The prestigious international publication “Latin Lawyer” has published an article on the new accelerated merger protocol approved by the Ecuadorian antitrust authority as a measure to fight against the effects of Covid-19 in the country. To deal with this issue, the entity had the expert opinion of our Partner Xavier Rosales.
“It was something that had been expected for a long time, and it is positive for the development of companies,” says our Partner in the text, who believes that the head of the antitrust authority, Danilo Sylva Pazmiño, has a more open approach than previous ones, which facilitates the authorization process for non-problematic transactions.
As explained in the text, the Superintendency of Control of Market Power (SCPM) approved on April 20th a draft resolution that creates expedited reviews for certain transactions that require notification prior to the merger. According to local professionals, COVID-19 has caused widespread delays in the agency’s ability to examine and investigate certain transactions.
This new protocol will ensure that an agreement can be approved within 40 days. The authority will have 15 days to send its conclusions to its decision-making body that will have 25 days to issue a final decision. Previously, the authority had 50 days to send its conclusions to the First Instance Resolution Commission (CRPI), and the decision-making body 60 to issue a decision – with the possibility of requesting another 60 days if the merger is very complex.
This accelerated merger system will be available for holding companies that do not directly or indirectly do business in Ecuador, companies merging with a combined market share of less than 30% in all relevant markets, and dealings with companies in bankruptcy that have a credible defense.