[Last updated: 1 January 2025, unless otherwise noted]

2.1 Main legal framework

The main rules and principles of Chilean law relating to public takeover bids can be found in:

• Chapter XXV of Law No. 18,045 (the "Securities Act") relating to tender offers; and
• General Ruling No. 104 (the "Tender Offer Rules") issued by the Financial Market Commission (the "Commission").

2.2 Other rules and principles

While the aforementioned chapter of the Securities Act and the Tender Offer Rules contain the main legal framework for public takeover bids in Chile, there are a number of additional rules and principles within the Securities Act, Law No. 18,046 (the "Corporations Act") and other rulings issued by the Commission that are to be taken into account when preparing or conducting a public takeover bid, such as:

1. The rules relating to the disclosure of significant shareholdings and other material information in listed companies based on the Securities Act and rulings issued by the Commission. For further information, see 3.4 below.
2. The rules relating to insider dealing and market manipulation.
3. The rules under the Securities Act and regulations issued by the Commission relating to the public offering of securities.
4. The rules and regulations regarding merger control. These rules and regulations are not further discussed herein.

2.3 Supervision and enforcement by the Commission

The Commission is the securities regulator in Chile and oversees and controls public takeover bids.

The Commission has a number of legal tools that it can use to supervise and enforce compliance with the public takeover bid rules, including administrative fines. In addition, criminal penalties could be imposed by the courts in the case of non-compliance.

2.4 General principles

The following general principles apply to public takeovers in Chile. These rules and principles generally flow from several provisions applicable under the Tender Offer Rules and the Securities Act:

1. subject to certain exceptions, a mandatory tender offer is required in order to consummate any acquisition that would allow the purchaser to obtain, either directly or indirectly, the "control" of a Chilean listed corporation;
2. all holders of the securities of an offeree company of the same class must be afforded equivalent treatment;
3. the offer price must be clearly determined, and it must be payable in cash or with securities that have been duly registered and can be publicly offered as consideration payable for the offered shares;
4. each member of the board of directors of the offeree listed corporation must provide a written report reflecting their individual opinion with respect to the convenience (or inconvenience) of the offer to the shareholders of the company; and
5. all shareholders that have tendered their shares within the offer period have the right to withdraw their acceptances at any time until the end of the offer period.

2.5 Foreign Investment Restrictions

Foreign investments are not restricted in Chile. Unless in the context of specific industries and sectors which must have Chilean national ownership, such as fishing companies, 100% foreign ownership of investments is possible. Therefore, from a foreign investment perspective, takeovers are not generally subject to prior governmental or regulatory approvals. The above is notwithstanding customary anti-trust approvals and approvals required for certain specific industry sectors (e.g., insurance, banking and telecoms), which need special authorizations for a change of control.

Although not a requirement or restriction, foreign investors may register their foreign inward investments with Chile's Foreign Investment Agency, which benefits them primarily because of foreign exchange considerations. A foreign inward investment that is registered with Chile's Foreign Investment Agency will provide the investor with the right and guarantee of access to the foreign exchange market in order to perform future returns of capital, dividend distributions and repatriation of the sale proceeds of the investment, in foreign currency.

A cash investment would also allow the foreign investor to register the foreign inward investment with the Central Bank and would be a valuable supporting tool to keep track of the investment and the cost basis incurred by the investor for Chilean tax purposes.