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A concentration occurs when companies or economic agents merge, acquire parts of another company, combine or carry out any other transaction in which companies join together. When a transaction exceeds certain thresholds, COFECE should be notified for the impact on the market to be assessed and to verify that competition and free market access are not put at risk. This analysis will provide grounds to authorized, condition or deny concentrations submitted. Article 85 of the Federal Economic Competition Law establishes the criteria/assumptions under which it is mandatory to notify a concentration.
Economic agents may use COFECE’s Electronic Transaction System (SITEC) to notify a concentration.
Information that may be presented by an economic agent to contribute to concentration analysis
According to article 89, sections I to XI of the Federal Economic Competition Law (FECL), concentration notification must be accompanied by certain elements for its analysis. Additionally, section XII of the same article, establishes that there is certain information that may not be specifically deemed pertinent in the Law, yet may facilitate the analysis and processing of the notification. This information is generally rendered in daily business operations or within the framework of the notified transaction, and consequently would not generate additional costs to economic agents.
The Commission usually makes a formal request for this information pursuant to article 90, section III, paragraphs one and two of the FECL. However, providing this information with the written notification or in the early stages of the procedure is useful and cost saving, in terms of time, for both economic agents and COFECE. The following information serves as an example: *
- Uncertified copies of minutes of the assembly meetings in which the viability of the notified transaction is discussed (purchase, sale or co-investment).
- In the case of public companies, press releases where shareholders express the reasons for the transaction.
- Evaluation of the feasibility of the notified concentration elaborated by or for the parties.
- Assessment of the impact of the transaction on market participants, competitors, clients, distributors, the expansion of production or cost reduction conducted by or for the parties.
- Evaluations that analyze the synergies or efficiencies that would be generated by this transaction.
- Business plans for the past three years.
- For sellers, the offers or proposals made by potential buyers.
- Sale documents or catalogues through which possible buyers of the object of the transaction and, when applicable, purchase proposals.
- Documents elaborated by the parties’ areas in charge of strategic planning.
- Organization chart of the economic agents involved in the operation.
- Parties’ uncertified copies of the market studies or investigations, statistics, econometric evidence or surveys of production, distribution, commercialization of goods and services in Mexico.
- Annual reports of the past fiscal year, of all the public companies that participate directly or indirectly in the transaction.
- Uncertified copies of the involved parties’ national expansion plans.
- A list of each of the products or services that overlap among the parties involved, in Mexico, along with the ten main clients by commercialization or distribution channel, including contact information.