Latest updates
Common pitfalls in M&A deals and how to avoid them
Kayum & Demir- Turkey
- 19 February 2020
This article examines some of the key considerations for buyers and sellers when entering into an M&A transaction and how best to navigate deal-related risks. For example, in Turkey, M&A deals are generally not subject to regulatory approval. However, depending on the turnovers of the buyer, seller and target, a proposed transaction may be subject to Competition Board approval. Further, M&A deals in some regulated sectors (eg, energy and telecoms) must be approved by the governmental authorities.
Downstream mergers under Polish company law
Kubas Kos Gałkowski- Poland
- 19 February 2020
The Code of Commercial Companies allows for mergers of both independent companies and related entities. Concerns arise when subsidiaries take over dominant companies (so-called 'reverse' or 'downstream' mergers) and the domination results in a subsidiary having a controlling shareholding package. While downstream mergers are admissible under Polish company law, a high level of uncertainty remains as to whether they will be accepted by a particular registry court.
New registration requirements for unregulated investment funds
Ogier- Cayman Islands
- 12 February 2020
The government recently approved the Private Funds Bill 2020 and an amendment to the Mutual Funds Law (2020 Revision). The legislation is the result of certain EU and other international recommendations and has been developed to align the Cayman Islands investment fund regulatory regime with those of other jurisdictions. This article summarises the key features of both pieces of legislation.
Public M&A on trial: contested takeover schemes
Davis Polk & Wardwell LLP- United Kingdom
- 29 January 2020
UK public takeovers can be structured either as a court-approved scheme of arrangement under the Companies Act 2006 or a contractual offer. This article examines two cases which highlight the types of objection raised by shareholders and provide an understanding of the approach taken by the English courts in applying their judicial discretion to sanction a scheme.
Private M&A deals: Supreme Court validates substitution clause in share purchase agreement
AyacheSalama- France
- 18 December 2019
A recent Supreme Court decision validates the substitution mechanisms in the context of M&A transactions. The mechanism is particularly helpful in M&A transactions where a sponsor signs the initial agreements and, once a structure has been agreed, substitutes a special purpose vehicle to carry out the transaction. However, M&A practitioners should remain vigilant when drafting substitution clauses to ensure that they clearly state the parties' intentions as to the full release (or not) of the original party.
Takeover Panel imposes 'cold-shouldering'
Davis Polk & Wardwell LLP- United Kingdom
- 04 December 2019
The Takeover Panel recently published a panel statement which provides helpful guidance on the factors that it will take into consideration when determining whether a person should be cold-shouldered. Cold-shouldering is the most serious disciplinary power available to the panel and has rarely been used – until now.
Due diligence requirements regarding share ownership and related compliance in M&A transactions
Meyerlustenberger Lachenal- Switzerland
- 16 October 2019
In Swiss M&A practice, share deals remain the most common method of acquiring a business from a third party for several reasons. Due to strict Federal Supreme Court precedents, legal due diligence regarding share ownership and related compliance has always been a fundamental component of legal due diligence in Swiss share deals. Recent legislative changes have further increased the importance of thorough due diligence in this regard.
New crowdfunding platform regulations
Gorodissky & Partners- Russia
- 16 October 2019
The president recently signed Federal Law 259-FZ of 2 August 2019 on Raising Investments via Investment Platforms and on Amending Certain Legislative Acts of the Russian Federation. The law, which is set to take effect from 1 January 2020, reflects the growing trend in Russia of increased regulation of digital economy issues.
Modernisation of private M&A transactions and PACTE: part two
AyacheSalama- France
- 09 October 2019
The Action Plan for Business Growth and Transformation was recently adopted. This ambitious law introduces (among other things) a new arsenal for the French state to monitor foreign investment in sensitive industries. It has also brought with it several answers, clarifications and improvements to existing rules applicable to the preferred shares and free share allocation plans regimes, which will undoubtedly be useful to investors and companies undertaking private M&A transactions.
Private M&A on trial: interpreting private M&A sale and purchase provisions
Davis Polk & Wardwell LLP- United Kingdom
- 11 September 2019
Two recent High Court of Justice decisions provide guidance on the interpretation of provisions customarily included in sale and purchase agreements for the acquisition of private companies or businesses. In the first decision, the court considered whether the provisions of a purchase price procedure were conditions precedent. In the second decision, the court considered the scope of a restrictive covenant in an employment agreement and its impact on sale and purchase agreements.
New BKPM regulation clarifies guidelines and procedures for licensing and facilities under FDI regime
ABNR- Indonesia
- 11 September 2019
Indonesia's Investment Coordinating Board (BKPM) recently issued a new regulation that amends BKPM Regulation 6/2018, which sets out guidelines and procedures for licensing and facilities under Indonesia's foreign direct investment (FDI) regime. The most significant changes include the reaffirmation that certain FDI companies must comply with divestment obligations and the confirmation that shareholding foreign directors and commissioners are exempt from the normal expatriate employment rules.
Private M&A on trial: damages for breach of private M&A accounting warranty
Davis Polk & Wardwell LLP- United Kingdom
- 04 September 2019
The High Court of Justice recently considered two disputes regarding breaches of warranties arising from the acquisitions of private companies. The decisions affirm the orthodoxy that the measure of damages for breach of warranty included in a sale and purchase agreement for the sale of shares is the diminution in the value of the shares purchased but also sound a warning to sellers that have struck a poor economic bargain.
Bulk transfers
Meyerlustenberger Lachenal- Switzerland
- 28 August 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 corporate law aspects of bulk transfers and distinguishes between domestic and cross-border bulk transfers.
KCOM takeover – Takeover Code default auction process
Davis Polk & Wardwell LLP- United Kingdom
- 14 August 2019
Since June 2019, Universities Superannuation Scheme and Macquarie have been engaged in a competitive takeover battle for KCOM (a telecoms company). As was the case for the recent Sky takeover, it proceeded to an auction. However, instead of the parties agreeing to their own set of rules for the auction, the Takeover Panel's default auction rules were used, making it the first time that they have been used for a UK takeover.
Private M&A transactions and PACTE: part one
AyacheSalama- France
- 31 July 2019
The recently adopted Action Plan for Business Growth and Transformation contains new rules that will be of interest to parties that undertake private M&A transactions, particularly those involving foreign investment. Further, it clarifies the measures that the minister of economy can take should an investor pursue an investment without prior authorisation or fail to comply with the conditions set out by the minister in such prior authorisation.
In Delaware, notices and deadlines matter
- 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.
DOJ commentary underscores importance of pre-acquisition diligence
- 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.
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.
