A European industrial group identified an Argentine target as the missing piece of its Latin American supply chain. The price was agreed. The business logic was sound. Then the regulatory calendar arrived – and the timeline the acquirer had presented to its board began to look optimistic.
M&A transactions in Argentina require competition clearance from the Comisión Nacional de Defensa de la Competencia (National Competition Commission) when combined turnover thresholds under Argentine competition legislation are met. The review process typically runs between three and six months from a complete filing. Closing conditions in the share purchase agreement must be structured around this timeline to avoid triggering penalties or closing without required approval.
This case study examines how the transaction was structured, the complications encountered, and three lessons that transfer directly to comparable cross-border acquisitions in Argentina.
Client profile and the challenge they faced
The client was a mid-size European manufacturer seeking to acquire a controlling stake in an Argentine distributor. The target operated in a sector sensitive to foreign investment review. Its revenue crossed the notification threshold under Argentine competition legislation. That meant mandatory pre-closing clearance – not a post-closing filing.
The acquirer's in-house team had prior M&A experience in Western Europe and the United States. Argentina presented a different set of conditions. Foreign exchange rules affected how the purchase price would be paid and repatriated. Regulatory timelines were not fixed by statute in the way they are in EU jurisdictions. And the Registro Público de Comercio (Public Commercial Registry) requirements for the target entity imposed additional documentary steps that the acquirer had not budgeted for.
The core challenge was threefold: completing rigorous due diligence in a compressed window. Drafting a share purchase agreement (SPA) that addressed Argentine-specific closing conditions. Additionally, managing a regulatory process whose duration was difficult to predict with precision.
Engaging a lawyer in Argentina with cross-border M&A experience early in the process proved critical. For context on how similar structural questions arise in other civil law markets, the team also drew on our prior work described in the M&A transaction case study for the United States.
Legal strategy: structure, sequencing, and the SPA
The strategy centred on three decisions made before the SPA was signed.
First, the team recommended a pre-signing due diligence phase of six to eight weeks. Argentine corporate legislation requires that certain corporate approvals – including those affecting share transfers in sociedades anónimas (joint stock companies) – be reflected in board minutes and shareholder resolutions. The due diligence process surfaced a pending regulatory authorisation held by the target that would require regulatory novation upon change of control. Identifying this early allowed the parties to add it as a specific closing condition in the SPA rather than discovering it post-signing.
Second, the SPA was drafted with Argentine law as the governing law for the target-side obligations, while the acquirer's representations and warranties were governed by the law of its home jurisdiction. This bifurcated structure is not unusual in cross-border acquisitions involving Argentine targets. It allows each party to make representations and warranties that are legally meaningful in their own system. Argentine courts have generally accepted such hybrid structures where the choice of law is clearly expressed.
Third, the competition clearance filing was submitted on the same day as signing. Argentine competition legislation permits – and in transactions above threshold requires – notification before closing. Filing at signing, rather than waiting, allowed the review period to run concurrently with the satisfaction of other closing conditions.
For a broader view of how our M&A practice operates in Argentine and Iberian markets, see our M&A services page for Argentina.
Key milestones and complications encountered
The transaction moved through four main phases after signing.
During the first four weeks, the competition authority issued a request for additional information. This is common in transactions involving parties with overlapping product categories. The request extended the review clock. The SPA had been drafted with a long-stop date that anticipated this possibility. The parties did not need to amend the agreement.
In parallel, the target's board was required to pass resolutions approving the share transfer. Under Argentine corporate legislation, certain procedural formalities – including the registration of the transfer with the Public Commercial Registry – must be completed before the acquirer can exercise full shareholder rights. The team had built a pre-closing registry checklist into the transaction plan. This prevented a delay that frequently catches acquirers unfamiliar with the Argentine corporate system.
The most significant complication arose from the foreign exchange conditions in place at the time of closing. Argentine investment legislation and central bank regulations imposed restrictions on the outward transfer of funds. The purchase price mechanism in the SPA had to be adjusted through an amendment agreed by both parties. The amendment addressed the timing of payment tranches and introduced an escrow arrangement held outside Argentina. This protected the seller's economic interest while giving the acquirer a mechanism that complied with applicable currency controls.
Competition clearance was obtained approximately five months after the initial filing. The transaction closed within ten days of the authority's decision.
Transferable lessons for cross-border M&A in Argentina
Three lessons from this matter apply directly to comparable transactions.
Build regulatory time into the SPA from day one. The long-stop date must reflect the realistic duration of competition review, not the acquirer's preferred closing timeline. A long-stop set too early creates pressure to close before clearance is obtained – which Argentine competition legislation prohibits and which carries material penalties. Practitioners in Argentina consistently advise that a long-stop of at least eight months from signing is prudent in notifiable transactions.
Due diligence must cover regulatory authorisations held by the target. Licences, sector-specific permits, and concessions granted to the target may not transfer automatically upon a change of control under Argentine administrative and corporate legislation. Identifying these early allows them to be addressed as closing conditions rather than post-closing surprises. The cost of correcting this after closing – in time, fees, and commercial disruption – is substantially higher than addressing it in the SPA.
Currency and payment mechanics require early-stage legal input. Argentine foreign exchange rules have changed frequently. A purchase price structure that was workable at the term sheet stage may require revision by signing and further adjustment before closing. The SPA should include a price adjustment or payment mechanism clause that is explicitly designed to accommodate regulatory changes in Argentine investment legislation. Leaving this to a side letter or post-closing agreement introduces enforcement risk that is difficult to manage once the transaction has closed.
Companies evaluating acquisitions in Argentina should also review how corporate governance requirements under Argentine corporate legislation interact with the acquirer's home-country obligations. Our corporate law services page for Argentina provides further detail on these requirements.
To discuss how this approach applies to your acquisition in Argentina, contact us at info@ferrazwhitmore.com.
About Ferraz & Whitmore
Ferraz & Whitmore is an international law firm based in Lisbon, advising business clients across 46 jurisdictions. Our Americas practice supports cross-border M&A transactions in Argentina and across Latin American markets, combining civil law expertise with English common law tradition to structure transactions that work across multiple legal systems. Our attorneys have advised on share purchase agreement drafting, due diligence, closing conditions management, and competition clearance processes in Argentine and Iberian markets. The firm's Lisbon base provides direct access to Portuguese and EU regulatory systems, while our common law expertise supports enforcement and arbitration strategies in English-speaking jurisdictions. Ferraz & Whitmore participates in cross-border practice groups focused on Latin American M&A and commercial transactions. To explore legal options for your M&A transaction in Argentina, schedule a consultation at info@ferrazwhitmore.com.
Disclaimer: This publication is provided for informational purposes only and does not constitute legal advice. The information herein should not be relied upon as a substitute for professional legal counsel tailored to your specific circumstances. Ferraz & Whitmore assumes no liability for actions taken or not taken based on the contents of this material. For advice regarding your particular situation, please contact info@ferrazwhitmore.com.