Costa Rica: Mergers and acquisitions need prior approval

The parties to a proposed merger or acquisition in many cases must seek prior approval of the Commission for the Promotion of Competition, before concluding the transaction, following the entry into force earlier this month of a series of reforms to the Competition Law of Costa Rica, adopted last September by the Legislative Assembly.

Previously, prior consultation was voluntary.

Nevertheless, the Commission had the power to review any completed transaction, in order to determine the existence of anticompetitive effects.

In such a case, the Commission could impose various penalties, including fines significant and price controls and limits to expand the business.

Under the new regime, all concentrations, including a merger, acquisition or a purchase of productive assets involving competitors, must be approved in advance, when the productive assets of the parties (or their parent), or the total income generated by them in Costa Rica during the last fiscal year is at least 30,000 times the minimum wage (about $15 million at current exchange rates).

For more information, please contact David T. Reuben, at [email protected], or (506) 8893-5667