Main Legislation

In Mexico, the relevant merger control legislation is currently the Federal Economic Competition Law (FECL) and its regulatory provisions. However, pursuant to the constitutional amendment to Article 28 published on 20 December 2024, a new legislative framework will be implemented. As part of this reform, a new competition law is expected to be enacted between May and August 2025, which will replace, or at least substantially amend, the existing FECL and establish the detailed legal regime applicable to the authority and its functions, including merger control and investigative procedures (New Law).

This report is based on the current Federal Economic Competition Law (FECL) and its applicable regulations, as the new competition law resulting from the constitutional reform of December 2024 has not yet been enacted. Therefore, all analysis and references contained herein reflect the legal framework currently applicable.

Secondary Legislation

The Federal Economic Competition Commission (Comisión Federal de Competencia Económica, or COFECE) and the Federal Telecommunications Institute (Instituto Federal de Telecomunicaciones, or IFT, and together with COFECE the “Authority”) have issued Guidelines for Notification of Concentrations and the Technical Criteria for the Calculation and Application of a Quantitative Index to Measure Market Concentration.

However, as mentioned above, given that a New Law is expected to be enacted in May 2025, it is anticipated that new guidelines and technical criteria will be issued to align with the updated legal framework.

There is no additional legislation specifically applicable to merger control in Mexico. However, in the oil and gas industry, there are certain additional regulatory requirements when an economic agent owns or acquires a shareholding interest in companies active in different portions of the downstream segment.

Also, the Foreign Investments Law requires that transactions related to certain restricted sectors or that meet the monetary thresholds must initiate an authorisation process. The law is very lax; however, only a few sectors are restricted and the monetary thresholds are high.

Pursuant to the constitutional amendment to Article 28 published on 20 December 2024, the structure of competition authorities in Mexico was fundamentally reorganised. Previously, two independent agencies were responsible for competition matters: the Federal Telecommunications Institute, which oversaw transactions in the broadcast and telecommunications sectors, and COFECE, which supervised all other markets. Depending on the relevant sectors involved and the existence of government concessions related to broadcasting and telecommunications, certain transactions could require notification to both authorities.

Following the amendment, the Federal Executive Branch, through a newly established authority, is now expected to be mandated to prevent, investigate, and combat monopolies and anticompetitive practices, as well as other restrictions on the efficient functioning of markets, in accordance with the Constitution and applicable laws. This new authority will be a decentralised public body within the Federal Public Administration, sectorised under the Ministry of Economy, endowed with its own legal personality, assets, management autonomy, and technical and operational independence.

Additionally, there are specialised tribunals in case transactions or investigations end up in litigation before the Mexican judicial branch.

Compulsory Notification

If a transaction meets any of the monetary thresholds set forth in the FECL (see 2.5 Jurisdictional Thresholds), the transaction must be notified to the Authority.

Voluntary Notification

The FECL includes the option to submit a voluntary pre-merger filing, which is normally used in transactions where it is not clear if the thresholds are met and to ensure that the enforcers will not investigate the transaction later.

Exemptions from Compulsory Notification

The FECL includes the following seven exceptions to compulsory notification:

• internal corporate restructuring with no third parties involved;
• a controlling entity (that has had control since the incorporation of the target or since the antitrust authorities authorised such acquisition) increases its participation in the controlled entity;
• the incorporation of management, guarantee or any other kind of trusts to which an undertaking contributes assets, shares or interest without the purpose or necessary consequence being the transfer of said assets, shares or interest to a company other than both the settlor and the corresponding fiduciary institution;
• the transaction involves shares or partnership interests of foreign entities, as long as the participating undertakings neither acquire control over Mexican entities nor accumulate in Mexico shares, partnership interests, participation in trusts or assets in general additional to those already owned (directly or indirectly);
• the acquirer is an investment company (sociedad de inversion de renta variable) and the purpose of the transaction is the acquisition of securities in the stock markets, unless the outcome of the transaction allows the acquirer to acquire decisive influence over the target; and
• the concentration involves transactions in the stock exchange not exceeding 10% of the capital stock of the issuer and the acquirer is not entitled to:
1. appoint or revoke managers, directors, or board members;
2. directly or indirectly impose decisions in shareholders’ meetings or other equivalent corporate bodies;
3. directly or indirectly maintain any interest that would allow it to exercise 10% or more of the voting rights; or
4. directly or indirectly influence the administration, operations, strategy or principal policies of the target.

In Mexico, there is a penalty for failing to notify when the transaction triggers any of the Mexican thresholds. The penalties for failing to notify range from MXN565,700 (approximately USD28,908) (all figures in US dollars hereinafter consider an exchange rate of MXN19.5688 per US dollar) up to 5% of the total income in Mexico for the previous fiscal year. It is worth noting that the fines are imposed on each of the undertakings that carried out the transaction. Additionally, Mexican law contemplates recidivism, which can double any future sanctions within ten years of the first sanction.

These penalties are applied frequently in Mexico. A list of recent fines imposed by the Authority for failure to notify can be found in 2.13 Penalties for the Implementation of a Transaction Before Clearance.

A transaction must trigger any of the three Mexican economic thresholds (see 2.5 Jurisdictional Thresholds) for the Authority to review said transaction. However, internal restructurings or reorganisations in which no third party is involved are exempt from the obligation to notify.

In Mexico, a transaction would not be notifiable where there is no acquisition of Mexican assets or shares or no price allocation for the Mexican portion, given that all the thresholds are monetary-based and not specifically related to control. However, the Authority has recommended adopting a conservative standpoint and notifying any transaction in which there are doubts concerning the thresholds, as well as other joint ventures (particularly among competitors).

In Mexico, the obligation to notify a transaction is purely based on monetary thresholds, regardless of whether the acquirer gains control. Thus, minority acquisitions can trigger a Mexican pre-merger control filing as long as one of the monetary thresholds is met.

Mexican law and its regulatory provisions do not contemplate a definition of control. Nonetheless, the Supreme Court has defined control as the capacity to exert a decisive influence or control over other undertakings when it comes to acting in the markets, either as a result of legal acts or based on facts.

In Mexico, there are no specific thresholds applicable to a particular sector. In this respect, the Mexican thresholds are as follows.

• Price Allocation: If there is a specific price allocation for the Mexican portion (including for tax purposes), the amount of such price is equal to or higher than MXN2,036,520,000 (approximately USD104,069,744).
• Size of the Target: A transaction must involve (i) the acquisition of 35% or more of the assets or shares of an entity (ii) whose sales or assets in Mexico are valued at more than MXN2,036,520,000 (approximately USD104,069,744). Both parts of the second threshold must be met for a transaction to be notifiable in Mexico.
• Size of the Parties: A transaction must involve the acquisition of:
1. assets or capital stock with a value greater than MXN950,376,000 (approximately USD48,565,880); and
2. the undertakings involved in the transaction must have assets or sales in Mexico that (jointly or separately) amount to more than MXN 5,430,720,000 (approximately USD277,519,316).

Both parts of the third threshold must be met for a transaction to be notifiable. Regarding the first part of this threshold, if the transaction only implies the acquisition of a certain percentage of the target, this percentage must be applied to the total Mexican assets or capital stock (eg, 20% of the total Mexican assets or capital stock should be greater than MXN950,376,000).

General Assessment of Jurisdictional Thresholds in Mexico

In terms of the price allocation threshold, the value of the Mexican portion must be included in the transaction documents or determined in any tax documents related to the transaction. If there is no price allocation for the Mexican portion, this threshold will not apply, and the other two must be assessed instead.

For the size of the target threshold, the transaction must imply the acquisition of 35% of the assets or shares of an entity and its direct or indirect Mexican sales or assets must have a value above the second part of the threshold.

For the size of the parties’ threshold, the first part of the threshold refers to the assets or capital stock being acquired in Mexico. Thus, if the transaction only implies the acquisition of a certain percentage, such percentage should be applied to the total assets or capital stock to determine if the first limb of the threshold is met. Regarding the second part, the Mexican sales or assets of all parties involved ‒ namely, seller, target and buyer (as applicable) ‒ must be considered.

Assets Considerations

In terms of assets, the value to be considered is either the asset value expressed in the balance sheet or the fair market value (whichever is higher).

Sales Considerations

The sales to be considered in the threshold analysis are Mexican sales, which can be carried out by a Mexican or foreign entity.

For a sale to qualify as a Mexican sale, the sale should be invoiced in Mexico, to a Mexican customer, or made by a Mexican entity to national or foreign customers. Also, the sales of third-party distributors that are not part of the distribution network of the entities involved in the transaction should not be considered in the thresholds analysis.

Exchange Rates for Assets and Sales Expressed in Other Currencies

For the conversion of US dollars to Mexican pesos, the exchange rate that should be used is the lowest exchange rate published by the Mexican Central Bank in the preceding five days counted from the date on which the transaction will be notified. The exchange rate can be reviewed under the column titled “Para pagos”. Where the sales or assets are shown in a currency other than US dollars, any exchange rate indicator that reflects the value of the Mexican currency regarding the foreign currency in question can be used.

The entities to be considered in the Mexican thresholds will depend on the specific threshold being analysed. When it comes to the size of the target threshold, the parties will only have to consider the Mexican sales or assets of the target.

In terms of the size of the parties’ threshold, the parties involved need to consider the Mexican capital stock or asset value of the target for the first part. However, the second part of the analysis contemplates the Mexican assets or sales of all parties involved in the transaction ‒ ie, seller, buyer and target (as applicable).

With respect to changes in the business, it is important to note that these should not affect the assessment, as Mexican law requires that only the financial information from the audited financial statements of the most recently completed fiscal year be considered. Accordingly, if a business was divested or acquired, the corresponding financial figures must be excluded or included in the threshold analysis, as applicable.

In Mexico, there is no explicit local effects test for foreign-to-foreign transactions. However, the Mexican thresholds imply the necessity of a certain local presence through either the acquisition of Mexican assets/capital stock or the existence of Mexican sales. Hence, a foreign-to-foreign transaction could trigger a Mexican filing if it implies the acquisition of Mexican capital stock/assets or where the parties’ Mexican sales exceed the threshold.

Based on the foregoing and the Mexican thresholds, a filing would not be triggered if the target has neither Mexican sales nor assets/capital stock.

It is important to note that in Mexico, all thresholds are monetary-based, meaning there are no thresholds based on market share.

Joint ventures are subject to merger control and the general thresholds apply. Joint ventures can qualify as a transaction subject to merger control if they involve the union of two or more undertakings to jointly carry out economic activities either contractually or through a vehicle with legal personality ‒ in the latter case, through which said agents will make contributions and participate jointly in the profits and losses.

Mexican antitrust enforcers have a one-year statute of limitations to investigate transactions that fell below the notification thresholds. However, if a transaction met any of the applicable thresholds and the parties failed to notify it, the enforcers have up to ten years to initiate an investigation.

In Mexico, all transactions that trigger a Mexican filing must not be closed until the Authority authorises the transaction. In fact, Mexican competition law requires the parties to include a clause in the transaction documents suspending the closing until clearance is obtained.

As mentioned in 2.2 Failure to Notify, Mexican competition law sets forth a fine ranging from MXN565,700 (approximately USD28,908) up to 5% of the income generated in Mexico for the previous fiscal year for failing to notify or implementing the transaction before obtaining clearance. This fine is applied to each of the undertakings involved in the transaction.

These penalties are in many cases related to foreign-to-foreign transactions. For reference, here are some of the recent fines imposed by the Authority for failing to notify.

• In 2023, Engie, Sonate Bidco and Veolia Environment were sanctioned with fines totalling MXN11,029,331 (approximately USD563,618).
• In 2023, HP, Inc. and Plantronics, Inc. were sanctioned with fines totalling MXN 61,580,800 (approximately USD3,146,887).

No exceptions to the suspensive effect are set forth in Mexican law.

As a general rule, parties are not permitted to close a transaction before obtaining clearance in Mexico. However, it is possible to implement carve-outs involving the business, assets, or entities located in Mexico, allowing the global transaction to proceed while the pre-merger filing remains pending before the Mexican authority.

That said, COFECE tends to view these alternatives with caution and has, in at least one instance, ordered the parties to refrain from closing the transaction until clearance was granted in Mexico. Therefore, if closing prior to clearance is unavoidable and a carve-out is contemplated for the Mexican portion of the transaction, it is strongly recommended to notify the Authority in advance. Doing so can help mitigate the risk of penalties for gun-jumping.

Pursuant to the FECL, where a mandatory filing is required, a transaction must be notified and cleared by the Authority before any of the following take place:

• the legal act by which the transaction is carried out is perfected in accordance with the applicable legislation or, if the case may be, fulfils the condition precedent to which said act is subject;
• the direct or indirect acquisition or exercise of factual or legal control of another entity (or the factual or legal acquisition of another entity’s assets, trust participation, partnership interest, or stock);
• the execution of a concentration agreement among the involved undertakings (unless it is conditional upon clearance by the authority); or
• the culmination of the last in a sequence of acts, owing to which any of the Mexican thresholds are met.

If the parties to a transaction carry out any of the above-mentioned acts before notifying and obtaining clearance, they will be subject to a fine ranging from MXN565,700 (approximately USD28,908) up to 5% of their income.

Pursuant to the law, the parties should submit the executed agreement or at least the draft of the agreement by means of which the transaction is going to be executed. However, the merger guidelines establish that the authority could accept a draft of the transaction agreement or a Letter of Intent or Memorandum of Understanding ‒ and even a description of the transaction ‒ as long as the structure and the main terms and conditions of the transaction (including any non-compete and non-solicitation covenants) are not modified later.

In view of the foregoing, the parties are permitted to notify their transaction even with a description of the transaction instead of a formal agreement. However, it is advisable to submit at least the draft of the agreement, letter of intent or memorandum of understanding and to keep in mind that there should be no substantial changes to the structure and/or the main terms and conditions of the transaction ‒ given that, if the authority believes the transaction carried out differs from the authorised transaction, the parties could be subject to the fines described in 3.1 Deadlines for Notification.

There is a joint-filing fee of MXN247,820 (approximately USD12,664), which is updated annually in the law. The filing fee receipt must be submitted with the initial notice.

The parties responsible for filing are those directly involved in the transaction ‒ namely, those that are signing parties to the transaction agreements. If it is not possible for any of these parties to appear in the filing and such situation is evidenced before the authority, the appearance of the acquirer will suffice.

It is also relevant to mention that, where there are multiple signing parties that are all controlled by a single entity, the controlling entity can submit the filing on behalf of all the others.

Simple copies of the following information/documents pertaining to the involved parties must be submitted along with the concentration notice in Mexico:

• business plan;
• detailed description and structure of the transaction;
• transaction agreements;
• organisational documents;
• audited financial statements for the preceding fiscal year;
• detailed direct and indirect capital structures;
• confirmation of direct and/or indirect participation in the capital structure and/or management of entities with activities in Mexico in the same markets and/or related markets by the parties (as well as their shareholders and subsidiaries);
• competitive assessment and market shares in the national territory and any other relevant geographic market;
• facilities and plants in Mexico;
• filing fee receipt; and
• list of jurisdictions in which the transaction will be notified.

For Mexican entities, original or certified copies of the powers of attorney for each of the notifying parties must also be submitted, which should be granted in favour of their legal representatives. When the powers of attorney are granted abroad or by foreign entities, these powers of attorney shall be apostilled/legalised and notarised.

All information/documents must be submitted in Spanish. If the documents are in another language, a certified Spanish translation of the main terms of the document must be submitted along with the original document.

If the notification does not include all the information/documents referred to in 3.5 Information Included in a Filing, the authority will request the outstanding documents within the first request for information (RFI). If these are not submitted within the legal term for answering the first RFI (ie, ten business days, which can be extended by another ten business days), the filing is dismissed.

A fine of up to MXN19,799,500 (approximately USD1,011,798) may be imposed for submitting false information to the authority and an investigation into the transaction could be launched. Additionally, such conduct might carry criminal consequences.

Standard Review Process

The authority has, in principle, 60 business days to review the transaction and issue its decision. This term is counted from the date on which the authority receives all the information that was requested for the analysis. If the authority does not issue a decision within this term, the transaction will be considered authorised. The merger review process is suspensive in all cases; therefore, the parties cannot close a transaction prior to receiving clearance by the authority.

The authority is empowered to request additional information (to complete the file) within the following terms.

• The authority has ten business days following the date of filing to request basic information that should have been included in the initial filing. The notifying parties will have a period of ten business days to satisfy the request and this term can be extended in justified cases.
• The authority has 15 business days from either the date of filing (or the date on which the request for the above-mentioned information is satisfied) to request additional information that it considers necessary for the analysis of the transaction. The notifying parties will have a term of 15 business days to answer the request and this term can be extended by another 15 business days in justified cases.

Additionally, the authority may further request additional information that they deem relevant for their analysis from any person ‒ including the notifying parties, authorities, or undertakings ‒ that is related to the transaction. Whoever receives such requests for information will have a period of ten business days to satisfy such request and this term can be extended in justified cases. Such requests will not restart the clock in terms of the period in which the authority must issue its resolution.

If the authority issues a request for additional information pursuant to the above-mentioned terms, the 60 business days for review and resolution will start running from the date on which the authority has received all the requested information. In complex cases, the authority can extend the review period for up to 40 additional business days to request additional information and/or issue a decision.

It should be noted that, pursuant to the FECL, the clock will be restarted, and the antitrust authorities will have 60 business days to analyse the remedies and to issue a decision if – following the submission of the pre-merger filing ‒ the parties offer remedies or conditions in order to dissipate any possible concerns.

The decision issued by the antitrust authorities will be valid for a term of six months. Upon request from the parties involved in the transaction, the term can be extended only once for six additional months. If a transaction is not closed within the above-mentioned timeframe, the parties will need to re-submit a pre-merger filing to obtain a new authorisation to close the transaction. This also applies to decisions obtained through the expedited review process (see 3.11 Accelerated Procedure).

The parties can engage in pre-notification discussions with the authority, especially in cases where expedited clearance is essential. Even though it is not very common for these communications to occur, the authority is open to engaging in these on a confidential basis.

When the transaction does not imply substantive horizontal overlaps or vertical links, the authority usually only issues a basic request for information such as:

• documents and/or information not initially included in the concentration notice;
• clarifications on the structure of the transaction; and
• certain statements related to the absence of the involved undertakings in certain markets.

If the transaction implies substantive horizontal or vertical overlaps, the authority usually issues a burdensome second request for additional information, which mainly concerns detailed procurement, production, and marketing information ‒ as well as market data that allows the authority to carry out an in-depth analysis on the involved markets.

The deadline for the authority to resolve the transaction starts again once the issued RFIs are deemed as fully answered.

The law also contemplates a simplified pre-merger review process if the parties demonstrate to the authority that it is evident that the transaction does not have the aim or effect of diminishing, damaging or impeding competition.

When the parties request this simplified review, which must be within five business days following the date of the filing, the authority has 15 business days from the date on which the filing was received to issue a resolution on the transaction. Pursuant to the law, it is considered evident that – provided the purchaser does not participate in any related market and it is not an actual or potential competitor of the target ‒ a transaction does not have the aim or effect of diminishing, damaging or impeding competition if:

• the transaction implies the first participation of the purchaser in the relevant market (the structure of the relevant market should not be modified as a consequence of the transaction and should only involve the substitution of the undertaking);
• the purchaser holds no control of the acquired agent before the transaction and, through the transaction, it increases its relative participation in the acquired agent without having additional power to influence the operation, management (including the appointment of managers and board members), strategy and main policies of the company; or
• the purchaser has control of a company and increases its relative participation in the capital stock of the company.

If the authority determines that a transaction submitted via this process does not meet the legal requirements or if the filing is not submitted together with all the information legally required, then the authority will issue an official communication denying the expedited review process and initiating a standard review process.

This simplified procedure is not commonly used because, in many cases, it is more complicated to prove that the transaction does not have the aim or effect of diminishing, damaging or impeding competition and the authority is highly likely to consider that the legally required documents and information are incomplete. Thus, the undertakings are reluctant to follow this procedure and instead prefer to file their transactions through the standard process.

The initial test employed by the authorities to analyse a transaction is the Herfindahl-Hirschman Index (HHI). Pursuant to the authority’s technical criteria, the transaction has a low probability of harming the market if:

• the post-transaction HHI is below 2,000 points; and/or
• delta is below 100 points as a consequence of the transaction.

Additionally, when the transaction requires a more complex analysis, the authority can use other tools such as the SSNIP (Small but Significant Non-transitory Increase in Price) test.

Pursuant to the law, the following factors should be considered when analysing a transaction:

• the definition of the relevant market;
• the identification of the main undertakings that supply the market, an analysis of their power in the relevant market, and the degree of concentration in said market;
• the effects of the transaction on other competitors or consumers of the goods or service in the relevant market, as well as with regard to other related markets and undertakings;
• the equity participation of the involved parties in other undertakings and the equity participation of other undertakings in the parties involved in the transaction – provided these undertakings engage, directly or indirectly, in the relevant market or its related markets (when it is not possible to identify such participation, this circumstance must be fully justified); and
• the information provided by the undertakings in order to demonstrate greater market efficiency as a result of the transaction and which will impact favourably on the process of competition and free market access.

Although there is no de minimis criteria for analysing a transaction, when the increase in market shares as a consequence of the transaction is low and the HHI criteria referred to in 4.1 Substantive Test is met, the Authority may not carry out an in-depth competition analysis.

It is common practice for the authority to refer to its own case law and that of other relevant jurisdictions (mainly the USA and the EU), if the assessment used to identify the relevant market is applicable to Mexico. The main competition authorities usually relied upon by the Mexican authorities are the EC, the US Federal Trade Commission, and the US Department of Justice.

The competition concerns investigated by the authorities include unilateral effects, co-ordinated effects, conglomerate or portfolio effects, vertical concerns, and the elimination of potential competition. However, their main assessments concern unilateral and vertical effects, as well as the elimination of potential competition.

Pursuant to competition law, economic efficiencies can be argued by the parties and studied by the authorities. Ultimately, the authority can rule whether the economic efficiencies derived from a transaction compensate for the potential competition risks – although there are no clear criteria according to which the Mexican authorities should carry out their assessment. In any case, it is up to the parties to demonstrate that such economic efficiencies exceed the competition risks.

The review process carried out must be related only to competition issues and the criteria outlined in the law for such assessments. However, lately the Authority has started conducting a deeper and more thorough analysis of the non-compete provisions in the transaction documents.

There are rules for foreign direct investment; however, these are separate from the competition regulations and the merger control rules. There are specific filings required for foreign direct investments in certain scenarios, but this is a different procedure before a different authority – namely, the Ministry of Economy.

The legal thresholds established to determine whether a transaction must be notified and cleared by the competition authorities are not structured in a fashion that applies directly to joint ventures. The competition authorities have nonetheless issued guidelines on how to determine whether joint ventures require a pre-merger filing. When joint ventures are analysed by the competition authorities, one of the main priorities is to examine the possible co-ordination between the joint venture partners.

The authorities can prohibit the execution of a transaction; however, they must first evidence that the transaction presents a risk to the competition process in the market(s). When issuing a resolution on the parties’ proposed transaction, the authorities may either clear the transaction, clear the transaction subject to remedies, or prohibit the transaction.

When the authorities have concerns about a transaction, the parties are allowed to offer and negotiate both structural and behavioural remedies, as well as amendments to the initial terms of the proposed transaction.

Typically, the authorities prefer structural remedies, rather than behavioural – particularly in transactions with horizontal overlaps. The authorities are usually reluctant to accept behavioural remedies, as these require periodical review.

The authorities consider behavioural remedies to be more effective for transactions involving vertical links – although they are not usually accepted, even in these circumstances, as their surveillance takes more time, is more expensive and difficult.

In practice and when required, the authorities issue an official announcement – in which the possible risks to competition are identified – rather than directly requesting remedies from the parties. Afterwards, the parties usually offer remedies to address the identified risks, whereby they specifically address the authorities’ concerns.

Finally, all remedies imposed or accepted shall be directly related to correcting the competition concerns derived from the transaction.

For remedies to be deemed acceptable, they must meet the following legal standard:

• The Authority may only impose or accept conditions that are directly related to correcting a concentration’s effects.
• The conditions that are imposed or accepted must be proportionate to the intended correction.

The parties can offer remedies from the initial notification of the proposed transaction until one day after the transaction is listed on the agenda for the board of commissioners to review. If the remedies are proposed after the initial notification of the transaction, the term for the authority to resolve the transaction is restarted.

The authority can propose the remedies on their own motion. However, it is standard practice for the authority to defer to the parties in this respect – given that the parties are knowledgeable when it comes to their own business and, ultimately, can suggest remedies that will best address the competition concerns raised by the authorities.

If the transaction is cleared subject to remedies, the parties must accept said remedies or the transaction will be blocked by the authority.

The parties have a period of six months (which can be extended for another six months) to evidence the closing of the transaction on the terms authorised in the decision. Where the remedies contemplate the divestment of certain assets and/or entities (ie, structural remedies), they can include a request for the divestment business to operate as a “hold separate” during the closing of the main transaction.

If remedies are not complied with, the parties can be fined up to 10% of their total income and ultimately be forced to dissolve the transaction.

The authorities issue a decision either clearing the transaction, clearing it subject to remedies, or blocking it. A non-confidential version of the resolution is subsequently published on the authority’s website.

In recent years, the only foreign-to-foreign transaction to be prohibited was the acquisition of Cornershop proposed by Walmart. Even though the parties offered behavioural remedies to address the competition concerns raised by the authority, the latter considered that these were not enough to resolve the concerns. Other foreign-to-foreign transactions – for example, Bayer-Monsanto (2018) – have been conditioned on remedies by the authority.

When a transaction is notified, the parties must provide the authority with the transaction documents and specify whether the transaction contemplates any ancillary restraints (eg, non-solicitation or non-compete provisions) or related transactions.

The authority takes ancillary restraints very seriously and conducts a deep analysis. It is worth noting that, if any of the restraints are amended after the authority authorises the transaction, the authority is highly likely to open a gun-jumping procedure for closing the transaction on terms other than those authorised. The ancillary restraints must be notified and cleared within the same analysis of the whole transaction.

Regarding related transactions, the parties can include them within the description of the main transaction and seek authorisation of both the main and ancillary transactions. It is highly recommended that the parties provide clear and straightforward descriptions of all the transactions involved. However, to contemplate these other transactions within a single decision, it is also possible that the authority will request that other entities related to the ancillary transactions adhere to filing requirements and provide information and documents.

There is no process foreseen in the law through which third parties can be involved in the pre-merger review procedure. However, aside from information requested by the authority (if any), third parties can submit White Papers containing evidence/arguments on why the merger should be assessed in a specific fashion or ultimately rejected.

The authority contacts third parties (competitors, clients, suppliers, or other authorities) only in complex transactions or when the transaction raises competition concerns. Usually, the authority notifies written RFIs; however, in some transactions, telephone calls will suffice.

When remedies are offered by the parties, the authority analyses whether these remedies address the competition concerns identified. When the remedy completely resolves the competition concern (eg, divestment of a business unit or eliminating the overlap among the parties), the further assessment carried out by the authority is easier; otherwise, an in-depth analysis is required.

The Authority publishes a redacted version of the decision by means of which the transaction is authorised. These public versions of the decisions omit information identified by the parties as confidential. Commercial information and business secrets are completely redacted in the public versions of the decisions, and part of the description of the transaction can also be redacted if the parties involved justify why such parts should be classified as confidential.

In specific cases where the transaction involves a complex antitrust assessment that requires the clearance of competition agencies in several countries, the latter might co-operate with each other. In Mexico the Authority must request a waiver from the parties in order to disclose the information contained within the file to foreign competition agencies. It is more common for the Authority to request such a waiver when remedies are being offered or negotiated.

The decision can only be appealed when it is final and this is done before courts that specialise in antitrust, telecommunications and broadcasting cases (“specialised courts”). The appeal is carried out by means of a constitutional appeal called juicio de amparo indirecto.

The typical timeline for appeals ranges from one to three years (depending on whether the initial decision of the courts is challenged by the parties). In the past ten years, no appeal has succeeded in overruling the main decision by the Authority on a merger – although there is a precedent where the parties appealed one of the remedies imposed by the Authority and the specialised courts eliminated this remedy.

It is not clear whether a third party can appeal a clearance decision. This has never been done and the applicable law does not grant third parties the right to challenge clearance decisions if they were not involved. However, if a third party can argue and evidence its legal interest before the specialised courts pursuant to the required standards, the appeal might be admitted.

The authors are not aware of any legislation or regulatory provisions in respect of foreign subsidies. However, Mexico has foreign direct investment regulations that are contemplated in the Foreign Investment Law (Ley de Inversión Extranjera, or LIE), as well as mechanisms to compensate the effects of foreign subsidies in terms of foreign trade.

The LIE establishes certain thresholds for the notification of foreign direct investment in Mexico. These thresholds are based on the value of the assets of the company being invested in and the type of commercial activity it carries out. The National Foreign Investments Commission (Comisión Nacional de Inversiones Extranjeras, or CNIE) must approve the investment in advance if the following thresholds are met:

• direct or indirect investments of more than 49% interest in the capital stock of a Mexican entity with assets valued at more than MXN26,978,252,017 (approximately USD1,378,635,992) (please note that this authorisation is only required when it is the first participation by the corresponding foreign investor in a Mexican entity); and
• direct or indirect investments of more than 49% interest in companies engaged in any of the following commercial activities in Mexico:
1. port services in order to allow ships to conduct inland navigation operations (eg, towing, mooring and barging);
2. the exploitation of ships solely for high seas traffic;
3. licensed use of airfields for public service;
4. private education services at pre-school, elementary, secondary, middle school, high school, college and higher education level (or any combination thereof);
5. provision of legal services; and
6. construction, operation and exploitation of general railways and provision of public railway transportation services.