Before a Public Takeover Bid | Mexico | Global Public M&A Guide

3. Before a Public Takeover Bid

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

3.1 Shareholders’ rights in publicly traded companies

Shareholding	Rights
One share of the capital stock of the publicly traded company (the “Company”)	In the absence of the minimum number of members of the audit committee and when the board of directors has not appointed any interim members according to the provisions of Article 24 of the Mexican Securities Law, any shareholder may request the chairperson of the board to call, within a term of three calendar days, a general shareholders’ meeting which shall make the corresponding appointment. In the event the call is not made within this period, any shareholder may appear before the judicial authority of the Company’s legal domicile to request such court to call the shareholders’ meeting. In the event that the meeting cannot be convened or, if convened, the appointment is not made, the judicial authority of the Company’s legal domicile, upon request and proposal by any shareholder, shall appoint the corresponding directors, who shall hold office until the general shareholders’ meeting makes the final appointment. To call for a general shareholders’ meeting when (i) none have been held during the last 2 preceding tax years, or (ii) when the ones held during such period have not discussed the matters set forth in Article 181 of the General Business Entities Law. To attend and vote at general shareholders’ meetings, except in those cases when the CNBV has authorized the Company to issue limited-voting rights shares, restricted-voting shares or non-voting shares (i) not exceeding 25% of the outstanding capital of the Company or such higher percentage authorized by the CNBV and provided that such shares shall be converted into ordinary shares within 5 years after placement, or (ii) in excess of 25% of the outstanding capital of the Company on the basis of the holder’s nationality. To have access, at the Company’s offices, to the information and documents related to each of the items included in the agenda of the relevant shareholders’ meeting, free of charge and at least 15 calendar days before the date of the meeting. To prevent the general shareholders’ meeting from considering any issues submitted in the agenda under the heading of general issues or another analogous concept. To be represented at the shareholders’ meetings, by persons who evidence their representation by means of proxy forms prepared by the Company and made available to such shareholders through stock exchange intermediaries or at the Company, at least 15 calendar days before such meeting. To enter into shareholders’ agreements, as provided in Article 16 of the Securities Market Law.
5% or more (at a general shareholders’ meeting)	To veto a resolution approving measures intended to prevent the acquisition of shares that will transfer the control of the Company to third parties or to the existing shareholders, whether directly or indirectly (poison pill actions).
5% or more of the capital stock of the Company (with or without voting rights)	The filing of any liability action resulting from acts or omissions of management or the members of the surveillance committees of the Company.
For each 10% of the capital stock of the Company	To appoint and revoke the appointment of a member of the board of directors at a shareholders’ meeting. To request, from the chairperson of the board of directors or of the audit and corporate practices committees, the calling of a general shareholders’ meeting. To request the deferment of the vote on any issue with respect to which they consider themselves insufficiently informed. The deferment will be in place for three calendar days and will not require the issuance of a subsequent call notice for the meeting to be reconvened.
20% or more of the capital stock of the Company	To oppose in court, individually or in the aggregate, the resolutions of the general shareholders’ meetings with respect to which they have voting rights, including those with limited or restricted voting rights.
75% or more of the capital stock of the Company	Constitutes quorum to hold an extraordinary shareholders’ meeting whereby any of the following resolutions, among others, may be adopted pursuant to the affirmative vote of 50% or more of the capital stock of the Company: change in the corporate purpose; transformation; merger; and split-off.
95% or more of the capital stock of the Company	To request the cancellation of the registration of the securities of the Company in the National Securities Registry.

3.2 Use of NDAs and due diligence

Publicly traded companies have continuing disclosure obligations and, therefore, the following information must be made available to the general public:

Reports concerning corporate actions.
Quarterly reports, including financial statements, and the observations and analysis of the administration regarding the operations’ results and the financial condition of the Company.
Annual audited financial statements. The opinion of the independent auditors must comply with international audit norms. For foreign issuers the opinion must comply with audit norms of their home country).
Annual reports regarding the activities of the audit committee and the corporate practices committee.
Reports concerning mergers, split-offs, acquisitions or sales of assets.
Reports of relevant events.
Reports concerning policies and operations.
Reports about the positions maintained by the Company in derivatives.
Any other information determined by the CNBV.

Additional documentation or information may be requested and must be delivered to the offeror in a public M&A transaction, provided it does not entail the disclosure of non-public material information breaching the restrictions established under the Securities Market Law. It is common practice to execute a non-disclosure agreement prior to the delivery of information to an offeror.

3.3 Investor rights and restrictions

See 3.1.

3.4 Method of acquisition

As further discussed in 4 (Effecting a Takeover), a publicly traded company may be acquired via a public tender offer, whereby the totality or a part of the stock of the publicly traded company is acquired by the offeror, either through a friendly takeover or a hostile takeover. Hostile takeovers are extremely rare in Mexico.

Friendly takeovers are either voluntary or mandatory public tender offers, recommended by the board of directors of the publicly traded company. The minimum term of any public tender offer shall be 20 business days. The offer must be allocated proportionally, regardless of the time of acceptance. The offeror may change the terms of its offer before its completion if the new terms are more favorable for the offerees or if it was so established in the corresponding brochure. If the CNBV considers the amendments to the terms of the offer to be significant, the term for the offer must be extended for an additional period of at least five business days. In any case, the public must be informed of such amendments to the offer through the same means pursuant to which the offer was originally made. The offerees that had accepted the offer shall have the right to decline in the event of significant amendments.

The procedure and requirements for mandatory tender offers must be followed when the offeror intends to acquire or attain, directly or indirectly, 30% or more of the common stock of a publicly traded company, through one or several simultaneous or successive transactions. In such event, the following rules apply:

The offer shall be extended to the different series of shares of the Company, including those with limited or restricted voting rights and non-voting shares.
The consideration offered must be the same, regardless of the class or type of shares.
The offer shall be made for (i) the percentage of the capital stock of the Company equivalent to the proportion of common stock intended to be acquired, with respect to the total number of shares or for 10% of such capital, whichever is greater, provided that the acquisition does not imply the offeror taking control; or (ii) 100% of the capital stock when the buyer intends to acquire control (unless the CNBV has authorized a smaller percentage).
The buyer shall indicate the maximum number of shares the offer covers and, if applicable, the minimum number on which such acquisition is conditioned.

For the purposes of the Securities Market Law, “control” means the capacity of one person or a group of persons to carry out any of the following:

To impose, directly or indirectly, any decision at a general shareholders’ meeting (or equivalent body) or to appoint or remove the majority of the directors (or their equivalent).
To hold ownership rights allowing a person to directly or indirectly exercise voting rights in excess of 50% of the capital stock of a Company.
To dictate, directly or indirectly, the management, strategy or principal policies of a Company, either through the ownership of securities, by virtue of an agreement or otherwise.

Any acquisitions contravening these requirements shall be null and void and the persons involved shall be liable vis-à-vis the other shareholders, who may be indemnified for losses and damages.

3.5 Insider dealing rules

See 6.1.

3.6 Disclosure of shareholdings

Initial disclosure threshold: any person or group of persons acquiring, directly or indirectly, in the stock exchange or over the counter, through one or several transactions, simultaneously or successively, shares of a publicly traded company resulting in an ownership interest equal to or greater than 10% (but not exceeding 30%), must disclose such circumstance to the investing public the next business day following the acquisition. Furthermore, such person or group of persons shall inform of its intention of whether or not to acquire a significant influence in the publicly traded company.
Subsequent disclosure thresholds
1. Related parties of publicly traded companies who directly or indirectly increase or decrease their capital interest by 5% through one or several simultaneous or successive transactions must disclose such circumstance to the investing public the next business day following the acquisition, as well as their intent to acquire or not a significant influence (or increasing it) in such publicly traded companies.
2. Any person or group of persons who, directly or indirectly, own 10% or more of the shares of a publicly traded company, as well as the members of the board of directors and relevant executive officers of such persons, must inform the CNBV, and the investing public when applicable, of the acquisitions or sales made of such securities.
Aggregation of interests of “concert group”
“Group of persons” as used under the Securities Market Law, means those individuals or legal entities having an agreement amongst each other to aggregate their interests to take decisions in concert. It is presumed, unless otherwise demonstrated, that the following constitute a “group of persons”:

Any individuals related either by blood, marriage or civil kinship up to the fourth degree, the spouse and concubine.
Entities belonging to the same consortium (group of entities linked by one individual or a group of persons having control over the same) or corporate group (group of entities organized under direct or indirect capital stock participation structures, in which the same company maintains control over such entities), and the persons having control over such entities.

3.7 Minority shareholders’ rights

The Securities Market Law establishes minimum percentages as to minority shareholders’ rights. These minimum percentages may be further decreased in the Company’s by-laws, thereby broadening these protections to holders of fewer shares.

Please refer to the table in 3.1 for further information on minority shareholders’ rights provisions under the Mexican Securities Law.

3.8 Mandatory offer threshold

When an offeror intends to acquire or attain, directly or indirectly, 30% or more of the common stock of a Company, a mandatory tender offer must be carried out and the offer shall be made for the percentage of the capital stock of the Company equivalent to the proportion of common stock intended to be acquired, with respect to the total number of shares or for 10% of such capital, whichever is greater, provided that the acquisition does not imply the offeror taking control.

When the offeror intends to acquire or attain, directly or indirectly, control, a mandatory tender offer must be carried out and the offer shall be made for 100% of the capital stock (unless the CNBV authorizes a smaller percentage).

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