In current M&A practice, when talking about transactions of a certain size, it is important to take economic competition factors into account, and a preliminary and important element that especially needs to be considered is what the merger control rules are. The timing for making a filing or a notification to obtain approval from the competition authority, and the timing for receiving a reply from that authority are, together with other regulatory clearance which may vary depending on the type of transaction or industry concerned, a crucial element for negotiating the conditions that will need to be fulfilled before closing a merger.
The process becomes more interesting and a greater challenge where transactions involve more than one jurisdiction. In that case an understanding is needed of which tests determine that a notification or filing is required with respect to the companies or assets located in the countries concerned, whether those tests only include quantitative requirements or qualitative requirements also, and whether the economic figures to be revised relate in each case to the country being analyzed or the aggregate amount involved in the transaction. It is also important to study the parameters in the various countries’ legislations that will help clients gain an understanding of the potential risks if clearance is not obtained at the same time. Examples include prior approval requirements or penalties.
This document contains an analysis of the Latin American countries where Garrigues is present.