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Overview
Including: Significant M&A transactions over the past year; Public takeovers; Recent legislative changes; Impact on transaction planning; Opting out; Further proposed changes.

Tender offer activities have increased substantially in Switzerland in recent years, and more and more hostile takeover bids and competing offers are being launched. Although Swiss takeover regulations follow the principles generally known in the European Union, the Swiss regulator is not bound by the EU Takeover Directive. This update highlights some particularities of Swiss takeover regulations.

The board of directors of a Swiss publicly held company that is the target of a public takeover faces a plethora of complex questions that must be answered quickly. By preparing early, the board can lay the organizational and technical foundations for a takeover situation that will allow it to react appropriately and provide active and timely leadership in the interests of the company.

Indirect partial liquidation, which occurs upon the sale of shares by an individual to a corporation, is a controversial issue in Swiss tax law. While new legislation on the matter is to be welcomed, it merely limits the concept of indirect partial liquidation rather than abolishing it altogether. Moreover, absorption of the acquired corporation within five years of the sale remains practically impossible.

In recent years a trend has emerged of subjecting M&A contracts to arbitration instead of litigation. Mediation and expert determination also play an important role in the resolution of M&A disputes. This update looks at the reasons for the trend towards arbitration and alternative dispute resolution methods, and explains the various possibilities that the parties have for resolving their M&A disputes.

Public tender offers for listed companies are increasingly reinforced in Switzerland by transaction agreements between the bidder and the target and/or the target’s major shareholders. Although such agreements are customized for each individual case, trends can be detected which differ from Anglo-Saxon structures due to the Swiss legal framework.

Hostile tender offers are becoming more common in Switzerland, as two Swiss industrial companies have experienced in recent months. Both companies claimed that the hostile bidder's offer was unsatisfactory and both ultimately sought a 'white knight'. They also tried to fight the unfriendly invaders using measures which did not always find favour with the Swiss Takeover Board.

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