|
Threshold I
Price of the transaction in Mx |
Price allocation of the Mexican portion of the transaction >MXN$1,810,240,000 (~USD$96,090,000*) |
|
Threshold II
Size of the Target |
Accumulation of 30% or more of the assets / shares of Target with annual sales / assets in Mexico >MXN$1,810,240,000 (~USD$96,090,000*) |
|
Threshold III
Size of the Parties |
Accumulation in Mexico of assets / capital stock >MXN$837,236,000; (~USD$44,441,000*), and Parties of the transaction with combined annual sales /assets in Mexico > MXN$4,525,600,000 (~USD$240,225,000) |
| * USD/MXN: 18.84 | |
“In 2025, COFECE has already logged 70 merger control cases. At this pace and despite the uncertainty surrounding antitrust enforcement and the economy generally, this could be a record year in merger control”.
Merger control in Mexico has become increasingly complex as agencies ever more resort to tools such as extensive information requests and market testing. This, coupled with more sophistication of staff in certain industries, has resulted in longer proceedings in recent years. Antitrust enforcement in the telecommunications and broadcast industries will come back to the new agency, and Congress currently analyzes proposals to lower filing thresholds4 and to incorporate a new category of reportable transactions5. This, together with potential further staff cuts in the name of government efficiency can create an even greater workload for the Merger Control Division, which will likely result in longer review periods, unless the new agency is able to revitalize the obsolete fast-track procedure. The latter may be true even for non-issue acquisitions by private equity funds or for real estate transactions, where the average timing estimate has increased from 1.5-2 months to 2.5-3 months. 6
Data for 2024 is not available yet, but growth trend is likely to continue due to unlimited extensions in RFIs and increasing market tests and review of internal documents and e-mails/messages.
“On average, a second RFI is issued in 20% of cases. However, considering the amount of RFIs this year, we expect such percentage to be higher in the near future.”.
Good news is that returning jurisdiction over telecoms and broadcasting markets to the new agency will remove the extensive and pointless discussions between COFECE and IFT that pushed merger timelines for months, and most of the times required parallel filings with both authorities (and even overlapping decisions). As for approval rates, similar to other jurisdictions, the number of unconditionally cleared transactions is higher than 90%. However, in the last two years, decisions have been less unanimous in COFECE’s Board of Commissioners and remedies have been more extensive both in scope and length7. Finally, and following the trend of other jurisdictions, the legislative branch is looking for a longer statute of limitations for below-the-radar transactions8.
In sum, antitrust reforms are expected to cause Mexican merger control to capture more transactions and results in longer review periods. This will not only require greater document collection efforts and disclosure from the parties, but also a deeper understanding of the Mexican regulatory landscape.
Proposals to lower thresholds and expand the scope of reportable transactions could further increase the spike in cases.
Filings usually result in an RFI from COFECE (more than 90%). Most filings will only require standard information and customary back and forth actions with staff to answer questions.
Merger control is no longer just about size. The new approach brings sharper scrutiny to foreign-to-foreign deals, internal documents, and procedural missteps. Timelines are tighter, enforcement is stricter, and even no-issue deals can quickly become high-risk if not handled carefully.
“The new agency may prefer the route of pursuing market investigations instead of abuse of dominance cases, as it reduces the burden of proving market power or a specific conduct of the investigated companies”.
A shift of enforcement priorities for the new antitrust agency is also expected. Since its establishment, COFECE had a strong focus on opening energy markets and regulating state-owned companies.
However, these companies became central to the government's industrial policy and played a key role in recent constitutional reforms that effectively rolled back the previous energy and telecommunications reforms of 2013. Therefore, investigations are likely to keep shifting to other sectors that are sensitive to Mexican consumers and the new law is likely to include (i) higher fines9, (ii) shorter investigation terms10, and (iii) stringent measures for obstructing dawn raids or ignoring summons (i.e., 36-hours detentions)11.
The intention of the legislators is to use all available enforcement tools. Both of the proposed bills signal the intention to increase the number of third-party complaints12. Higher procedural fines and coercive measures (e.g., for refusing to cooperate or providing false information) are set to be used as a mechanism to facilitate the agency’s work.13 Incentives for certified compliance programs are included in one of the proposed bills to promote self-regulation and raise awareness among companies. Considering the “whole-of-government” approach, the new authority could also pursue a more coordinated enforcement with other government agencies.
Finally, companies should be aware of Mexico's slow but steady trend toward private enforcement. COFECE filed its first-ever class action lawsuit last year14 and one of the proposed bills takes a step into facilitating claims by clarifying when could it be pursued and the statute of limitations.15 The new agency's imminent relocation as part of the Federal Public Administration may encourage coordinated actions with the consumer protection agency to boost damages claims. If needed, current legal barriers to private enforcement may also be overcome by the official party's supermajority in Congress and the renewed judiciary.
On average, 95% third-party complaints were dismissed by COFECE, most due to procedural issues and formalities.16
Energy/utilities, transportation, agri-food, pharma, and financial services are some of the most recurrent sectors in investigations
The average individual fine has been ~USD$1m for each sanctioned company.17
A more complex and multi-level interaction with the government is on the horizon. Mexico is part of a global trend to integrate antitrust into a larger policy strategy, aligning it with broader industrial policy objectives, but the government has made it clear that antitrust violations will be vigorously prosecuted. We expect the new law to continue the trend of even more strict merger control enforcement which, together with its new tools and expanded jurisdiction, may result in longer reviews and deadlines. Considering that the primary driver of these changes is the strengthening of the executive branch’s power, we believe the technocratic approach -already diminished in the previous administration- will likely remain less relevant in the current one. A deep knowledge of our formalistic regulation and intricated judicial system will be key to secure timely approvals and win cases in the coming years.
“We are confident that we are uniquely positioned to help our clients navigate these uncertainties and challenges, bringing our extensive regulatory and public sector knowledge to the table”.
Soon, Mexico will have a new antitrust law and a new antitrust authority. A new bill to reform the current Competition Law has been published by the Mexican Congress on April 24, 2025 (the "Executive's Branch Bill" or the "Bill"). The Bill was proposed directly by President Sheinbaum and will be discussed in the upcoming days. It could be approved before the closing of the Ordinary Session of the Congress, although President Sheinbaum has also hinted that the approval can wait until September
The antitrust reform will significantly impact Mexico's antirust landscape. While this antitrust reform initially responds to domestic political pressure, it also aligns with the global trend of competition authorities prioritizing the elected government's agenda and issues most relevant to average consumers. The Bill reflects the recent industrial policy approach in our Constitution by stipulating that state owned companies, such as PEMEX and CFE, cannot be considered monopolies. With the inclusion of the new National Antitrust Commission (Comisión Nacional Antimonopolios, CNA) into the Ministry of Economy, Mexico's antitrust landscape is evolving into a "whole-of-government" approach likely to reflect the administration's priorities and intensively utilize enforcement tools in industries particularly sensitive to the working class and low-income communities, all while trying to ensure compliance with the USMCA.
Although the essentials of existing law are maintained, this bill brings important changes to the Mexican antitrust ecosystem. Changes include significantly higher fines, considerably shorter procedures in investigations and merger control (subject to budget constraints), lower merger thresholds, and more procedural sanctions. The legislation also takes decisive steps toward the adoption of compliance programs and damages litigation and includes a harsher approach on legal privilege. As opposed to previous bills, it does not include the concept of exploitative prices, but it adopts a stricter approach to abuse of dominance beyond foreclosure. Finally, the bill aims to formalize procedural criteria and internal organization decisions adopted by our antitrust authority in recent years.
What can we expect to see in Mexico in the short term? A combination of legacy and change. The formalistic idiosyncrasy of our judicial system is likely to keep shaping our antitrust enforcement and merger control proceedings. In addition, current key COFECE officials are expected to remain in place, and which will provide continuity in merger control and investigations. Differences will be more on the industries that will likely be targeted by the Government. It is no secret that the Mexican government's industrial policy includes a big push for state-owned companies, particularly in the energy sector (and perhaps also in the telecommunications sector, given the recent acquisition of Altán1 ). Industries that are closer to the everyday person are likely to be prioritized but we also expect the CNA to keep looking into digital markets, in coordination with the Digital and Telecommunications Agency. Good news is that returning antitrust jurisdiction over telecoms and broadcasting markets to the new agency will remove the extensive and procedurally difficult discussions between COFECE and IFT that pushed merger control timelines for months or resulted in costly, dual filings.
In sum, Mexico is likely to experience more vigorous antitrust enforcement aligned more closely with the Executive branch's priorities, similar to trend in other jurisdictions.
Below is a table summarizing of the key changes that global practitioners and companies with operations in Mexico should watch closely for their transactions and operations in Mexico:
The Current Law monetary thresholds are based on (i) size of the transaction, (ii) size of the target (assuming an acquisition of 35% or more), and (iii) size of the parties.1
Establishes a one-year statute of limitation for below-the-radar transactions.2
Reduction of the monetary thresholds by approximately 11%-17%.3 Reduction of the acquisition threshold from 35% to 30% of the shares or assets of the target.
Expands the statute of limitations for below-the-radar transactions to three years4.
Reduction of the monetary thresholds by approximately 17%-40%.4 Includes a new threshold for JVs and collaboration agreements based on the size of the parties.
Expands the statute of limitations for below-the-radar transactions to three years.
COFECE can extend its maximum period of 120 business days for cartel, abuse of dominance and unlawful mergers investigations up to 4 times5.
For merger control, the Current Law mandates that a decision should be issued in 60 business days (plus an additional extension of 40 business days).
The 120 business days investigation period can only be extended 3 times. Term to issue a final decision in investigations was also reduced from 40 days in the Current Law to 30 days6 . The Board of Commissioners period for ruling on merger-control filings is reduced from 60 to 30 days, from filing admission7. On barriers to competition and essential input investigations8, periods for (i) issuing a statement of objections, and (ii) for the Board of Commissioners to issue a ruling, are reduced from 60 to 40 days. Nonetheless, timelines will heavily depend on budget constraint and staff resources of the new commission.
Among others, Current Law establishes an exception to report (i) foreign transactions of companies acquiring targets with no assets or subsidiaries in Mexico,9 and (ii) acquisitions by investment funds merely for speculation purposes.
It removes both exceptions. Local Nexus with Mexico can now apply to transactions with targets that have sales to Mexican consumers even if having no assets or subsidiaries in Mexico. In addition, transactions by any type of investment vehicle can be captured regardless of its purpose.
Same as Current Law.
The concept of limiting the capacity to compete is not provided for in the Current Law as abuse of dominance conducts10. Current law focuses on foreclosure when addressing abuse of dominance
In addition to foreclosure, it considers that wrongfully “limiting the capacity to compete” of other agents in the market is within the scope of abuse of dominance.
Current Law establishes fines 11 for both substantive and procedural infringements, e.g., (i) submit false information, (ii) cartels (up to 10% of the company’s income), (iii) abuse of dominance (up to 8% of the company’s income), (iv) unlawful mergers (up to 8% of the company’s income), (v) unreported mergers (up to 5% of the company’s income), among others.
Provides for fines up to twice as high for substantive infringements (e.g., cartels, abuse of dominance, and unlawful mergers)12 and higher fines for procedural infringements such as providing false information.13 In addition, it includes coercive measures for obstructing dawn raids14 or failing to appear at a deposition15. Contemplates limitations to contracts with government entities if sanctioned for bid rigging16. Maximum fines for foreign entities would also be significantly higher17.
Legal privilege has virtually no regulation in Mexico. COFECE issued some Regulatory Provisions19, establishing a qualification procedure, at the request of agents. A qualifying committee within COFECE reviews the requests and determines eligibility. If applicable, excludes or returns the information, restricting access to non-authorized officials to ensure protection.
Establishes a “first look, then-decide” procedure similar to COFECE’s current provisions. Suspensive and applicable to all procedures. In-house lawyers and economists will not be considered to have privilege.20
The Current Law does not provide any benefits or regulations regarding the implementation of antitrust compliance programs.
Compliance programs that are certified by the new Antitrust National Commission (CNA) can reduce fines. The CNA will certify compliance programs (subject to an application fee), and such certification will be valid for three years.21
Same as Current Law.
Comisión Federal de Competencia Económica (COFECE, Federal Economic Competition Commission)
Independent constitutional body, autonomous from the executive branch. Seven commissioners, including a Chairperson, picked by the President from a pre-selected shortlist of those passing applicable technical exams and ratified by the Senate. They serve staggered terms of nine years.
Comisión Nacional Antimonopolio (Antitrust National Commission)
Independent agency attached to the Ministry of Economy. 22 Five commissioners designated by the executive branch and ratified by the Senate.23 Seven-year staggered terms. President will directly appoint the Chairperson for a three-year term, with the possibility of one reelection. Executive branch can remove Commissioners due to serious cause.
Instituto Federal de Telecomunicaciones (IFT) has jurisdiction over antitrust matters in telecoms and broadcasting sectors. COFECE has challenged IFT for jurisdiction over certain sectors (e.g. digital markets), which has resulted in delays in merger control cases, for instance.
CNA has jurisdiction over antitrust matters including telecoms and broadcasting. No more merger control jurisdictions or investigations disputes with the Telecommunications agency. The Proposal establishes procedures to review cross-ownership, concessions, determination of Predominant Economic Agents and asymmetric regulation for those dominant players. Strict coordination with the new Digital and Telecommunications Agency.24
The Current Law provides for the possibility to carry out dawn raids and depositions to investigate potential violations to the law.25 It includes the obligation to “facilitate access” during a dawn raid and fines for not showing to a deposition.
Establishes higher fines for not showing to a deposition or not cooperating during interrogation 26. The lack of cooperation during dawn raids, depositions and other proceedings is not explicitly mentioned as an aggravating factor when calculating fines.
The Current Law provides for the possibility to apply for a Leniency program in cartel cases.27 The first applicant is entitled to a full fine waiver and avoid criminal prosecution regardless of whether the investigation has already begun or not.28
It also includes fine waivers or reductions for abuse of dominance and unlawful mergers, provided that the parties cease the conduct and offer remedies at any stage of the investigation phase.29
The leniency program is more restricted. The full waiver benefit is available to the first applicant only if investigation has not started yet. If it has already begun, the benefit could be of up to 50.30
Limits the fine waiver benefit to the ones requesting it before the second extension of the investigation procedure in abuse of dominance and unlawful mergers.31 If requested later, only a 50% maximum fine reduction is available.
Proposes that the Agency will have new faculties to issue specific regulations on fine reduction and leniency programs.40
The Current Law contemplates the possibility of claiming damages until the resolution of the Commission has become “final”. This could be interpreted as having to wait until the court decision in an amparo proceeding.
Clarifies that individual claims or class actions can be initiated as soon as the CNA issues a decision and that the statute of limitations will start with such decision.
Considers the possibility of posting guarantees in response to the imposition of interim measures. Limits to the imposition of interim measures are contained in regulatory provisions issued by the Commission
Does not include the possibility of posting guarantees. Limits to the imposition of interim measures will fall on regulations to be issued by the executive, for which judicial review will remain available. Eliminates pervious proposals in which market inquiry proceedings (art. 94) were explicitly mentioned as subject of interim measures.
No longer includes the possibility for asset divestiture in telecoms markets to guarantee compliance with imposed measures as in previous proposals32.
The Current Law does not include special provisions for claims coming from governmental authorities.
Includes the possibility for the Ministry of Economy to claim law violations. The Commission must review these complaints with “available information” within 30 days to determine if an investigation is warranted. If not, it must notify the Ministry of the reasons for not starting an investigation33.
