IFLR 1000
The Guide to the World's Leading Financial Law Firms

Mexico's economy began picking up in the latter half of 2010, following a GDP drop of 6.5% in 2009. Attorneys offer mixed opinions on the situation. One believes the country is "recuperating well", but another remarks: "The economy still hasn't recovered – a lot of companies are failing". Mexico's economy is deeply tied to the US, on which it depends for 80% of its exports.

Nevertheless the country's M&A market appears to have survived unscathed over the past year and is booming: "Our strong financial system protected the M&A market, allowing companies to grow in a certain way," says one partner. Another practitioner remarks, "M&A has been very active with a variety of deals – the typical consortium, multi-national megadeals, along with strategic Mexican-specific deals."

The biggest transactions include telecom giant América Movil's bid for Telmex and Carso Communications, valued at $29.6 billion in total, and Heineken's $8.1 billion bid for Mexico's largest brewery, Femsa. Active sectors include aviation, mining, pharmaceutical, and auto parts, with real estate just beginning to pick up.

Shutdowns in US and Canadian automotive manufacturing plants bolstered the Mexican auto industry's powerful manufacturing base. GM, Ford and Chrysler all have manufacturing plants in the country and Japanese and German companies are also getting in on the act.

Firms report that real estate M&A activity continues to be slow. "Private funds companies like Prudential buying industrial parks, commercial centres, malls - that activity has stopped or slowed down considerably because the financing wasn't available for those transactions," says one partner. "Now it's starting to flow and is moving cautiously." Investment in tourism and real estate development on the coast is picking up, which has led to more M&A activity related to hotels and resorts.

Although the oil and gas industry is still heavily regulated, some rules are in the process of being relaxed. One of the biggest developments over the past year was legislative reform allowing Mexico's state-owned oil and natural gas company, Pemex, (Petroleos Mexicanos), to enter into contracts with foreign companies. After opposing lawmakers challenged the reform, it was upheld by the Supreme Court in January 2011 and the first round of bids, for three oil fields, went out in March 2011.

In May 2011, President Felipe Calderón signed off on reforms to Mexico's Law on Economic Competition, giving the country's Federal Competition Commission (CFC) more power to impose sanctions against companies that partake in monopolistic practices. "This is a positive change," remarks one Mexican attorney. "We've been working for several years on this. Now it's finally law."

Creel García-Cuéllar Aiza y Enríquez reports an impressive volume of complex M&A transactions over the past year. One client refers to the firm's lawyers as "responsive, informed and experienced".

In a competitive unsolicited bid offer made by Interjet, valued at $320 million, a team of lawyers led by partner Jean Michel Enríquez advised a group of airlines on the proposed purchase of 50% of shares in Volaris, Mexico's third largest airline. The shares were previously held by Spanish media giant Televisa and Sinca Inbursa, which is part of Carlos Slim's Grupo Financiero Inbursa.

The deal involved challenges such as creating a structure to accommodate each of the purchasers' investments while complying with Mexican law, which forbids foreign investors from owning more than 25% of voting stock in a passenger airline. The deal closed after just 90 days, in June 2010.

In a deal announced in December 2010, involving a loan portfolio of $2 billion, partners Eduardo Gonzalez and Esteban Valadez advised GE Capital on the acquisition of its Mexican mortgage operations by Santander.

Galicia Abogados retains the respect of its peers, with an attorney from a competing firm saying it would be his choice referral if conflicted out of a deal. The firm represents the range of players in M&A transactions, specialising in private equity clients. It has particular expertise in divestitures, strategic alliances and joint ventures, majority/minority investments and restructurings. Jose Manuel Gonzalez of White & Case joined the firm as counsel in February 2011. A client notes that attorneys at the firm "are always available, and able to meet tight deadlines".

In a deal that closed in May 2010, the firm represented a Dutch interest in Mexico's optical industry. The firm advised the owners of Grupo Óptica Lux On HAL Investments' acquisition of 25% of its shares. The transaction also gave HAL, a private equity company, the option to buy an additional 70% of the company's outstanding stock.

In a $2.5 billion stock transaction that closed one year later, partner Humberto Pérez Rocha represented the beverage company, Grupo Continental in its merger with Embotelladoras Arca, Mexico's second largest Coca Cola bottler. The new company, Arca Continental, will trade on the Bolsa, Mexico's stock exchange.

Mijares Angoitia Cortés y Fuentes began as a corporate, M&A, banking, securities and finance practice. The firm has since branched out into areas including private equity, structured finance, project finance and energy. The firm is commended by clients for its "very professional" lawyers. "They're available 24-hours a day, and are expensive, but you get what you pay for," says one patron.

In a deal which closed in March 2011, partner Ricardo Maldonado represented Mexican retailer Grupo Axo in its joint venture with US cosmetic giant Sephora's affiliate, LVMH. Grupo Axo will set up Sephora shops throughout Mexico, beginning with two in 2011 and one each year thereafter. It will also create a website for online purchases.

In another deal, which represents Singapore's first venture in the region, Mijares advised Singapore's state-owned investment company, Temasek Holdings, in the creation of a joint venture with Grupo Desarrollador Internacional. The scheme will invest $200 million in land and real estate throughout Mexico.

White & Case, which opened its Mexico City office in 1991, distinguishes itself from most of the country's firms by its New York roots, and sheer size - its M&A team practices in 25 countries around the world. The firm has over 50 lawyers in its offices in Mexico City and Monterrey.

In March 2011, the firm increased its M&A capabilities with the addition of partner Jorge de la Garza to its Monterrey office from Thompson & Knight. De la Garza brings his longstanding relationships with the Monterrey business community to his domestic and cross-border M&A work.

In January 2011, the firm acted for Mexican chemical producer Mexichem in its $300 million acquisition of the AlphaGary plastic compounding business division of the US-based Rockwood Holdings. AlphaGary manufactures specialty plastic compounds that are used for wires and cables, as well as medical uses. The acquisition will facilitate Mexichem's diversification and its use of new technologies in its Latin American markets.

2011 has been a turbulent year so far for Jáuregui y Navarrete. Formerly Jáuregui Navarrete y Nader, the firm adopted its new name in June 2011, when partner Michell Nader Schekaiban and nine other partners left to start their own firm, Nader Hayaux & Goebel. Amongst the departures were lead partners Yves Hayaux-du-Tilly and Hans Goebel. The market will wait to see what impact the departures might have.

Despite the turmoil, the team can point to an impressive list of deals, with one clear highlight being the advice given to Mexico City-based conglomerate Grupo Salinas in its $1.6 billion joint venture with the multimedia conglomerate Grupo Televisa. The merger paved the way for Grupo Televisa, the second-largest mass media company in Latin America, to make multi-million dollar investments in Iusacell, Mexico's third largest mobile provider. The transaction closed in April 2011 and was led by former partner Michell Nader, alongside Mauricio Martinez, Gunter Schwandt and Inigo de Velasco.

In another key deal, which took three years of negotiations and closed in November 2010, Miguel Jáuregui and Gabriel Navarrete represented the Virginia-based security and protection company Brink's on its acquisition of an additional 78% of capital stock of Serpaprosa Servicio Panamericano de Protección (Serpaprosa), giving Brink's control of over 99% of the company's stock. Serpaorprosa has more than 12,000 employees, 80 branches and over 1500 armoured units, providing services for 40% of the Mexican cash and securities transportation market.

One long-term client praises the work of Miguel Jáuregui, saying, "He always provides a creative strategy based on his impressive experience. His work is efficient with a depth of knowledge leading to positive conclusions for what seemed like irresolvable issues."

Founded in 1990 in Mexico City, Kuri Brena Sánchez Ugarte y Aznar has implemented some of the largest privatisations of Mexican industrial and financial companies in the country's history. One client describes the firm's attorneys as, "creative, business-driven and fast".

In one 2010 deal, partners Daniel Kuri Breña and Jesus Sánchez Ugarte advised Grupo Financiero Banorte on its $1.3 billion merger with Grupo Financiero IXE. The merger resulted in the creation of the largest Mexican-investor-controlled bank, and the third largest Mexican bank. The new entity is maintaining two separate networks with a combined 1263 offices.

And in an ongoing deal that began in 2010, partner Guillermo Garay Espinosa advised CVI Globla Lux Oil and Gas on its acquisition of 20% of the capital stock of Oceanografía, which provides marine engineering services. Mexico's state-owned oil and natural gas company, Pemex, is Oceanografía's main client.

Ritch Mueller has an impressive M&A practice that for the past year has had a prominent role in the airport, hotel, pharmaceutical, and finance industries, as well as others. The firm has a focus on private equity.

In March 2011, partner James Ritch retired. Ritch is the grandson of James E Ritch Jr who founded the firm in 1975. His departure was followed one month later by that of partner Ricardo Gomez Palacio.

Clients are pleased with the firm's work: "Strategically very good; always very savvy in terms of what position to take in negotiating," says one, "everything they've done has been very solid." Another client, who works with Carlos Obregón, called him "exemplary" and listed his positive qualities: "He's smart; he knows the Mexican markets very well; his Spanish is perfect; his English is perfect; he's savvy with documents."

In a $250 million deal, Partner Luis Nicolau represented two private sellers in the sale of their controlling stock interest in Servicios Logísticos Farmacéuticos, and its subsidiaries. The controlling company, Farmacias del Ahorro, is one of the leading pharmacy chains in Mexico, with 350 stores throughout the country. The transaction closed in March 2010.

In a deal which closed in May 2011, a team led by Carlos Obregón Raja represented Nexxus Capital in its acquisition of Krispy Kreme Mexico and another fast food business, Arrachera House. The deal was complicated by the franchise renegotiations related to Krispy Kreme.

Santamarina y Steta is one of Mexico's few full-service firms, and one of the country's oldest and most prominent. The firm was founded in 1947 by Agustín Santamarina, a highly respected figure: "To a large part he is the creator of the Mexican corporate firm. He is very well recognised in Mexico and internationally," says one peer.

A client notes receiving "the highest quality advice, coupled with good judgement and integrity", while another adds: "They understand the needs of our clients, know our business and try to be practical in their advice."

In a complex $115 million financing transaction that closed in July 2010, the firm represented AM Resorts in negotiations related to the acquisition of hotel projects in Puerto Vallarta, Nuevo Vallarta and Huatulco.

In a $1.9 billion global transaction, Jorge León Orantes and José Ramón Ayala advised Colombia's Grupo Aval on its acquisition of the GE-controlled BAC Credimatico, the owner of the largest credit card network in Central America. The firm's role included obtaining approval from the Federal Competition Commission under tight deadlines and commenting on drafts of the stock purchase agreement. The transaction closed in 2010 and was part of GE's plan to reduce its investments following the 2008 crisis.

On June 2011, Michell Nader Schekaiban and nine other partners from Jáurequi Navarrete y Nader, now Jáurequi y Navarrete, announced that they had left the firm to create Nader Hayaux & Goebel. Sixteen associates joined them.

The new firm, formed by a group which has been working together for more than 20 years, reports a positive response from its clients. The firm will continue to focus on M&A, banking & finance, securities, structured finance, insurance, real estate and infrastructure.

For the past twelve months Jorge Ruiz has been coordinating the firm's M&A and corporate department and under his watch the team has made been steady progress, despite the difficult market, and picked up mandates across all the sectors of the economy.

A number of the firm's deals remain confidential but two closed M&A transactions and an ongoing mandate give an insight into the kind of matters handled, although it only represents a small proportion of the transactions closed.

Baker & McKenzie advised Richardson Electronics / Project Radar on its worldwide acquisition its RF, Wireless & Power Division for $210 million, which closed in October 2010 across 20 jurisdictions. Jose Miguel Zozayacorrea, one of the office's most active partners, led a large team to conduct due diligence on the Mexican subsidiary and revise the purchase agreement.

Gaspar Gutierrez Centeno led a team to act for HAL Investment on its acquisition of 25% of Grupo Optico Lux for $23 million in May 2010. The transaction shows the office's ability to handle deals involving Mexican parties.

In one ongoing and very high value M&A in mid-2011 Andres Ochoa-Bünsow and a large team were busy conducting due diligence for a confidential prospective purchaser of an investment in a regional retail and wholesale public company for an estimated value of $600 million.

Forasteri Abogados' M&A department hired three associates between May and October 2010 from rival firms Romo Paillés and López Velarde.

Associate Verónica Peña in particular seemed to pay dividends, appearing in a supporting role on the firm's big deals. However it was partners Leonora Olmedo and Francisco Pérez who brought in the lucrative deals.

The firm closed three interesting M&A deals in 2010. Olmedo led a team to support Harmon Hall Holdings and Nexxus Capital as the founding shareholders of Harmon Hall Holding sold their stake in the company to a number of international private equity funds, thereby putting Harmon Hall in a capital rich position allowing it to expand. The deals were closed in August 2010 for an undisclosed amount.

Olmedo was busy again in November 2010 as she steered another project to close, this time representing Genomma Lab as it acquired the rights to the brands Vanart and Pomada de la Campana. The acquisitions were part of a string of purchases of personal care products by the company subsequent to a successful IPO in 2008.

Pérez closed a third notable deal for the team in December. He and Peña advised Grupo Hotelero Brisas on its acquisition of a residential development and resort in the tourist hotspot of Cancún from several sellers. The deal is evidence of the continuing opportunities in Mexico's tourism sector.

M&A was slightly slower last year compared to banking and financing for Goodrich Riquelme y Asociados, however the firm did close two notable deals in early 2011, which gave it a good boost.

Riding a current trend in Mexico, senior partner Ricardo Lan led a team including junior partner Carlos Moran to advise a global car parts manufacturer on the acquisition of a Mexican foundry. The transaction itself was very complex, covering many areas of law from the acquisition agreement into litigation, labour law, environmental law and competition law. It was signed in April 2011 for $40 million.

An even higher value deal and probably the firm's best M&A mandate, saw a team including Jorge Sánchez, Edgar Martínez Herrasti and José Antonio Butrón Quintero, among others, advise Nyrstar on its acquisition of a TSX listed company and one of the leading zinc and iron-ore concentrates producers in the world. The firm worked alongside Canadian firm Fraser Milner Casgrain and closed the deal for $200 million in January 2011.