P.R. Laws tit. 7, § 91
(a) A domestic bank may merge or consolidate with one or more of the following entities:
(1) Another domestic bank;
(2) a foreign organized under the laws of the United States of America, or of any state or territory of the United States of America;
(3) a foreign bank organized under the laws of any other country, if as of January 1, 1996, said foreign bank held a license granted under §§ 1 et seq. of this title;
(4) a corporation organized under the laws of Puerto Rico, the United States of America, or of any state or territory of the United States of America, when the Commissioner determines that the latter is engaged in activities which a bank may conduct directly under the provisions of §§ 1 et seq. of this title;
(5) a corporation organized under the laws of any other country, if said corporation is a subsidiary of a foreign bank organized under the laws of any other country, if, as of January 1, 1996, said foreign bank held a license granted under §§ 1 et seq. of this title, when the Commissioner determines that it is engaged in activities which a bank may conduct directly under the provisions of §§ 1 et seq. of this title;
(6) an interim corporation whose creation and purpose is related to the merger or consolidation conducted pursuant to this section, provided said interim corporation is not an institution resulting from the merger or consolidation,
(7) any other corporation which, in the judgment of the Commissioner, is susceptible to a merger or consolidation under the provisions of this section.
(b) The entity resulting from the merger or consolidation shall be a bank organized under §§ 1 et seq. of this title, except that in the case of a merger or consolidation under subsection (a)(2) of this section, the resulting entity may be a bank organized under the laws of the United States of America or of any state of territory of the United States of America, and except that in the case of a merger or consolidation under subsection (a)(3) of this section, the resulting entity shall be a foreign bank organized under the laws of said other country. Once the merger or consolidation transaction has been completed, the resulting entity may maintain and operate branches in Puerto Rico subject to the conditions and requirements established by § 91a of this title.
(c) The merger or consolidation shall be conducted under the conditions and restrictions, and with the powers mentioned below:
(1) Those corporations which intend to merge or consolidate shall execute an agreement for the merger or consolidation of the aforementioned corporations, establishing the terms and conditions thereof, the way it shall be conducted, the name of the new corporate entity (in case a new corporation is organized), or that of the resulting corporation, as the case may be; the number, names and residential addresses of the first directors and officials of the new entity or the resulting entity, who shall discharge their duties until their successors are elected or appointed, be it pursuant to §§ 1 et seq. of this title or according to the bylaws of said corporation; the number of shares which shall constitute the capital of the new corporation or the resulting corporation, specifying the number and par value of the shares of common stock and the number of shares of preferred stock and the par value of each share, if any; the way to convert the capital of each of the merging or consolidating corporations into cash, in stock or obligations of the new corporation, or of the resulting corporation or of affiliated corporations; and, in the case of the creation of a new corporation, the date and form to elect or appoint the directors and officials, and all other provisions and details said directors deem are necessary and convenient to perfect the merger or consolidation, provided they are not in conflict with the provisions of §§ 1 et seq. of this title.
(2) This agreement shall be approved and certified by each of the merging or consolidating corporations pursuant to the laws under which they are organized and, in the case of the banks organized under §§ 1 et seq. of this title, in the following manner:
(A) Each bank shall remit to its stockholders, at their mailing address, a written notice not less than twenty (20) days prior to the date set for the stockholder’s meeting, specifying the place and purpose of the meeting, and in which said agreement of the directors shall be considered and the stockholders of the corporations to be merged or consolidated shall vote, separately, to adopt or reject said agreement; each share of stock shall give the holder thereof the right to one vote to be cast by the stockholder in person, or by his/her proxy.
(B) Should the votes of the stockholders of two-thirds (⅔) of the outstanding shares entitled to vote on the matter at hand, of each of the banks to be merged or consolidated cast in approval of the said agreement, this fact shall be certified by the secretary of each of the respective banks under the seal thereof, and said agreement, thus approved and certified, shall be submitted to the Commissioner.
(d) Should the resulting entity be a bank organized under §§ 1 et seq. of this title, the Commissioner shall approve or disapprove the merger or consolidation agreement within the term of ninety (90) days from the date the latter was filed with the Office of the Commissioner. In making his/her a decision, the Commissioner shall consider the public interest, among other factors.
(e) The Commissioner may deny the permit to carry out a merger or consolidation when, in his/her judgment, he/she believes that it is contrary to the public interest.
(f) Should the Commissioner fail to approve the merger or consolidation, he/she shall notify his/her decision to the petitioning parties by certified mail within the term of ninety (90) days from the date in which the petition to authorize the merger or consolidation agreement was filed with the Office of the Commissioner. Should the Commissioner approve the merger agreement, it shall be filed with the Office of the Secretary of State of Puerto Rico and the latter shall henceforth be considered as the merger or consolidation agreement or certificate of the aforesaid corporate entities. A copy of the said merger or consolidation agreement, duly certified by the Secretary of State under his/her seal, shall constitute proof of the existence of the new corporation or the consolidated corporation. The decision of the Commissioner disapproving a merger or consolidation agreement shall be conclusive and shall not be subject to review, except when said decision is capricious or arbitrary or when the due process of law has been violated.
(g) When the resulting entity is a bank organized under the laws of the United States of America or of any state or territory of the United States of America, or of any other country, said foreign bank shall file with the Office of the Commissioner a copy of the petition submitted to its supervising agency, and it shall comply with all the provisions of this section. Said foreign bank shall also provide satisfactory evidence to the Commissioner that it has complied with the provisions of § 160 of this title.
(h) Once the aforesaid merger or consolidation agreement has been formally executed, perfected and filed with the Office of the Secretary of State, the corporations involved shall be considered as a sole corporate entity under the name provided in the agreement (in case a new corporation is created), or under the name of the consolidated corporation, into which the remaining corporate entities are to be merged or consolidated, as the case may be, and said corporation shall thenceforth enjoy, for the purposes of the laws of Puerto Rico, all the rights, privileges and franchises and shall be subject to all the restrictions, obligations and duties of the corporations thus merged or consolidated, except for the alterations provided in §§ 1 et seq. of this title.
(i) If any bank stockholder who does not vote in favor of said merger or consolidation agreement makes known his/her opposition to said merger or consolidation at the board meeting, or in a term of twenty (20) days therefrom, and demands payment of his/her shares, and if said merger or consolidation takes place, in that case said stockholder, within the term of sixty (60) days after the merger or consolidation may petition the Court of First Instance, San Juan Superior Part, and upon a written ten (10)-day notice to said corporation prior to the filing of said request, to appoint one (1) appraiser to assess and determine the value of his/her shares and the court shall proceed to verify said appointment and designate the date and place where the appraisers shall first meet, and shall give them such instructions as to the procedure to be followed as the court may deem pertinent, specifying the date and manner that the value of said shares shall be paid to said stockholder. The appraisers shall meet on the date and at the place designated, and after taking oath, shall proceed to perform the duties imposed on them by the court, and assess and determine the value of the aforesaid shares, and shall deliver a copy of their report to the corporation and another to the stockholder, should he/she require it. All expenses incurred in determining the value of said shares shall be chargeable to the corporation. When the latter has paid the value of the said shares, as fixed by the appraisers, said shares shall be cancelled and the stockholder shall cease to be a stockholder of the corporation or to have any interest therein, and the corporation may dispose of said shares for its own benefit. In case of emergencies, when the merger or consolidation is necessary for the best protection of the interests of the depositors and the bank, if the merger or consolidation is approved by the votes of the holders of two thirds (2 / 3) of the outstanding voting stock, and after such a merger or consolidation agreement has been submitted for the consideration of the Commissioner, and thereby approved, the stockholders who did not approve the merger shall be in all respects subject to and bound by such a merger or consolidation. The Commissioner shall, certify in these cases, that the merger was made due to an emergency, and that, in his/her judgment, the same will be beneficial to the public interest. If the Commissioner does not approve the merger or consolidation agreement made because of an emergency, he/she shall, within the term of ninety (90) days, serve notice of his/her determination by certified mail on the banks interested in the agreement. The determination of the Commissioner disapproving a merger or consolidation agreement made because of an emergency shall be conclusive and not subject to review.
(j) When a merger or consolidation is made pursuant to the provisions of §§ 1 et seq. of this title, each and all the properties, shares, rights, franchises, powers and privileges of the merged or consolidated corporations shall become the property of the resulting corporation or the newly organized corporation, without the need to execute any instrument or document of conveyance, and the resulting corporation or the newly organized corporation, as the case may be, shall have, with regard to said properties, shares, rights, franchises, powers and privileges, the same rights that the merged or consolidated corporations had. In order for the resulting corporation or the newly organized corporation, as the case may be, to have the properties, shares, rights and franchises it has acquired as a result of said merger or consolidation recorded in its name in the Property Registry or in any public office or registry, it must file with the Property Registry or with any public office or registry, a copy of the merger or consolidation agreement certified by the Secretary of State, under his/her seal, and upon payment of the filing fees set in the law applicable to the case, the registration shall be made.
(k) The obligations of the merged or consolidated corporations and the rights of the creditors of any of said corporations, shall in no case be injured or impaired in any way by such a merger or consolidation, and none of the rights, obligations and claims of any person, creditor, depositary and trustee shall be affected by said merger or consolidation, and the consolidated corporation or the newly organized corporation, as the case may be, shall have all the obligations and be liable for all the debts and responsible for complying with all the contracts and obligations of the merged or consolidated corporations, just as they were prior to such a merger or consolidation, and the stockholders of said corporations so merged and consolidated shall continue to be subject to the same obligations, claims and suits that existed against them when or before the merger or consolidation was made, and all suits, actions and other proceedings then pending before any court, to which any of the merged or consolidated corporations is a party, shall continue to their termination as if no such merger or consolidation had taken place, Provided, however, That the resulting corporation or the newly organized entity, as the case may be, can be substituted in lieu of the corporations which have merged or consolidated, by order of the court cognizant of the proceedings.
History —May 12, 1933, No. 55, p. 322, § 15; May 12, 1936, No. 74, p. 374, § 5; May 15, 1938, No. 199, p. 387, § 2; Sept. 7, 1961, No. 12, p. 353, § 1; Aug. 28, 1997, No. 108, § 15.