Ecuador

In Ecuador, the main structures available for M&A transactions under local law include share purchases, asset purchases, mergers and amalgamations, each with distinct legal and regulatory implications.

A share purchase is the most common structure, involving the transfer of shares from existing shareholders to the acquirer. In most cases, acquiring shares does not require prior clearance from the Ecuadorian government, except for antitrust approval when the transaction results in market concentration, and in the oil and gas sector, which requires prior approval from the Ministry. The transfer must be recorded in the company’s shareholder registry and disclosed to the Superintendence of Companies, Securities and Insurance (SCVS). Share purchases are generally simpler to execute, as the corporate entity remains intact and contracts, licenses, and obligations continue without interruption.

An asset purchase involves the transfer of specific assets or business units rather than ownership of the company itself. This structure allows the acquirer to select which assets and liabilities to assume, but it requires individual transfer procedures for contracts, permits, and licenses. Asset purchases are less common and usually occur in special circumstances, such as when the local company operates multiple businesses under the same corporate structure or when there are labor or tax contingencies that make a direct share acquisition less attractive. Asset purchases require the individual transfer of contracts, permits, and licenses, which can be more complex and time consuming compared to share acquisitions.

Mergers and amalgamations are other available structures regulated by the Companies Law. Mergers and amalgamations require prior approval and registration with the SCVS, including submission of merger or amalgamation agreements, shareholder resolutions, and updated bylaws. These processes are more complicated and time consuming.

The M&A market in Ecuador can be characterized as moderate in overall volume but strategically significant, with activity concentrated in sectors such as mining, oil and gas, energy, agribusiness, and telecommunications. Deal sizes tend to be mid-range compared to regional standards.

M&A activity is particularly strong in mining, oil and gas, and energy, where both local and foreign investors are pursuing share acquisitions and contractual arrangements with government entities. Beyond extractives, agribusiness and telecommunications are emerging as attractive areas, with potential acquisitions aimed at meeting domestic demand, export opportunities, and digital connectivity expansion. A notable example is the USD 380 million sale of Telefónica’s Movistar Ecuador to Millicom.

In our opinion, the market can be divided into three main categories of transactions. First, global structures, where a multinational company acquires another multinational with existing operations in Ecuador; for example, Newmont’s acquisition of Newcrest. Second, foreign acquisitions with Ecuadorian focus, where a multinational acquires a foreign company whose principal business is located in Ecuador, such as CMOC’s acquisition of Lumina. Third, local or direct acquisitions, where a multinational or domestic company acquires an ongoing business operating in Ecuador; for example, Grupo Uno’s acquisition of Primax.

Overall, while the number of transactions is moderate, the deals are strategically important, often involving high-value assets in regulated sectors.

In the past 12–24 months, one of the defining trends in Ecuador’s M&A market has been the active participation of foreign companies acquiring local businesses, particularly in strategic sectors such as mining, oil and gas, and telecommunications. These transactions often reflect global consolidation strategies, where multinational groups strengthen their presence in Ecuador through direct acquisitions or by purchasing foreign companies whose principal operations are based in the country.

Another notable development has been the role of Chinese companies acquiring Western companies in the natural resources sector, which indirectly impacts Ecuador when the acquired entity’s projects are located here. These Chinese companies seek long-term access to natural resources. In addition, Chinese participation has extended beyond acquisitions to infrastructure financing, particularly in energy and mining projects, where investment is often tied to the development of roads, power facilities, and other supporting infrastructure essential for resource extraction and production.

p>Over the next 12–24 months, the M&A market in Ecuador is expected to remain active across several strategic sectors. In the mining industry, share acquisitions are anticipated to continue, driven by investor interest in expanding exploration and production capacity. At the same time, new contracts with government entities are likely to shape transactions in oil production, mining production, and electricity generation, reflecting the state’s central role in these industries and the need for private capital to support infrastructure and resource development.

Beyond extractive and energy sectors, potential acquisitions in the agro-industry are expected, as investors seek opportunities in agribusiness and food production to meet both domestic demand and export potential. Telecommunications also stand out as a sector where consolidation and foreign investment may play a role, given the importance of connectivity and digital infrastructure in Ecuador’s economic growth.

Deal structures are likely to combine traditional share acquisitions with contractual arrangements involving government participation, while regulatory oversight will remain a defining factor in sectors which are considered strategic.

In Ecuador, mergers and acquisitions are governed by a combination of corporate, securities, competition, and tax regulations.

The principal legal framework is set out in the Companies Law, which regulates corporate structures, mergers, and reorganizations. In addition, the Securities Market Law (inserted in the Código Orgánico Monetario y Financiero) applies when transactions involve publicly traded companies, ensuring compliance with disclosure and investor protection standards. The SCVS is the regulatory authority supervising corporate compliance, registration of mergers, and disclosure of shareholder information. Disclosure of the ultimate beneficial owner is mandatory, ensuring transparency in corporate control.

Competition aspects are overseen by the Superintendence for Economic Competition (SCE) as competent authority, which reviews transactions that may affect market concentration or competition, regulated by the Market Power Control Law. Transactions that may raise competition concerns must be notified to the SCE for review and clearance before completion.

Tax obligations, including capital gains tax, are monitored by the Internal Revenue Service (SRI).

The Ministry of Environment and Energy also plays a supervisory role in mergers and acquisitions within the oil and gas and mining sectors. In the mining industry, M&A transactions must be notified to the Ministry. By contrast, M&A transactions in the oil and gas sector are subject to prior approval by the Ministry, and failure to obtain prior approval results in the unilateral termination of the contract for exploration and production and the loss of rights over the project. In the case of oil and gas, approval is further conditioned upon the payment of a fee.

In Ecuador, the most common forms of consideration in corporate and M&A transactions include cash and shares. Cash payments are the most frequently used, as the country operates under the U.S. dollar, which usually eliminates currency conversion risks and provides stability for investors. Share-based consideration is also permitted, often used in transactions involving corporate restructuring or cross-border investments.

Separately, in the mining sector, royalties are frequently used as a form of consideration. These arrangements provide a mechanism for ongoing compensation linked to production, complementing traditional cash or equity structures.

In Ecuador there are no restrictions on non-cash consideration; however, transactions must comply with disclosure and transparency requirements. Ecuadorian law obliges parties to identify and report the ultimate beneficial owner and final shareholder to the SCVS, the SCE (when applicable), and the SRI.

The scope of due diligence typically covers corporate and organizational matters, financial and tax, labor, social security, and litigations. From a legal perspective, the review focuses on the ownership and title of shares and key assets, the validity and enforceability of material contracts, and the status of operating licenses and governmental permits.

For projects involved in the natural resources sector or regulated activities, due diligence commonly also includes environmental, social, and governance (ESG) aspects, such as environmental permits, regulatory compliance, and issues related to the project’s social license to operate.

Access to information during the due diligence process is generally limited to publicly available information and the information disclosed by the seller. Such access is subject to confidentiality obligations, data protection regulations, and intellectual property restrictions, which are typically addressed through confidentiality or non-disclosure agreements among the parties.

Warranty and indemnity insurance policies are, to our knowledge and experience, non-existent in Ecuador. We understand that these policies constitute a well-established transactional risk product used internationally in M&A; however, insurance companies in Ecuador do not offer these kinds of instruments. However, such instruments could potentially be accessed through global brokers using a local company as a fronting business, or directly through international insurance companies on behalf of Ecuadorian parties.

Hopefully, in the future, Ecuadorian transactional practice could include these instruments as an effective way of mitigating and diversifying risks, but for this purpose, local regulations should be amended to allow this type of insurance.

Apart from antitrust and competition law requirements, the only restrictions applicable to purchasers (whether foreign or national) exist in what we call the strategic sectors of the economy. Our Constitution defines the following as strategic sectors: energy in all of its forms; telecommunications; non-renewable resources; transportation and refining of hydrocarbons; biodiversity; the genetic patrimony of the state; the radioelectric spectrum; water; and others determined in the law.

Since our Constitution establishes that the state reserves for itself the exploitation of the strategic sectors and that these can only be delegated to private companies by exception, many secondary laws contain specific procedures and restrictions for buyers (whether foreign or local) acquiring domestic business assets in these sectors.

There is a debate as to when the exceptional circumstances allow for a business in a strategic sector to be delegated to the private sector. Secondary laws establish different parameters, but in the main the standard is that the state has priority. However, if the state does not provide the economic and technical resources, then the delegation is possible.

In these circumstances, the prior qualification of the technical and economic capacities of the potential buyer must be demonstrated.

Other than restrictions and disclosure requirements contained in antitrust and competition law, and specific requirements in the case of investments in strategic sectors, legislation in Ecuador does not contemplate any major disclosure or announcement requirements except for listed companies or public tender offers.

Public takeovers in Ecuador are mainly governed by the Securities Market Law.

A “Public Tender Offer” (Oferta Pública de Adquisición or OPA) is a regulated mechanism through which an acquirer offers to purchase shares from all shareholders of a company whose securities are publicly traded. Ecuador’s stock market is still incipient and very limited and OPAs are very uncommon in our market. Only around 50–60 Ecuadorian companies are listed on the Ecuadorian stock exchange so OPAs are very unusual.

Despite this reality, Ecuador does contain a basic framework that regulates the basic elements and requirements for Public Tender Offers, announcement requirements, notification to authorities and other standard procedural matters of similar nature, basically with the objective of protecting minority shareholders through appraisal rights and ensuring transparency when a control acquisition occurs.

In transactions between private companies (no Ecuadorian state-owned companies involved), arbitration is largely the preferred dispute resolution mechanism. Because of historic and inherent difficulties and complexities of the public justice system, arbitration has for many years been the preferred forum for dispute resolution matters. Ecuador has a modern Arbitration Law and at least three to four arbitration centers with a reputable list of local arbitrators.

Usually, in the case of contracts to be executed in Ecuador, Ecuador laws are always preferred.

However, in the case of cross-border international transactions in which an Ecuadorian branch or subsidiary of the seller is involved, international arbitration forums will always be preferred, as well as the governing laws of the seat of arbitration, depending on the origin of the parties.

Emerging technologies — particularly artificial intelligence, fintech, and digital infrastructure — are beginning to play a more visible role in Ecuador’s M&A landscape, although they are still at an early stage compared to larger regional markets.

In the fintech space, regulatory developments led by the Superintendence of Banks and the SCVS have created a more structured environment for digital payment platforms, electronic money issuers, and crowdfunding operators. As a result, we are observing increased strategic interest from traditional financial institutions seeking to acquire or partner with technology-driven platforms in order to accelerate digital transformation. Transactions in this space are often structured as minority investments with governance rights, call options, or staged acquisitions, rather than full buyouts, reflecting both regulatory uncertainty and valuation sensitivity.

Artificial intelligence is not yet a standalone M&A driver, but it is influencing due diligence and valuation discussions. Buyers are increasingly focused on data ownership, cybersecurity compliance, personal data protection (under Ecuador’s Organic Law on Data Protection), and the scalability of digital infrastructure. In sectors such as telecommunications, logistics, agribusiness, and mining, technology integration — automation, predictive analytics, and remote operations — is becoming a value-enhancing factor in acquisitions.

At the same time, emerging technologies present challenges. Regulatory frameworks are still evolving, particularly in fintech and data governance. This creates uncertainty regarding licensing, compliance obligations, and potential future supervision. In addition, many local technology companies operate with lean corporate structures and informal governance practices, requiring careful legal and tax regularization as part of transaction structuring.

Overall, while Ecuador is not yet a regional technology M&A hub, digital transformation is clearly influencing transaction strategy, risk allocation, and post-closing integration.

Yes. In addition to transaction structure and sector-specific regulation, several corporate and regulatory factors are particularly relevant in Ecuador:

• Antitrust clearance. Transactions that meet economic concentration thresholds require prior authorization from the SCE. Timing and risk allocation related to merger control are therefore central to transaction planning.
• Foreign investment considerations. Ecuador does not generally restrict foreign ownership; however, certain regulated sectors — such as hydrocarbons, mining, telecommunications, and financial services — require governmental approvals, notifications, or contractual amendments when control changes occur.
• Change-of-control clauses. In regulated industries and in government-related contracts, change-of-control provisions are common and may trigger consent requirements. This is especially relevant in extractive industries and public-private contractual arrangements.
• Labor and tax contingencies. Ecuadorian labor law is protective of employees, and liabilities can transfer in both share and asset transactions under certain circumstances. Thorough labor due diligence is therefore essential. Similarly, tax exposures — including historical VAT, income tax, and transfer pricing matters — are frequently addressed through escrow arrangements or indemnity structures.
• Corporate governance and minority protections. Local companies often have concentrated ownership structures. Shareholders’ agreements, tag-along and drag-along rights, and dispute resolution mechanisms (frequently international arbitration) are key structuring considerations, particularly in joint ventures and private equity investments.
• Political and macroeconomic context. Although dollarization provides monetary stability, regulatory changes and sector-specific reforms may affect long-term projections. As a result, investors typically emphasize stabilization clauses, international arbitration protections under bilateral investment treaties, and robust representations and warranties.

In summary, M&A transactions in Ecuador require careful integration of corporate, regulatory, antitrust, labor, and contractual analysis. While the market remains moderate in volume, the strategic nature of the sectors involved, and the evolving regulatory environment, demand sophisticated structuring and thorough due diligence.