Corporate Finance/M&A updates

Austria

Contributed by Schoenherr
Supreme Court facilitates financing companies with cross-border business
  • 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.

Constitutional Court rules on Squeeze-Out Act's compatibility with Constitution
  • Austria
  • 31 October 2018

The Constitutional Court recently ruled on whether the Squeeze-Out Act is compatible with the Constitution. The plaintiff argued that certain provisions of the Squeeze-Out Act violate the Constitution because they restrict shareholders' property rights and the principle of equality (rights enshrined in both the Constitution and the European Convention on Human Rights). However, the Constitutional Court held that this was not the case.

Privacy-related representations in M&A agreements
  • Austria
  • 09 May 2018

Companies regularly store information about their customers, clients, employees, investors, partners and vendors. Privacy and data security are therefore important aspects of most M&A transactions. Although the risk of non-compliance with privacy laws may result in severe negative consequences, many M&A agreements still lack adequate privacy-related representations and warranties.

ECJ rules on subordinated loans and cross-border mergers
  • Austria
  • 07 September 2016

In 2014 the Austrian Supreme Court submitted a request to the European Court of Justice (ECJ) for a preliminary ruling on the interpretation of EU law regarding cross-border mergers. The ECJ recently ruled that in cases of merger by acquisition, all contracts entered into by the transferor company pass to the acquiring company without novation. Thus, the law applicable to the contracts before the merger also applies to the underlying contracts after the merger.


Cyprus

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.

Mergers and reorganisations – an overview
  • Cyprus
  • 23 January 2019

Cyprus boasts an attractive merger and reorganisation regime not only locally (ie, between Cyprus entities), but also at an EU level. Besides the well-known advantages of merging two companies (eg, the transfer of assets and liabilities without the need for the novation of contracts or other cumbersome procedures), mergers and reorganisations in Cyprus are also attractive from a tax perspective, as those which fall within the scope of the law may result in a total tax exemption in Cyprus.

Financing through shadow banking – what to look out for
  • Cyprus
  • 02 May 2018

Cyprus is a popular jurisdiction for establishing special purpose vehicles with an increased involvement in shadow banking, which takes the form of, among other things, securities lending, repurchase and derivatives transactions. This has resulted in a call for strengthened regulations to mitigate risks and support financial stability. Newly introduced regulations now bring non-financial counterparties, such as limited liability companies, into the ambit of transparency reporting.

Mergers of cooperative societies
  • Cyprus
  • 04 October 2017

Following the economic crisis, Cyprus witnessed the merging of several cooperative societies, mainly cooperative credit institutions. These mergers reduced the number of cooperative credit institutions from over 300 to just 18. However, in July 2017 a second merger took place which saw the 18 institutions merged into a single entity. Although cooperative societies are limited liability companies, the procedure that must be followed for merging such companies varies significantly.


European Union

The 'dark' side of the data room: disclosure dangers in M&A and finance transactions
  • European Union
  • 03 October 2018

The disclosure, transfer and processing of data raises concerns at several stages of the due diligence process during a transaction and undoubtedly makes things more complicated. Unless companies can navigate their way around the rules set out by the General Data Protection Regulation, it is highly likely that they will encounter significant difficulties and potential data protection breaches in the context of due diligence work undertaken for M&A transactions.

European Union to tighten control over foreign investment
Baker McKenzie CVBA/SCRL
  • European Union
  • 01 November 2017

The European Union has proposed a new EU framework for screening foreign investment that raises security and public order concerns for the European Union and its member states. The commission intends to launch, and possibly complete, the proposed framework by the end of 2018. Opposition by several member states means that it is unclear whether the proposal will be approved by the Council of the European Union.


France

Contributed by AyacheSalama
Private M&A transactions and PACTE
  • 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.

How to deal with existing pre-emption rights in private M&A transactions
  • 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.

Private M&A transactions: new decree on foreign investments enters into force
  • 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.

Private M&A deals: recent case law strengthens shareholders' agreements
  • France
  • 12 December 2018

In the context of the acquisition of group companies, the parties will carefully select what to insert in the bylaws of the company, whereas in separate private agreements, which are confidential, the parties may include further, more detailed information. If the advantage of such private agreements is their confidentiality, the drawback is their lack of enforceability against third parties. The Supreme Court recently held that a sale made in violation of a shareholders' agreement was void by application of the bylaws.

Protecting the state's interest in strategic companies: a 'golden touch'
  • France
  • 05 September 2018

Over the past 10 years, the French M&A market has seen the rise of a powerful new player: the French state. A newly introduced bill would expand the state's ability to oppose the sale or transfer of assets by certain strategic companies in which it holds shares. The changes, which are of particular interest to the M&A community, are part of an omnibus reform of French corporations law known as the Action Plan for Business Growth and Transformation.


Guernsey

How Guernsey is benefiting from global M&A boom
Ogier
  • Guernsey
  • 24 October 2018

A variety of factors are fuelling a sustained boom in M&A activity around the world, including a number of mega-deals across a variety of sectors. Irrespective of deal size, a wide range of positive factors has driven deal volume. All of this is good news for the financial services community in Guernsey, which is seeing significant growth in work as a result – not least law firms with experienced M&A teams.