BOLIVIA

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Content last updated: 25-10-2019

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  • Merger Control Regime
  • Merger Screening
  • Merger Filing

1. Overall description of merger control regime

1.1 Supranationality

1.1.1 Is the jurisdiction a member of/party to a supranational jurisdiction?

No.

1.1.2 Is the jurisdiction itself a supranational jurisdiction?

No.

1.1.3 If the answer to Section 1.1.1 and/or 1.1.2 above is in the affirmative, what are the implications hereof?

Not applicable.

2. Nature of merger control regime

2.1 Mandatory or voluntary

2.1.1 Is filing mandatory or voluntary?

For companies operating in regulated industries, filing is mandatory.

Companies operating outside of regulated industries are not subject to merger control.

2.2 Suspensory effect

2.2.1 Must completion of the transaction await clearance by the relevant authorities?

Yes, the applicable norms of the regulated industries require clearance prior to completion of the merger.

1. What type of transactions are caught by the merger control regime?

1.1 Concentrations

1.1.1 Type of transactions that are caught by the merger control rules?

Only regulated sectors are caught within the merger control rules. Regulated sectors that contain certain merger control rules are:

Transportation, refining and commercialization of hydrocarbons.

Electricity generation, transmission and distribution.

Telecommunications providers that provide services in Bolivia.

Banks and other financial institutions, including loans and savings cooperatives or associations and foreign exchange houses.

Insurance and registered foreign reinsurance companies.

Stock exchanges and investment funds.

1.2 Joint ventures

1.2.1 What types of joint ventures are caught by the merger control rules?

Joint ventures are not caught within the scrutiny of merger control, except if they result in the merger or change of ownership of the relevant regulated company.

1.3 Definition of "control"

1.3.1 How are the concepts of "control" and "change of control" defined?

To trigger regulatory control, mergers must involve change of effective control over the relevant regulated company.

“Control” is defined in statutory law, such as the Electricity Act, as the ability of a company to control others through its direct or indirect participation in more than 50 per cent of the capital stock or voting rights or in the control of the direction of subsidiaries or affiliates.

1.4 Minority shareholdings

1.4.1 Are minority and other interests less than control caught by the merger control rules?

No, acquisition of minority shares does not trigger merger control mechanisms. However, changes in the shareholder structure of regulated companies must be reported to the corresponding authority.

For example, art. 158 of the Financial Services Act states that any transfer of shares in a regulated entity must be notified to the financial conduct authority and if as a result of the transfer of shares any shareholder owns more than 5% of the shares of the regulated company, such shareholder must also provide an affidavit regarding their financial situation.

2. Establishing jurisdiction for notification of mergers

2.1 Merging parties/undertakings concerned

2.1.1 Which undertakings are considered parties to the merger ("undertakings concerned") in the various types of transactions identified under Section 1.1.1 and 1.2.1.

In a merger, the undertakings concerned are each of the merging entities.

In acquisitions, of regulated entities, the undertakings concerned are each of the acquirer and the target entities.

In case of entry of a new shareholder in a pre-existing regulated company, which leads to a change in the quality of control for the remaining controlling shareholders, the undertakings concerned are the newly entering shareholder alongside with the remaining controlling shareholders.

Joint ventures are not regulated, unless they involve the acquisition or change of control in a regulated entity.

2.2 Date for establishing jurisdiction

2.2.1 Which date is relevant for concluding whether the transaction is notifiable?

The relevant date is that of the execution of the preliminary merger agreement between the companies.

2.3 General thresholds

2.3.1 Threshold(s) for when a concentration must be notified under the general merger control regime?

There is no general merger control regime in Bolivia.

Mergers of companies operating under specific regulated industries trigger merger control mechanisms. There are no thresholds considering aggregate turnover or other factors.

See Section 2.4.1 below for more information on the regulated sectors.

2.3.2 For each threshold, can the threshold be triggered by only one party having local turnover?

Yes. Even if only one of the companies operates under a regulated industry, merger control would be triggered.

2.3.3 For each threshold, can the threshold be triggered without any party having local turnover?

No.

2.3.4 Are there any circumstances where transactions falling below these thresholds may be still investigated?

Not applicable.

2.4 Other national thresholds for ex ante merger control (e.g. sector-specific rules)

2.4.1 Relevant thresholds for sector-specific or other ex ante merger control rules?

Merger control is imposed on specific regulated sectors and industries in Bolivia. As a result, certain regulations that pertain to mergers, acquisitions and joint ventures can be found in the Electricity Law, the Telecommunications Law, the Hydrocarbons Law, the Financial Services Law, the Securities Law and the Insurance Law.

Therefore, merger control filing is required even if only one of the undertakings concerned operates in regulated sectors of the economy. There are no thresholds regarding aggregate turnover.

2.4.2 Are any such schemes mandatory or voluntary?

Mandatory.

2.5 Foreign-to-foreign mergers

2.5.1 Do any exemptions, special thresholds etc. apply to foreign-to-foreign mergers, i.e. where none of the undertakings concerned is domiciled in the jurisdiction?

No.

3. Calculation and allocation of turnover, asset value, transaction value etc.

3.1 Relevant turnover

3.1.1 How is turnover defined (e.g. is income from other sources than "ordinary activities to be included, and how are rebates, taxes, internal turnover etc. treated)?

Not applicable. Please see Section 2.3.1 above.

3.1.2 Identification and link to any official rules, guidance etc. on how to calculate turnover?

Not applicable.

3.2 Relevant period for calculation of turnover

3.2.1 Which financial year(s) is relevant for the calculation of turnover?

Not applicable.

3.2.2 Should adjustments be made for e.g. divestitures, acquisitions, closings and other changes of the economic reality of the undertaking concerned made after or during the relevant financial year?

Not applicable.

3.3 Relevant undertakings for the calculation of turnover

3.3.1 The "undertakings concerned", i.e. which parties?

See Section 2.1.1 above.

3.3.2 The undertakings whose turnover is taken into account?

Not applicable.

3.3.3 Shall the turnover of the existing seller be included in the target's group turnover?

Not applicable.

3.4 Geographical allocation of turnover

3.4.1 The principles for the geographical allocation of turnover?

At least one of the undertakings concerned must be incorporated in Bolivia.

3.5 Valuation and allocation of assets

3.5.1 The principles for valuation and allocation of assets?

Not applicable.

3.6 Calculation of other thresholds

3.6.1 The principles for calculation of metrics for other thresholds (e.g. transaction value, market share, share of supply etc.)?

Not applicable.

3.7 Special rules

3.7.1 Do any special rules or principles apply to the calculation, allocation etc. of turnover, assets etc. for specific undertakings (e.g. State-owned undertakings, investment funds, credit and financial institutions, insurance companies, financial holding companies, others)?

Not applicable.

3.7.2 Does any exemptions apply?

Not applicable.

1. Practical information

1.1 Responsibility for filing

1.1.1 The parties responsible for filing?

The Bolivian-regulated company (whether acting as acquirer or not) is required to file.

In case of transactions involving two regulated companies, the notification must be submitted by both companies.

1.2 Deadlines for filing

1.2.1 Are there any mandatory deadlines for filing, and, if so, how these are calculated?

There are no uniform rules regarding deadlines. In the specific sector of financial institutions, the filing must be made within 30 business days from the execution of the preliminary merger agreement between the companies.

1.2.2 Are there any sanctions for not filing within the deadlines?

Failure to adequately file or obtain regulatory authorization will typically result in the initiation of a regulatory procedure for the revocation of the license or concession under which the regulated activity is carried out.

1.3 Early filing

1.3.1 Is it possible to file before the signing of merger agreement?

There are no specific provisions in this regard.

1.4 Filing fees

1.4.1 Are there any fees for filing, and, if so, please describe how such fees are calculated?

Filings before the specific sector regulators have no filing fees.

1.4.2 When must the filing fee must be paid?

Not applicable.

1.5 Publicity

1.5.1 When and in which format will the authority publish receiving a notification?

There are no specific rules for some of the regulated industries. Where regulations exist (e.g. the financial sector), a notice regarding the receipt of a notification will be published as a relevant matter under disclosure standards online.

1.5.2 How will the authority in general handle the case publicly, e.g. will it usually comment in the media, send out press releases etc.?

In general, the regulators abstain from commenting in the media.

1.5.3 Will third parties be able to review the notification?

There are no specific regulations regarding this issue.

2. Procedure and timing

2.1 Normal and simplified procedures

2.1.1. Does the regime allow for a simplified (fast track) procedure, and, if so, what are the criteria for using the simplified procedure?

No, there are no simplified procedures available.

2.2 Procedural stages (cf. timetable below)

2.2.1 The various stages of (i) a simplified procedure and (ii) a normal procedure?

The preparation of a filing for a regulated company will be different depending on the regulatory agency involved.

The procedural stages of a normal notification procedure in the potential merger of financial institutions consist of the following steps:

1. Along with the required documents, and within 30 days from the execution of the preliminary merger agreement, the regulated company must file a brief before the agency, requesting approval of the merger

2. The regulatory agency will review the documents and may reject the documents and communicate this rejection to the requesting company.

3. Within 30 days from the filing of the brief requesting authorization, the regulatory agency will issue an Administrative Resolution, granting or denying the authorization requested. The denial could be based on i) unresolved problems with the documents presented, or ii) opposition of the regulatory agency to the report regarding the viability of the merger. 

4. Having the authorization of the regulatory agency, the merging parties can execute the definitive merger agreement, and must file the definitive agreement within 3 days after its execution.

2.2.2 Is pre-notification contact with the relevant authorities customary/obligatory/encouraged/etc.?

Pre-notification contact with the authorities is customary. However, there are no specific regulations regarding such contacts.

2.2.3 Are there any sanctions for not filing within the deadlines?

Please see Section 1.2.2 above.

2.3 Timetable (cf. timetable below)

2.3.1 The statutory timetable/deadlines for review of a notification?

The filing and approval procedure will vary depending on the regulatory body for regulated companies and may take approximately 40 days to be completed.

2.3.2 Can the statutory timetable/deadlines be suspended ("stop-the-clock"), and if so under which conditions?

There are no provisions in this regard.

2.3.3 If pre-notification with the relevant authorities contact is possible/customary, how long will the duration of such contact usually be?

Not applicable.

3. Format and content of notification

3.1 Notification forms

3.1.1 Must the notifying parties use any mandatory notification forms, e.g. for simplified and normal procedures, and, if relevant, add a link to the relevant forms?

No, there are no mandatory notification forms.

3.2 Supporting documentation

3.2.1 List of the supporting documentation which must as a minimum be submitted along with the notification?

The preparation of a filing for a regulated company will be different depending on the regulatory agency involved. For most regulated public services, filing involves describing the transaction of the involved parties and, to a certain extent, the ability of the regulated company to continue to provide the public service.

Financial entities and banks have more stringent and detailed filing requirements when requesting authorization for a merger and may involve greater scrutiny by the financial conduct authority.

Cf. checklist below.

3.3 Originals, legalization and apostillation (cf. checklist below)

3.3.1 List of all documents which must be submitted in original/legalized versions and whether any documents must be apostilled?

The following documents which must be submitted along with the notification, in the specific case of a financial entity can be provided in legalized versions instead of originals:

  • Minutes of shareholder meetings, approving the preliminary merger agreement, the kind of merger, and the appointment of the legal representatives of the newly combined company.
  • Powers of attorney of the merging companies. 

If the documents come from abroad, they must be apostilled. 

3.3.2 If the merger regime has a mandatory filing deadline, must all the documents identified under Section 3.3.1 be submitted within this deadline?

All the documents must be submitted before the consolidation of the merger.

3.4 Language

3.4.1 Which languages may be used for drafting and filing a notification?

Spanish (official language of Bolivia).

3.4.2 Does translations have to be certified/legalized and apostilled?

Documents required for notarization of the merger agreement must be translated, certified and apostilled.

Statutory timetable

Step Description Time
1

Pre-notification

Pre-notification contact with the authorities is customary. However, there are no specific regulations regarding such contacts.

Not defined.

2

The preparation of a filing for a regulated company will be different depending on the regulatory agency involved.

The procedural stages of a normal notification procedure in the potential merger of financial institutions consist of the following steps:

1. Along with the required documents, and within 30 days from the execution of the preliminary merger agreement, the regulated company must file a brief before the agency, requesting approval of the merger

2. The regulatory agency will review the documents and may reject the documents and communicate this rejection to the requesting company.

3. Within 30 days from the filing of the brief requesting authorization, the regulatory agency will issue an Administrative Resolution, granting or denying the authorization requested. The denial could be based on i) unresolved problems with the documents presented, or ii) opposition of the regulatory agency to the report regarding the viability of the merger.

4. Having the authorization of the regulatory agency, the merging parties can execute the definitive merger agreement, and must file the definitive agreement within 3 days after its execution. 


The filing and approval procedure will vary depending on the regulatory body for regulated companies and may take approximately 40 days to be completed.

  • Step 1 1
  • Step 2 2
  • Not defined
  • 40 days

Checklist

List of the supporting documentation which must as a minimum be submitted along with the notification in the specific case of a financial entity.

Supporting documentation

This content was delivered
and last updated on 25-10-2019 by
Contact Person
Jorge Luis Inchauste, Partner
CONTACT DETAILS:

Guevara & Gutiérrez has provided all input about merger control in Bolivia. 

Guevara & Gutiérrez is one of the leading law firms in Bolivia for M&A and corporate law in general. It is a one-stop firm in Bolivia for all the legal advice required by corporate clients, and its portfolio includes some of the largest and more sophisticated foreign companies doing businesses in Bolivia. It has offices in the cities of La Paz and Santa Cruz, and associates working in other cities of the country. 

For more information about Guevara & Gutiérrezand merger control in Bolivia, please contact our Partner directly.

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