1E9Ct5D

The second situation that this first rule establishes is the following: pursuant toSection I of Article 17 of the RLFCE perfection can also be considered to occur when“the condition precedent to which such act is subject” is fulfilled;b) In a second premise, even when a specific legal act has not been carried out, thereis actual or legal control over another economic agent, or parts of such economicagent are acquired indirectly (through trusts). Here the difficulty lies in knowingat what point the control begins and, therefore, on what date the prior notificationmust be made;c) In the case of corporate mergers, at the time of the signing of the merger agreement;d) When the acquisition is carried out through successive acts, when the last of suchacts are perfected and the thresholds for mandatory notification are surpassed.Notwithstanding the above, the participants in a concentration may not close the transactionuntil they have waited 10 days after having given notice thereof and the Commissionhas not prohibited it during that period. If the merger is prohibited within theabove mentioned time period, the participants must wait for the ruling of the Commissionin order to be able to carry out the concentration.A very important case that should be added and that clarifies a rule that the CFC had establishedpreviously, although with little precision, is related to mergers carried out abroad. Foreigncompanies that have assets, subsidiaries, or investments in Mexico and that decide tomerge with another foreign company have to give notice of the merger before the material orlegal effects occur in Mexico. This means that the notification must be made before the agreementor contract that creates the concentration is perfected abroad, since it is understood thatonce the concentration is carried out abroad, it will automatically have effects in Mexico.Regarding sanctions, economic agents that violate the law may be subject to the “partialor total divestment of what has been unlawfully concentrated, without prejudice of anyapplicable fine.” This sanction is a weapon in the hands of the CFC in the event that a concentrationis perfected before authorization is granted by the CFC and ultimately suchauthority considers it to be unlawful. There is, however, the serious problem of “scrambledeggs,” which are always difficult, if not impossible, to separate.In the area of concentrations it is important to mention that their analysis by the CFCis based on the principles detailed below.First, the CFC must analyze if the notified concentration could affect (diminish, deteriorate,or impede) competition or free participation in the market, for which it has toconsider the following elements “as evidence” of such anticompetitive effect and detrimentto free participation in the market:a) That the concentration can confer on the economic agent the power to set pricesunilaterally or to substantially restrict capital or supply in the relevant market,without the competing economic agents being able to counteract such power;253Economic Competition