Last week, Mexico's antitrust agency, the Federal Economic Competition Commission (COFECE), formally announced that five economic agents have been fined due to their failure to obtain a premerger clearance prior to closing of a certain transaction.

In its public communication, COFECE noted that, while the involved economic agents did obtain a premerger clearance, COFECE ultimately imposed the fine because (i) the terms and conditions under which closing occurred deviated from those that the parties initially submitted for COFECE's approval, and (ii) the involved economic agents did not update COFECE on the revised terms and conditions for closing, nor did they sought any additional authorization in connection therewith.

While, according to public information, the deviation in the closing terms and conditions initially approved by COFECE seems to have been non-material, this was reason enough for COFECE to consider that a merger technically took place without the involved parties obtaining the necessary antitrust approval.

Mexican antitrust regulation provides a very comprehensive definition of "merger", which is why COFECE may rule that a merger technically occurred even when the involved parties may consider it to be an intermediate step part of a broader transaction. Mergers that exceed certain thresholds must be notified to (and obtain clearance from) COFECE before their completion, and the transaction may not close until the relevant authorization from COFECE is obtained. Thereafter, the parties to the transaction have to submit documentation evidencing closing.

The fine imposed by COFECE may be further challenged by the involved economic agents. As always, COFECE's penalties are in addition to and irrespective of criminal and/or civil liability that the involved parties may be subject to.

For more about COFECE's role and latest activities as independent constitutional agency in Mexico, please refer to our previous updates:


International Partner, Norton Rose Fulbright US MX, S.C.

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