“Change in control under Ecuadorean merger control regulation”

By Diego Pérez Ordóñez and Luis Marín Tobar

Ecuador is a jurisdiction with a strict merger control regime, with a short 8 calendar day filing deadline, restrictions on closing prior to obtaining regulatory clearance and severe economic and coercive penalties for gun-jumping. Local law, the Organic Law for the Regulation and Control of Market Power (“LORCPM”), enacted on October 2011, which established the first merger control framework in the country, determines that transactions and agreements where a “change or taking of control” exists, are deemed “concentration agreements” and may be subject to local merger control, if either of two (a market share, and/or turnover) thresholds are met. Although foreign frameworks generally clarify when and how change of controls are deemed concentrations, and introduce requirement such as the lasting basis of the change in control, or the structural modification of the market, the provisions of the local legal framework do not specifically tend to this limitation. The regulation of these limitations has only been introduced throughout the years of practice by guidance documents and interpretations of the Merger Control Intendancy.

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