Suspended Mergers and Acquisitions

Because the Constitutional Chamber in Costa Rica admitted an action challenging the articles regulating mergers and acquisitions, the file approval processes have been temporarily suspended.

Thursday, April 4, 2019

Authorities informed that since last March 19, the Commission to Promote Competition (Coprocom) refrains from approving or failing processes of companies that seek to acquire others or merge in the country.

Rodolfo Chevez, president of Coprocom, confirmed to Elfinancierocr.com that "... upon learning of the opening of this process, they decided to refrain from issuing criteria on any pending case, since they are not clear if by doing so they are in contempt of the law. We have disagreements as to interpretation. (...) what the Fourth Chamber is pointing out to us. We hope to have tomorrow (April 4) a conclusion on the matter, not that we cease to session only that we could not decide on concentrations.

The article states that the unconstitutional action, in file 18-019669-007-CO filed on December 6, 2018 by a citizen with surname Zeledón, challenges "... articles 12 subsection f, 16, 16 bis, 16 ter and 27 subsections h and i of the Law for the Promotion of Competition and Effective Defense of Consumers 7274. These articles refer to the procedures followed by Coprocom when making decisions on mergers and acquisitions in the country."

Without giving details of the companies involved, Coprocom authorities said they currently have two pending merger requests, which would be at risk as they are about to expire.

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Millionaire Fine to Pharmacy Chain

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Seven years after Cofasa filed a monopoly complaint against Fischel, in Costa Rica the Commission for the Promotion of Competition decided to impose a fine of almost $19 million on the pharmacy chain.

Representatives of the Commission for the Promotion of Competition (Coprocom), informed that the fine imposed on Fischel is provisional, since the resolution is in the appeals phase, so it is not final and cannot be released figures or other aspects of the ruling.

Acquisition of Supermarket Chain is Claimed

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In response to the brake placed by the Commission for the Promotion of Competition on the purchase of Gessa by Walmart, in Costa Rica both companies presented two independent appeals that seek to revoke the blockade of the transaction.

Last week, the Commission for the Promotion of Competition (Coprocom) denied Walmart the purchase request of the supermarket group Gessa, and just days later, on December 10th, the two companies participating in the transaction filed two appeals to overturn the judgment.

Supermarket Chain Purchase Stopped

December 2018

Arguing that there are risks that the economic agent will affect market prices, in Costa Rica the Commission for the Promotion of Competition denied Walmart the request to purchase the supermarket group Gessa.

Representatives of the Commission for the Promotion of Competition (Coprocom) informed that the decision was taken unanimously on December 4th and the parties were notified the following day.

Mergers and Monopolies in Costa Rica

September 2011

In order to avoid paying penalties after a merger it is possible to obtain endorsement of the operation from the Commission to Promote Competition (COPROCOM).

A statement from the COPROCOM reads:

In Costa Rica, unlike most countries with greater developments in Competition Law, control of concentrations is provided for after the event, ie, once the transaction has occurred.

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