Mexico: merger control

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In summary

This article explains trends and issues associated with due process matters in Mexican merger control cases. Its main purpose is to inform readers of merger control trends and developments in Mexico to enable potential filing parties to consider these and therefore know what to expect during the merger control process in Mexico.

Discussion points

  • Merger control cases brought before the Federal Telecommunications Institute (IFT) and the Federal Economic Competition Commission (COFECE) are becoming increasingly complicated
  • The intervention of specialised courts has been required to establish limits to IFT and COFECE powers
  • Where specialised courts have not clearly defined legal matters, procedural complications may ensue, including resolutions with scant content, lack of acceptance of ex post remedies and closing verification processes not seen in other jurisdictions
  • Specialised courts

Referenced in this article

Notifying parties

The Federal Economic Competition Law (FCL) establishes that merger control filings must include:

  • names of the parties notifying the transaction as well as those participating in it, directly or indirectly;
  • the name of the legal representative and its powers of attorney;
  • the involved parties' corporate and financial information; and
  • details of parties that directly or indirectly participate in any activity of any of the parties to the transaction if they produce or commercialise the same or similar goods or services.[1]

Due to the vagueness of the language in the FCL, both of the antitrust authorities (the Federal Economic Competition Commission (COFECE) and the Federal Telecommunications Institute (IFT)) have issued regulatory provisions as well as their own guidelines to clarify the required content and scope of the above requirements in merger control filings.[2] This has resulted, in principle, in the following:

  • that the notifying parties (and the parties filing powers of attorney, corporate information, financials, etc) would be the parties to the relevant agreement or transaction documents, unless it was impossible for these parties to make the filing and that this could be proved; and
  • that all passive investors in a transaction,[3] with an investment or participation, by means of a limited partner agreement, of below 20 per cent (or less than 5 per cent if active investment or participation) would be exempt from being identified and providing relevant corporate and financial information.

The aforementioned safeguards were pursued with the intention of making it easier for filing parties to know what to expect and what to file in their merger control notices. In addition, they intended to ease the burden of identifying investors (and attesting to the lack of overlaps between their activities) in multiple-investor transactions where such investors are essentially inconsequential in a competition analysis.

However, both COFECE and the IFT have narrowed down the two principles set forth above to help entities navigate increasingly complex processes.

First, competition authorities in Mexico require all parties to a transaction to participate in the relevant filing, irrespective of whether these entities will own any kind of majority interest or will be entitled to manage the company or assets after closing. This is particularly difficult in transactions where relevant transaction vehicles are not yet incorporated, or may be amended at closing, due to changes to the transaction structure.

Second, competition authorities seem seldom persuaded to avoid requesting information from passive investors, even within the thresholds, if they are considered parties to the transaction or if their character as passive investor is not clear. For example, having veto rights or the ability to appoint a board member is considered as active participation, even if these rights or abilities would not lead to the investor having any management power or decisive influence within the relevant company or fund.

Third, where an independent investment is not above the thresholds set forth by the FCL, if the authorities consider it part of the same transaction the parties are required to join the relevant filing.

These scenarios relate to all relevant parties or investors, even if passive, that have signed any of the transaction documents (including commitment letters or similar ancillary documents), including those present at closing.

The Mexican competition authorities, particularly COFECE, have advised that the above requirements are necessary to avoid cross-directorate issues and to ensure that companies being used as a point of contact do not use any information gained to aid them in other or related market segments. In practice, there have been no direct links between these suspicions and COFECE effectively sanctioning cartel conduct or abuse of market power. By forcing the inclusion of these investors, indirect parties, or the provision of extensive information from them, has considerably increased the complexity of filings. This has had relevant consequences for notifying parties, ranging from extensive delays in obtaining relevant authorisations to the application of verification proceedings that jeopardise transactions.

Use of precedents

Notifying parties should take into account that prior precedents may not always be applicable in future merger control filings.

In addition to the issues referred to above, filing parties need to be aware that certain interpretations of the FCL may change even in consideration of when a merger filing is required. In at least one recent case of asset divestment derived from a remedy package,[4] COFECE stated that parties to a transaction were not allowed to proceed with their transaction because long-term lease agreements were not considered divestments even though long-term agreements had long been considered sufficient to trigger a relevant merger if the thresholds were surpassed.[5] Furthermore, COFECE stated that having financial information relayed from the lessee to the lessor for the purposes of determining the payment of rent could cause a parallel conduct problem, even when it had previously permitted mergers with very similar structures.

In this case, one of the parties took the case to specialised competition courts to reverse the precedent. The specialised courts ruled in favour of the claimant, stating that long-term lease agreements were indeed a form of divestment and, thus, of valid merger control analysis, stating particularly that the conditions imposed on the claimant did not prevent it from divesting relevant assets by those means.[6] Although no specific statement was made related to the parallel conduct issue, there seemed to be no evidence to suggest that relaying sales or other aggregated forms of financial information from the lessee to the lessor for rent payment purposes would materialise into a parallel conduct case.

Several merger cases deriving from this divestment remedy also resulted in litigation before specialised courts due to the market analysis by COFECE.

In brief, COFECE stated that, for market analysis purposes, the Herfindahl–Hirschman Index and relevant merger criteria needed to consider that the assets were owned by a non-existent competitor, and not of the party that had effectively acquired the assets for later divestment, to duly measure the impact of the divestment.[7] This naturally resulted in effectively blocking divestments to the only competitors that were interested in the assets; under this assumption, all resulting market shares showed a market concentration increase, irrespective of the relevant competitor that acquired them, and did not properly show the effect of divestment from the relevant divesting entity.

Notice of risks

Pursuant to the FCL, antitrust authorities in Mexico need to communicate a transaction's potential competition risks at least 10 business days before the matter is set to be reviewed by their respective boards of commissioners. This is to advise parties of the formal concerns of the authorities, to enable them to address these and, if possible, present a formal remedy proposal.

Historically, this communication took place by way of a formal meeting in which parties received a brief summary of the risks but without any particular interaction with the case handlers or relevant directors or without access to relevant analysis or justification for the authorities' rationale. Furthermore, and at least in the case of COFECE, the parties were requested to sign the minutes of the meeting in which it was established that all risks had been explained in detail and to the satisfaction of notifying parties present, but without any kind of actual reference to the summary that had been provided or the reasons behind these conclusions.[8]

This situation led merger control filing parties to state in the minutes that the authorities had failed to properly communicate competition risks associated with the transaction, and try to bring this to the attention of specialised courts. However, and considering (i) that parties in a merger control notice seldom have the time to litigate matters instead of offering broad remedies to make their transaction approved, and (ii) that prior precedents in administrative and constitutional law state that actions from authorities that are not final in nature (such as the risk assessment minutes) do not transcend to affect the rights of claimants, parties had little incentive to pursue litigation.

Fortunately, and deriving from a specific constitutional action, claimants were able to successfully argue before specialised courts that COFECE must be exhaustive and transparent in communicating the risks that it envisions in any transaction, and put these in writing, so that the parties can understand and attend to them adequately.[9] Otherwise, remedy proposals were created from recollection of those parties present at the meeting.[10]

This precedent has changed the way in which COFECE, at least, communicates risk assessments. It is trying to be more thorough in the formal document in which these risks are conveyed.

Application of remedies and divestment programmes

One of COFECE’s latest (and lengthiest) divestment programmes recently concluded after six years of searching for suitable purchasers or investors. This divestment programme sought a total of 21 interested parties, to which at least 10 different pre-merger filing notices were issued; only two were approved for the divestment of about half of the assets that were included in the programme.[11]

COFECE’s history with ex post remedies has been far from effective and has almost always resulted in complex litigation before specialised courts. Although the reasons may vary between each case, common elements include lack of flexibility and experience from the authority when dealing with complex mergers and absence of trust in the information that is submitted to them, in addition to the issues referenced above, such as the conveyance of risks.

As an example, and in the six-year-long divestment case mentioned above, the relevant market was entirely constructed from a combination of incomplete, internal customer data of one of the notifying parties, controversial precedents from other competition authorities in the same market segment and relevant distance calculations made using publicly available software.[12]

Lengthy sets of data, arguments and even other applicable precedents from other competition authorities have been dismissed in favour of a specific construction of the market with which parties in the segment have been struggling. In some cases, the market construction has resulted in the rejection of merger control applications,[13] and, eventually, in having to acknowledge the impossibility of complying with the requested remedies.[14]

In addition, and even where parties had the benefit of applying ex ante remedies, remedies have normally encompassed market segments, products or services not considered by the filing parties, requiring them to divest or not acquire part of the relevant business or assets, or reconfiguring their anticipated board, with little time to do so. This is because, in spite of market insight by parties, both antitrust authorities favour the application of formalistic rules to their analysis and their definition of markets, which may include: (i) health or pharmaceutical registries (rather than actual usage of products or services); (ii) potential changes to input and supply facilities (even if these changes have never been considered or would be considered unfeasible by customers of the products or services in question); and (iii) links between members of the board and their interests in other market segments.[15]

Considering the above, notifying parties need to be aware that the existence of transaction overlaps, either in concentrated markets or otherwise, that could create market shares that elevate them to relevant market player status, should first pass through a thorough competition analysis to establish whether remedies need to be sought from the very beginning. Otherwise, parties may end up dealing with late and complicated remedies, and, sometimes, particularly in the case of multi-jurisdictional merger control cases, with carve-out issues for which neither COFECE nor the IFT have issued any kind of guidelines or safe harbours.


Counsel must take necessary precautions to inform their clients that, in spite of an increase in the length of, or details required in, information requests, in most cases resolutions issued by the Mexican antitrust authorities are very brief and do not address or make reference to potential issues discussed in each case.

This normally leads parties to believe that their transaction will be easy to approve or that certain matters may not be analysed or addressed if they were not mentioned in the resolution. In addition, parties to a transaction may not know what to expect in their specific sector or transaction unless they have hired counsel experienced in that specific sector or with recent experience with a similar transaction. In addition to being a legal certainty issue, this ironically may constitute an effective barrier to competition advocacy, as public resolutions may not be sufficient to enable counsel to effectively assist their potential clients.

In at least in one known case, COFECE amended its own resolution to allow the exchange of assets in a divestment programme, and imposed additional obligations on the notifying parties and the divestment trustee.[16] Although the parties to that resolution certainly benefited from the amendment to the assets exchange by divesting more appealing or attractive assets, amending a resolution to impose additional obligations (and fines) was certainly controversial and contrary not only to administrative law principles, but it also contravened basic human rights such as the pro homine principle. At the time of writing, it is unclear whether existing litigation in this regard will give antitrust authorities in Mexico an opportunity in the future to amend their own resolutions.

Closing notices and verification proceedings

Once the closing of a transaction occurs, the parties have 30 days to file evidence with COFECE. Until recently, a press notice or corporation registry ledger showing the existence of a new shareholder was enough to declare the closing of transactions. However, in the past few years, authorities have taken a more rigid position to decree closings. While this was historically a simple writ, it has become a procedure that can require time and additional resources from the parties.

Among other things, it is recommended for parties to register any new shareholders' or partners' details and the incorporation document in the case of new companies. Parties should be aware that the structure of the transaction should be exactly the same as that notified to, and authorised with, the authority. Note that if COFECE identifies any deviation from the previously provided information, it will open a verification proceeding to analyse any modification or unreported action.

In at least one recent precedent,[17] an international fund acquired an interest of less than 1 per cent of the target through an underlying fund not specifically approved by COFECE. While this minor acquisition did not pose any competition risk nor was above the notification thresholds set forth by the FCL, this gave rise to COFECE initiating a verification proceeding, arguing that, due to this sub-1 per cent interest, the transaction was a completely different transaction to the one that was notified. This position affected not only the international fund, but all notifying parties, even though they were completely independent, and this fact was known to COFECE. Evidently, notifying parties should take into consideration that any minor modification to a transaction can lead to COFECE concluding that the closed transaction differs from the approved transaction. Moreover, this may involve notifying parties in unintended verification proceedings requiring additional costs, human resources and time.

In the above case, the verification proceeding ended with a fine for all notifying parties. However, COFECE has sufficient powers to declare a concentration null, arguing that it affects the competition process and that it is an unauthorised transaction, with the additional possibility of requesting it to be unwound.[18]

Concurrence of parties to a litigation

Notifying parties that wish to litigate a resolution issued by COFECE or the IFT will require to do so by means of a constitutional rights claim known as an amparo proceeding. This is because all ordinary means of defence or litigation (reconsideration claims, nullity trials, among others) were left out of the FCL when it was amended in 2014, for the benefit of competition authorities in Mexico.

Among the pitfalls of these constitutional claims, one is particularly relevant, namely whether all the parties to the merger control notice need to file the claim or whether it is sufficient for one of the parties to do so. This is due to the principle of relative application of resolutions from courts, which state that lack of concurrence of all affected parties to a litigation may still result in specific effects that apply to all involved parties, irrespective of whether they made a claim, and, therefore, could protect all parties regardless of whether they thought their rights had been violated.

Notwithstanding the above, specialised courts have confirmed that although their resolutions cannot directly order the protection of the rights of parties that have not made a claim, the mere fact that one claimant is right in its pretension is sufficient.[19] In other words, as long as one party wishes to make a claim related to the merger control process, it may do so, regardless of whether the other parties to the transaction wish to pursue litigation.

The aforementioned may be of particular importance to potential claimants of wrongful resolutions issued by antitrust authorities, as it is clear that each is able to pursue its own interests in litigation irrespective of whether other parties to the merger control notice wish to pursue legal action against the resolution. Additionally, even though several parties may concur to the merger filing process because they are involved in the same transaction, that does not mean that parties will have the same strategy when they are affected by a COFECE resolution.

Controversies arising from lack of definition and cooperation between COFECE and the IFT

During the first 20 years of antitrust enforcement in Mexico, COFECE was the only body empowered to investigate and sanction anticompetitive conduct in all markets due to the enactment of the first Competition Act (in 1992). As of a constitutional amendment of 2013 and the enactment of the FCL in 2014, COFECE split jurisdiction on competition matters with the IFT, the latter being the competition agency for telecommunications and broadcasting industries only.

The development of new technologies and the creation of new markets has led COFECE and the IFT to contest which is the competent authority for processing certain merger reviews or investigating potential anticompetitive conduct, particularly in digital markets. This has intensified during the past few years, making the merger review processes in Mexico even longer and more complex.

In anticipation of any potential conflict of jurisdiction between the agencies, the FCL set forth a procedure for solving this. This procedure requires the intervention of specialised courts, which determine the competent agency supposedly within 10 business days. In reality, decisions on jurisdiction conflicts are taking approximately five months.

During the first five years of concurrent jurisdiction on antitrust matters, the judgments entered by specialised courts were modest, arguing that the antitrust bodies did not bring enough evidence for settling administrative jurisdiction. Consequently, these decisions have not shed light on the markets in which each agency is competent. Furthermore, and over the past four years, the debate has become more complex, initially because the technological evolution of the services provided through digital markets is moving forward rapidly, bringing additional interrogations to this discussion. Throughout the most recent judgments,[20] the conclusions have been changing and expanding; the competence of the agencies in relation to the market of the transaction at hand has changed from one agency to the other, making it extremely complicated to identify which agency will be in charge of a particular transaction.

Based on one of the most recent judgments of the specialised courts, the use of the internet seems to be key in settling jurisdiction in favour of the IFT. Specialised courts appear to be overseeing the evolution of traditional markets migrating towards digital services. Faced with this change, it is essential to question whether the change in the transaction medium is enough to consider these markets as sitting under the umbrella of the telecommunications or broadcasting sector; if this opinion became consistently applied by specialised courts in Mexico, COFECE would have to gradually diminish its participation in merger control in these markets to the benefit of the IFT.

Considering all the difficulties that the participants in these particular decisions have faced, as well as the uncertainty experienced by both agencies, we would expect to see closer cooperation between the agencies in the future, to avoid the high costs associated with having competition conflicts decided by the federal courts.


[1] Article 89, Sections I, II, V, VI and VII of the Federal Economic and Competition Law (FCL).

[2] The Federal Economic Competition Commission (COFECE) merger control guidelines:; the Federal Telecommunications Institute guidelines:

[3] Although loosely defined, 'passive investors' are considered those that are not generally able to exert decisive or even relevant influence over the target company or fund, or that will not have the right or capacity to participate in, intervene in or influence, either directly or indirectly, decision-making, including in terms of business plans, policies, objectives or annual budgets of the relevant fund or company.

[4] See COFECE Cases Nos. CNT-021-2015 and COND-001-2016,

[5] COFECE Press Release, 'COFECE Objected to the Divestment Proposal of Some of the Stores that Soriana Seeks to Sell to Chedraui', 7 October 2019,

[6] See Cases Nos. JA 1212/2017 and RA 277/2018, held before the first and second specialised courts, respectively, Organización Soriana, S.A.B. de C.V., v COFECE.

[7] As illustrated by Cases Nos. CNT-092-2017 and CNT-064-2019 and other merger control cases derived from Case No. COND-001-2016, all handled by COFECE. Case No. CNT-092-2017 is particularly enlightening in terms of market analysis, as this merger was blocked because the incumbent investor had substantive market power in the relevant geographical markets, in COFECE's opinion (because it used this type of analysis), but the divesting entity also had substantive market power.

[9] See Cases Nos. JA 256/2018 and RA 453/2019, held before the first specialised courts, Organización Soriana S.A.B. de C.V., v COFECE.

[11] See COFECE Case No. COND-001-2016.

[12] See COFECE Case No. CNT-021-2015.

[13] Findings of Case No. CNT-021-2015 and divestment control proceedings during the life of Case No. COND-001-2016 are expected to have negatively affected other transactions in the supermarket segment, including, in particular, Case No. CNT-092-2017 as well as other, more recent filings that involved combinations of online sales and brick-and-mortar stores, such as Case No. CNT-161-2018, all handled by COFECE.

[14] See COFECE Case No. COND-001-2016.

[15] For one example of the foregoing, see COFECE Case No. CNT-151-2019.

[16] See COFECE Case No. COND-001-2016.

[17] Case File No. CNT-081-2021.

[18] The language under the FCL is somewhat contradictory in this regard; whereas the merger control chapter of the FCL expressly states that mergers that surpass the relevant thresholds require to be approved beforehand by the competition authorities or would be null and void of all legal effects, the fines and sanctions chapter gives the authorities sufficient powers to request the transaction’s unwinding. This seems to be a legal contradiction as the authorities would be effectively unwinding transactions that, to their legal knowledge, did not exist in the first place.

[19] See Cases Nos. JA 1212/2017 and RA 277/2018, held before the first and second specialised courts, respectively, Organización Soriana, S.A.B. de C.V., v COFECE.

[20] See jurisdictional conflicts under Cases Nos. CCA 4/2019, CCA 1/2021 and CCA 3/2022, all held before specialised courts.

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