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

6.1 Insider dealing

For the purposes of the Securities Market Law, it is deemed that certain individuals of the Company have access to insider information. The burden of proof is on such individuals. Such individuals shall not:

• enter into or instruct the execution of transactions, directly or indirectly, in relation to any kind of securities issued by the Company or any negotiable instruments representing any such securities (including options or derivatives having, as underlying, the aforementioned securities or instruments, all of which are hereinafter referred to as “shares” or “securities”), the quotation or price of which may be influenced by such information, as long as it is classified as inside information;
• provide or disclose the information to any third party, except when by reason of employment, position or commission, the individual to whom it is provided or transferred must know such information; or
• make recommendations concerning any kind of securities issued by the Company, the quotation or price of which may be influenced by such information, as long as it is classified as inside information.

The restricted individuals are:

• the members and the secretary of the board of directors, the examiners, the chief executive officer and other relevant officers, as well as the managing directors and the external auditors of the Company or entities controlled by it;
• the individuals who directly or indirectly hold 10% or more of the shares representing the capital stock of the Company;
• the members and the secretary of the board of directors, examiners, the chief executive officer and other relevant officers, the managing directors and external auditors, or any persons equivalent to the foregoing, of any entities that directly or indirectly hold 10% or more of the capital stock of the Company;
• the members and secretary of the board of directors, examiners, the chief executive officer and other officers immediately below the latter, the statutory comptroller, managing director and agents, or any persons equivalent to the foregoing, of stock exchange intermediaries or of any individuals or legal entities providing independent or personal subordinated services to the Company, in any relevant event constituting privileged information, as well as of the legal entity, which may or may not have the nature of an issuer, that had some relation or financial, administrative, operational, economic or legal link with the Company to which the relevant event in question is attributed to, or to those who participated in any nature with the act, event, or happening relative to said event;
• the shareholders who directly or indirectly hold 5% or more of the capital stock of financial entities, when these act as issuers;
• the shareholders who directly or indirectly hold 5% or more of the capital stock of the holding companies of financial groups, as well as those who directly or indirectly hold 10% or more of the capital stock of other financial entities, when all of them are members of the same financial group and at least one of the members of the group is the issuer;
• the members and the secretary of the board of directors, the chief executive officer and other officers immediately below the latter, the statutory comptroller and the managing directors of any holding companies of financial entities mentioned in the preceding paragraph;
• the individual or group of individuals who have a significant influence on the issuer and, as the case may be, on the companies composing the corporate group or consortium to which the issuer belongs;
• the individuals that have decision-making powers over the issuer; and
• the individuals or legal entities that trade securities deviating from their historical market investment patterns and who reasonably could have had access to inside information through any of the individuals mentioned above. The individuals who have reasonable access to insider information are, in general, certain family members, partners, associates and co-owners, as well as any person who had contact with any of the referenced individuals.

Most of such restricted individuals are, in general, not allowed to acquire, directly or indirectly, any securities issued by an issuer to whom they are “related”, during a term of three months from the last transaction executed on the Company’s securities.

Publicly traded companies are required to establish guidelines, policies and control mechanisms in connection with transactions carried out by their directors, executive officers and employees who, by virtue of their employment, position or commission, have or may have access to insider or confidential information related to any processes for the registration of securities with the National Securities’ Registry, public offerings, acquisition or transfer of shares held by the same issuers, or transactions ordered by the investing public.

Anyone who, being under legal or contractual obligation of confidentiality, reserve or secrecy, provides or transfers insider information to a third party, may be subject to administrative, civil and criminal liability, which carries an imprisonment term of 3-15 years.

6.2 Information to be disclosed

Publicly traded companies must disclose, to the CNBV and the stock exchange, certain information regarding the operations of the Company, including, without limitation, corporate and financial information. See 3.2.

6.3 Due diligence and market abuse rules

In Mexico, there is no obligation to provide due diligence information to a potential offeror. Thus, this situation could be used by a target company to delay or inhibit a takeover. However, the common practice is for the target company to provide due diligence information to a potential bidder if the proposed transaction is friendly. If the proposed transaction is hostile, the offeror will have to rely on the Company’s publicly available information.

Furthermore, the Securities Market Law establishes provisions to prevent abuse practices dealing with privileged information. See 6.1.

6.4 Anti-takeover defense mechanisms

Hostile public M&A transactions are permitted in Mexico. However, in practice, such acquisitions are uncommon. Furthermore, in the proposed recent hostile acquisition of control by Grupo Mexico of Grupo Aeroportuario del Pacífico, the Supreme Court of Justice ruled that publicly listed companies may adopt necessary albeit not absolute corporate measures to deter hostile takeovers as long as such measures do not create an obstacle to friendly takeovers. This sets a non-binding court precedent that may impact the viability of hostile takeovers.

The most effective and most used anti-takeover defense mechanisms are found in the by-laws of publicly traded companies and by means of measures similar to “poison pills” through a capital increase. However, it is not permissible to establish a provision that completely deters the acquisition of a target company. In this regard, the principal provisions that cannot be established in the by-laws of a publicly traded company are the following:

• Restrictions of any nature on the transfer of the shares of a target company. As an exception, it is possible to require the pre-approval of the board of directors for the acquisition of securities of a Company over and above a certain percentage. For these purposes, the criteria that should be followed by such board of directors to issue a resolution shall be included, along with the term for the issuance of such resolution, which shall not exceed three months.
• Provisions that establish causes for the exclusion of a shareholder or restrictions on the exercise of the rights of a shareholder to be excluded from the Company.
• Provisions that increase or decrease the economic rights of a shareholder.
• Provisions that restrict friendly takeovers.

6.5 Deal protection methods

In Mexico, it is common for parties of a friendly acquisition transaction to agree penalty clauses in the event the deal is not closed or terminated by either party due to breach of an exclusivity covenant.