In all other cases, it is not necessary to submit additional transaction documents, except in specific cases where the particular industry requires it.

Directors owe a duty of loyalty to the company and its shareholders, and must act with “the due care of a good businessman”.

Directors are personally and without limit liable to the company, the shareholders and third parties for mismanagement, violation of the law or the bylaws, and for any other damages caused by the director’s fraud, gross negligence or abuse of authority.

To be released from any such liability, a director must promptly file written objections to the corporate resolution which caused the damage and either give notice of it to the relevant officials or file proceedings challenging the decision.

In addition to civil liability (for which damages is the available remedy), criminal liability can apply where directors’ actions fall under the category of criminal offences.

Civil liability is presumed once the damage arising from the directors’ decision is evidenced, unless the director proves otherwise.

However, for criminal liability, the director’s guilt must be proved by the prosecutor in a criminal trial.

It is not a standard practice to establish special or ad hoc committees in business combinations.

With respect to other types of committees, an audit committee is mandatory for companies that publicly offer their shares. The creation of other types of committees is commonly used in companies with widely dispersed share capital and a need for specialised bodies. They are also frequently implemented in joint ventures and other cases requiring specialised governance structures. In such cases, the purpose of these committees is to allow shareholders to maintain some level of control over specific business units.

It is worth noting that the General Corporate Law allows the bylaws of corporations to establish executive committees within the Board of Directors. These committees may only be composed of Board members. However, the creation of executive committees does not alter the obligations and responsibilities of the Board members.

Since takeovers are very rare in Argentina, there is no substantive case law with respect to the board of directors in takeover situations.

In Argentina, unlike in other markets, although the Board of Directors is the body formally responsible for deciding to proceed with an acquisition, sale, merger, or other type of transaction, in most cases such transactions are carried out following instructions from company shareholders.

However, these types of transactions typically do not proceed without the involvement of external accounting, financial, and legal advisors to mitigate potential liabilities.

These external advisors work closely with the company’s internal teams to assess the terms, risks, advantages and disadvantages of the potential transaction. That said, in practice, it is usually the shareholders who ultimately decide whether to move forward with a deal.

In Argentina, shareholder involvement in the company’s affairs is common. In practice, the roles of shareholders and directors are often blurred, along with their respective interests. It is not uncommon to see board members who also hold shares in the company or, conversely, “nominee directors” – individuals who occupy a board position merely to comply with regulatory requirements.

In the case of nominee directors, board decisions are typically made following shareholder instructions rather than based on an independent analysis of opportunity, merit, or convenience.

Due to these dynamics and potential conflicts of interest, it is common to see liability claims against the board in cases of insolvency or shareholder disputes.

It is important to highlight that, under General Corporate Law, directors are personally, jointly, and unlimitedly liable to the company, its shareholders, and third parties for mismanagement, violations of the law, the company’s bylaws or regulations, and for any damages caused by fraud, abuse of authority, or gross negligence.

However, the burden of proof lies with the party alleging the damage, making evidence-gathering a critical stage in these proceedings.

Hostile bids are permitted under local law. However, public companies in Argentina typically have a small percentage of their capital publicly traded, with the majority held by a limited group of shareholders, thus preventing activism and making hostile bids ineffective and uncommon.

Even though there are no explicit rules on defensive strategies against hostile bids, directors might use certain defensive measures, provided that they owe a duty of loyalty to the company and its shareholders and must act with “the due care of a good businessman”. Therefore, they should seek what is best for the company instead of their personal benefit. It should be considered that civil liability may apply when damage arises because of the directors’ actions.

CNV rules provide that, if a hostile takeover attempt is made, the board must: i) assess whether the offer price is fair and advise shareholders on whether to accept or reject it; ii) remain neutral and continue regular business operations without deviation; and iii) share any relevant company information that could influence shareholder decisions.

CNV rules expressly establish that when a public tender offer has been launched, the board must refrain from:

• approving the issuance of shares, bonds of any kind, and other securities or negotiable instruments that grant the right to subscribe or acquire them, except when executing prior specific agreements authorised by the shareholders’ meeting;
• directly or indirectly carrying out transactions involving the securities affected by the offer with the intention of disrupting it; and
• proceeding with the sale, encumbrance, or lease of real estate or other company assets when such actions could frustrate or disrupt the public offer.

Although defensive measures are uncommon due to the scarcity of hostile bids in Argentina, the directors of a target company would typically aim to challenge the offer price, delaying regulatory approval and creating the opportunity for private negotiations with the bidder – provided that, as previously explained, they are careful to avoid selling or pledging the assets of the company to affect the bid and issuing shares with post-bid shareholder approval.

Directors owe a duty of loyalty to the company and its shareholders and, as mentioned, must act with “the due care of a good businessman”.

In addition to civil liability (for which damages constitute the available remedy), criminal liability can apply where directors’ actions fall under the category of criminal offences. Civil liability is presumed once the damage arising from the directors’ decision is evidenced, unless the director proves otherwise.

However, for criminal liability, a director’s responsibility must be proven by a prosecutor in a criminal trial.

Directors should not “just say no”, and it must be considered that they will be liable for any damages arising from their actions.

Litigation is not common in M&A deals in Argentina.

Though very rare, if litigation occurs with respect to M&A deals, it tends to occur post-closing, upon a breach of contract by one of the parties involved in the transaction.

Failed transactions are uncommon, and legal disputes arising from them are even rarer. When deals do fall through, parties typically resolve issues through negotiation rather than litigation, as the costs and complexities of formal disputes often outweigh the benefits.

Shareholder activism is not an important force in Argentina. As previously explained, securities markets operate with less liquidity, which reduces the appetite of activists who may struggle to sell the shares they accumulate. Also, there is a lack of activists operating in the region, and therefore in Argentina, since Latin America is diverse and complex, with markets varying in size and legal frameworks, which means potential activists have to acquire specialised knowledge of a target’s market.

A lack of activism in Argentina implies activists are seldom seen encouraging companies to enter into M&A transactions, spin-offs or major divestitures.

It is rare for activists to attempt to interfere with the completion of announced transactions in Argentina. Given the scarcity of public M&A, shareholder activism is not a significant threat, and much of regulatory control takes place ex post, meaning that transactions are undertaken subject to such approval. As a result, any interference with the completion of announced transactions, if it occurs, typically comes from the regulators.