Latest updates
In Delaware, notices and deadlines matter
Ropes & Gray LLP- USA
- 03 July 2019
A recent Delaware Court of Chancery decision is illustrative of the principle that merger partners should not assume that anything less than strict compliance with notice requirements (particularly when they relate to termination rights) and deadlines in a merger agreement will be enforced. The case is also a cautionary tale of why one merger partner should never assume that the other merger partner still wants to do the deal as much as it does.
Private mergers and reorganisations
Meyerlustenberger Lachenal- 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.
Leverage buyouts – an overview
Kayum & Demir- Turkey
- 29 May 2019
A leveraged buyout (LBO) is a term used for a variety of transactions in which buyers (usually private equity firms) use leverage to acquire a company's shares. However, it is impossible to fully mitigate the risk that a target is deemed to provide financial assistance for the purchase of its own shares if the acquirer uses an LBO and the target provides guarantees or securities over its own assets due to a lack of established precedents. This uncertainty means that a diligent analysis is required for each transaction.
Supreme Court facilitates financing companies with cross-border business
Schoenherr- Austria
- 15 May 2019
For the first time, the Supreme Court has upheld a security right granted under German law, even though the asset had been transferred to Austria. Previously, such rights were terminated once the asset was moved from Germany to Austria. The decision will substantially facilitate the financing of companies with cross-border business.
DOJ commentary underscores importance of pre-acquisition diligence
Ropes & Gray LLP- USA
- 15 May 2019
In a July 2018 conference speech the Department of Justice (DOJ) deputy assistant attorney general (DAAG) for the Criminal Division underscored the importance of pre-acquisition Foreign Corrupt Practices Act (FCPA) diligence. The DAAG's remarks reinforced FCPA enforcement as a DOJ priority and provided a disclosure roadmap for buyers that uncover FCPA-related misconduct both pre and post-acquisition.
How to deal with existing pre-emption rights in private M&A transactions
AyacheSalama- France
- 08 May 2019
The Supreme Court recently ruled that the granting of a call option over an asset which is subject to a pre-emption right violates such pre-emption right. In this specific case, the call option had been exercised when the pre-emption right was no longer applicable. However, the court held that the transfer had breached the pre-emption right as it had resulted from the exercise of a call option agreement that had been entered into when the pre-emption right was still applicable.
Takeover Panel: roundup of recent panel statements
Davis Polk & Wardwell LLP- United Kingdom
- 24 April 2019
The Takeover Panel recently published a revised version of the Takeover Code to reflect amendments relating to the response statement to its October 2018 consultation on asset valuations and the Financial Conduct Authority's announcement that it will phase out the United Kingdom Listing Authority name. In addition, the panel recently published a rule-making instrument concerning the response statement to its consultation on the United Kingdom's withdrawal from the European Union.
Addressing #MeToo in M&A
Ropes & Gray LLP- International
- 17 April 2019
Companies in all industries are facing heightened reputational and legal risks in the #MeToo era, as employees are more likely to identify and report instances of misconduct or discrimination in the workplace (and such instances are more likely to become public). In the world of M&A, reputational and legal risks are ultimately risks to the bottom line – prompting private equity sponsors, institutional investors and strategic purchasers to focus on #MeToo issues when sourcing, diligencing and negotiating investments.
Chancery Court revisits fair value analysis in AOL appraisal action
Ropes & Gray LLP- USA
- 10 April 2019
The Delaware Court of Chancery has issued its original opinion in a consolidated appraisal action arising out of Verizon Communications Inc's 2015 acquisition of AOL Inc. In contrast to a recent string of Delaware appraisal decisions, the court determined that reliance on the $50 per share merger price for determining AOL's statutory fair value was not warranted.
Delaware's amendments apply market-out exception to appraisal rights for Section 251(h) mergers
Ropes & Gray LLP- USA
- 03 April 2019
Delaware Governor John Carney recently signed into law amendments to the Delaware Limited Liability Company Act and the Delaware General Corporation Law. Notably, the amendments expand the application of the market-out exception to appraisal rights, which has long been applicable to 'long-form mergers', to also include 'medium-form mergers'.
Court provides guidance on applicability of transaction price as measure of fair value
Ropes & Gray LLP- USA
- 27 March 2019
Two Delaware appraisal decisions issued in 2018 illustrate that, following the Delaware Supreme Court's decisions in Dell and DFC, the Delaware courts remain willing to give substantial evidentiary weight to a deal price as an indicator of fair value where the underlying transaction is the product of an open process characterised by the objective indicia of reliability.
Squeeze-out mergers in Turkey – an overview
Kayum & Demir- Turkey
- 20 March 2019
Squeeze-outs in Turkey are regulated under the Commercial Code where they concern private companies and the Capital Markets Law where they concern publicly held companies. This article examines the different processes for carrying out squeeze-outs at private and publicly held companies, as well as the squeeze-out rights available to controlling shareholders and the squeeze-out merger process.
Chancery Court applies MFW framework in private equity merger transaction
Ropes & Gray LLP- USA
- 13 March 2019
A recent decision applied the framework established by the Delaware Supreme Court in Kahn v M&F Worldwide Corp (MFW) and found that a merger transaction with a controlling private equity fund on both sides was entitled to business judgment review. The decision outlines the elements of the MFW roadmap and clarifies that its ab initio requirement requires only that the elements be in place prior to the commencement of negotiations.
M&A opportunities in Cyprus post-Brexit
- Cyprus
- 27 February 2019
There has been a noticeable rise in foreign investments in Cyprus, with an upswing in mergers, acquisitions and joint ventures. This has been the result of various reforms and legislative amendments that have added legal certainty and contributed to the creation of a coherent statutory framework. International investors might well consider these factors when assessing Cyprus as an investment hub for future transactions in the M&A market post-Brexit.
Private M&A transactions: new decree on foreign investments enters into force
AyacheSalama- France
- 20 February 2019
The rules and procedures for protecting the interests of French companies when it comes to foreign investments have been amended by Decree 2018/1057, which came into effect on 1 January 2019. The new decree has extended the control of foreign investments to new sectors and enabled targets to take an active part in the process by giving them the right to directly ask the Ministry of Economy and Finance whether the foreseen investment is subject to a prior authorisation.
Enforceability of drag-along mechanism for limited liability companies
Schoenherr- Romania
- 13 February 2019
In Romania, joint stock and limited liability companies continue to be the most common type of corporation. Limited liability companies are an important backbone of the local economy, with many becoming large enough to qualify as targets in M&A transactions. However, debate exists as to whether classical exit-related provisions (eg, put or call options or drag-along or tag-along clauses) may be implemented in M&A transactions involving shares in limited liability companies.
Sky takeover – post-offer undertakings
Davis Polk & Wardwell LLP- United Kingdom
- 06 February 2019
One of the highest profile public M&A transactions of 2018 was the competitive takeover battle between Comcast and Fox for control of Sky, against the backdrop of Disney's proposed merger with Fox. This article looks at the post-offer commitments given by each of the bidders in connection with their competing offers.
Approvals for share deals in Switzerland
Meyerlustenberger Lachenal- 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.
Sky takeover – regulating an auction process
Davis Polk & Wardwell LLP- United Kingdom
- 30 January 2019
One of the highest profile public M&A transactions of 2018 was the competitive takeover battle between Comcast and Fox for control of Sky, against the backdrop of Disney's proposed merger with Fox. As the first competitive process to proceed to an auction since the introduction of the default auction rules into Appendix 8 of the Takeover Code in 2015, the auction for Sky has been watched closely by public M&A practitioners.
Sky takeover – applying the chain principle
Davis Polk & Wardwell LLP- United Kingdom
- 23 January 2019
One of the highest profile public M&A transactions of 2018 was the competitive takeover battle between Comcast and Fox for the control of Sky, against the backdrop of Disney's proposed merger with Fox. As Disney was proposing to merge with Fox and one of Fox's assets was a 39% stake in Sky (which is subject to the Takeover Code), the Takeover Panel Executive had to consider whether to apply the chain principle to Disney if it successfully acquired Fox.
