Meyerlustenberger Lachenal

Zurich

Meyerlustenberger Lachenal Ltd. (MLL) is one of the most reputable international law firms in Switzerland. The firm’s experienced and dynamic lawyers form a strong team of specialists that stand for innovative and solution-focused services. With offices in Zurich, Geneva, Zug, Lausanne and Brussels MLL is present in the key Swiss economic centres and in the heart of Europe. The firm has a China Desk, a Latin America Desk and a Turkey Desk that serve as a gateway to and from these regions.

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Updates

Corporate Finance/M&A

Private mergers and reorganisations
Switzerland | 12 June 2019

Under Swiss law, the acquisition of a business may be structured as a mere share deal, a mere asset deal or – according to the Merger Act – a statutory merger, demerger or bulk transfer. This article outlines the private law aspects of private statutory mergers and distinguishes between domestic and cross-border statutory mergers.

Approvals for share deals in Switzerland
Switzerland | 30 January 2019

Sale and purchase transactions with respect to privately held companies in Switzerland are usually structured as share or asset deals or, in certain cases, bulk transfers or mergers. This article provides an overview of the approvals and authorisations that might be required with respect to a share deal in Switzerland. In particular, it focuses on the laws regulating foreign investments in Switzerland and summarises their key characteristics.

Opting-out clauses in Swiss takeover law
Switzerland | 01 August 2018

The Takeover Board recently assessed whether adopting an opting-out clause which will apply only to two specific investors and only for a period of five years is permissible from a takeover law perspective. In its decision, the Takeover Board confirmed its case law on selective opting-out clauses. However, there is still considerable legal uncertainty in this area.

Competing public offers in Switzerland – recent case law
Switzerland | 18 April 2018

Public takeover offers are regarded as competing offers if, at the time of their publication, another offer in relation to the target has already been launched. To guarantee freedom of choice of the recipients of the offers, and to avoid the sequence of offers influencing the shareholders' decision, the law sets forth specific rules for competing offers. In the recent LifeWatch case, the Takeover Board took its position on issues relating to multiple offerors.

Legal framework for group financings under Swiss law
Switzerland | 13 December 2017

Switzerland recently decided to facilitate the financing activities of groups operating in or out of Switzerland by easing some restrictions under the Withholding Tax Ordinance. The amendment of the ordinance is meant to strengthen the establishment of headquarter activities with further central corporate functions, as well as treasury activities, particularly those performed outside Switzerland.

Permitted conditions for public offers in Switzerland
Switzerland | 05 July 2017

In a recent case regarding the takeover of Actelion by Johnson & Johnson, the Takeover Board expanded its case law on the permissibility of conditions in public takeover offers. In this case, the Takeover Board had to assess whether the implementation of a demerger of a business division from the target constituted a permissible condition within a public offer.

MAC clauses in Swiss M&A transactions
Switzerland | 03 May 2017

The completion of larger M&A transactions is usually conditional on the absence of material adverse changes (MAC). This can be achieved by including either a MAC clause or a condition that all warranties must be true at completion in combination with a warranty confirming the absence of a MAC. A MAC clause defines what is deemed to be a MAC of the target company and entitles the acquirer to step back from the proposed transaction in case a MAC event has occurred or is alleged to have occurred.

Settlement of target equity award programmes in view of best-price rule
Switzerland | 12 October 2016

In a recent Takeover Board case, the offeror filed a request with the board for approval that it should – before the distribution of the special dividend – have the right to acquire shares outside the offer without triggering the best-price rule. In its decision, the board stressed the importance of the offer price as a reference for the best-price rule and held that any acquisition of shares for a consideration above the offer price would violate the rule.

Valuation of privileged voting shares in a public offer
Switzerland | 13 July 2016

The Takeover Board has reviewed the methods of valuing different share categories of a target and the monetary value of additional covenants and obligations entered into by a shareholder. The decision is relevant for the interpretation of similar provisions under the Merger Act, requiring equal treatment of shareholders in the context of a merger, demerger or conversion.

Hostile tender offers under public takeover law
Switzerland | 29 June 2016

Swiss M&A transactions involving public companies are mainly governed by the Financial Market Infrastructure Act, which replaced the former Federal Act on Stock Exchanges and Securities Trading. This regulates both friendly and hostile public takeovers for Swiss resident companies with at least one class of equity security listed on a Swiss exchange, and for foreign resident companies whose shares are mainly listed on a Swiss exchange.

Revised disclosure rules for significant shareholdings
Switzerland | 06 April 2016

On January 1 2016 revised regulations for the disclosure of significant shareholdings in listed companies and amendments to takeover regulations took effect. The new regulatory framework regulates key market infrastructures and incorporates many former provisions of the Stock Exchange Act, including those on public takeovers and those relating to the disclosure of significant interests in listed companies.

Management incentives in public takeovers
Switzerland | 23 March 2016

In the context of a friendly public offer, the bidder will usually seek to enter into a transaction agreement with the target. Such a transaction agreement customarily includes provisions regarding the continuance of the contractual relationship between the target and its management, as well as the (dis)continuance of certain target board members' mandates as per the settlement of the public offer.

Act leads to amendments of public takeover law
Switzerland | 24 February 2016

The Federal Council recently enacted the Financial Market Infrastructure Act. While the act requires the formal alignment of the Takeover Ordinance with the provisions relating to takeovers, the amended ordinance brings substantive changes. By implementing these changes, the Takeover Board acknowledges that electronic publication has become the standard procedure for disseminating important financial information.

New rules for publication of documents relating to public tender offers
Switzerland | 10 February 2016

An amendment of the Ordinance of the Takeover Board on Public Takeover Offers has entered into force, abolishing the requirement that announcements and notices relating to a public offer be physically published in newspapers. Consequently, the Takeover Board has issued guidance on the newly applicable rules for the publication of the offer documents.

Validity of opt-out clauses: Takeover Board issues decisions in Sika battle
Switzerland | 15 April 2015

Two recent Takeover Board decisions have determined the validity of an opt-out clause in the Sika takeover. The board had to ascertain the validity of an opt-out clause in Sika's articles of association and determine whether the opt-out clause applied in the contested acquisition by Compagnie de Saint-Gobain SA.

Relevance of Minder Initiative to M&A transactions
Switzerland | 11 March 2015

In March 2013 the Swiss voting population approved the fiercely debated 'Rip-off Initiative', originally launched in 2008 by Thomas Minder. Its incorporation into national law is now ongoing. It remains to be seen how this will affect public M&A transactions involving Swiss corporations with publicly listed shares. The consequences are extensive and company boards should carefully consider the implications.

Acquisitions facilitated by revised restructuring provisions
Switzerland | 05 March 2014

Amendments to the Debt Enforcement and Bankruptcy Act and the Code of Obligations recently entered into force, increasing the attractiveness of acquisitions of distressed businesses and facilitating restructurings. The revised law makes composition proceedings more attractive for both the company and a potential acquirer. For a company in distress, the new law makes it easier to overcome legal hurdles.

Rules applicable to buy-back programmes
Switzerland | 22 January 2014

The Takeover Board recently modified Circular 1 regarding buy-back programmes. The revised circular brings, in particular, some changes to the reporting and publication procedure. It is therefore important that all existing buy-back programmes take the revised circular into account.

Continuation of past practice regarding introduction of opt-out clauses
Switzerland | 28 August 2013

The Takeover Board's practice regarding the evaluation of the validity of an opt-out clause has recently undergone several changes. Transparency requirements must now be met not only at the shareholders' meeting itself, but also with regard to the information provided in the invitation to the meeting, so that the shareholders can understand the reason for, and the effects of, the opt-out clause.

Implementation of Federal Administrative Court decision on Quadrant
Switzerland | 03 July 2013

In November 2010 the Federal Administrative Court handed down a decision in a public takeover matter as a result of an amendment in the regulatory framework governing public takeovers. The court rejected part of the Takeover Board's previous decisions. As a result, the board had to reassess numerous issues, and recently handed down its decision regarding the adequacy of the share price offered to the public shareholders.

Takeover Board confirms opt-out practice
Switzerland | 20 February 2013

The Takeover Board previously expanded its practice with regard to the evaluation of the validity of opt-out clauses. In two recent cases, the board had to decide whether opt-out clauses introduced after listing were valid. The board also took this opportunity to reflect on its own practice. These decisions show that board practice is still variable and can be expected to undergo further changes and/or clarifications.

Control premium
Switzerland | 28 November 2012

The Swiss legislature has recently passed an amendment to the rules of the Stock Exchange Act. The new rules will, among other things, abolish the possibility for an offerer to pay a control premium to the controlling shareholders of a target company shortly before the launch of a public tender offer.

Squeeze-out mergers: Supreme Court's view on valuation issues
Switzerland | 20 June 2012

A new majority shareholder must take minority shareholders' interests into account. An offeror has two legal options to exclude or 'squeeze out' minority shareholders under the Stock Exchanges and Securities Trading Act and the Merger Act. The Supreme Court recently clarified certain questions relating to a squeeze-out merger following a successful public takeover bid, which was challenged under the Merger Act.

Takeover Board becomes more lenient regarding opt-out clause
Switzerland | 15 February 2012

It appears that the Takeover Board will no longer review opt-out clauses in instances where the shareholders have been fully informed and made aware of the consequences and implications of the introduction of such clauses. This is rather astonishing, especially since in the last reform of the Securities and Stock Exchange Act, the legislature intended to substantially strengthen the position of minority shareholders.

Federal Administrative Court rules on Quadrant public takeover
Switzerland | 07 December 2011

In the first case in which it has acted as the court of final instance in relation to a public takeover, the Federal Administrative Court recently oversaw a case regarding a high-profile public takeover. In light of the case, offerors would be well advised to use the most simple transaction structures possible in future public takeovers in order to avoid the increasingly costly and time-consuming processes involved with legal challenges from shareholders.

New regulatory framework: impact on public offers
Switzerland | 30 November 2011

In 2009 the Swiss legislature enacted the Financial Market Supervision Act and made several changes to the Act on Stock Exchanges and Securities Trading relating to public offers. In view of these changes in the legislation, FINMA and the Takeover Board undertook a general overhaul of the FINMA Stock Exchange Ordinance and the Ordinance on Public Takeovers. This update analyses the impact of these changes.

Disclosure of significant interests in listed companies' voting securities
Switzerland | 03 November 2010

In 2009 the rules governing the disclosure obligations relating to interests in listed companies' voting securities were substantially revised. In addition, the authorities in charge of supervising compliance with these obligations have investigated a number of potential violations of the rules. These investigations have attracted media attention and have become the subject of intensive discussion among legal experts.

Swiss Takeover Regulations Revised
Switzerland | 08 April 2009

The Federal Act on Stock Exchanges and Securities Trading and its associated ordinances have been revised. The new takeover regulations reflect the existing practice of the Takeover Board, but also include several amendments to the rules governing public tender offers. This update summarizes the general rules to be considered by a bidder when determining an offer price and the new rules on exchange offers.

Acquiring Private Companies: Protection against Undisclosed Liabilities
Switzerland | 07 January 2009

The principal methods of buying a Swiss company are to buy its assets or shares, or to merge the target with the acquirer or with a newly formed subsidiary of the acquirer. Choosing the appropriate legal structure for the acquisition is the starting point of each transaction and will have a major impact on the risks of the acquirer to assume undisclosed liabilities.