Publications for Corporate and M&A Law Committee
Deferred consideration by ‘foreign owned or controlled’ Indian companies – regulatory overhang
After the Reserve Bank of India issued notices to a few ‘foreign owned or controlled’ Indian companies for deferring part of the consideration payable in regard to their downstream investments in other Indian companies, Indian transaction advisors are faced with a dilemma. Structuring deals with deferred consideration for acquisitions through ‘foreign owned or controlled’ Indian companies has become a risky proposition. This article argues that a complete ban on this practice is not only commercially impractical, but also potentially misaligned with the original regulatory intent.
Released on May 14, 2024
The same, but different? The new Flexible Capital Company in Austria
The introduction of the Flexible Capital Company (Flexible Kapitalgesellschaft, FlexCo) as a new form of company, as of 1 January 2024, constitutes a landmark moment in the history of Austrian corporate law. The FlexCo has many similarities to the Gesellschaft mit beschränkter Haftung (GmbH), which is the standard domestic private limited liability company that was introduced over a century ago. In fact, the FlexCo Act contains a general reference to the provisions applicable to the GmbH for all matters not regulated therein. After five years of political negotiations over several legislative periods, Austria introduced the FlexCo to provide a dynamic, ‘flexible’ alternative to the GmbH, in particular, to address the needs of the entrepreneurial founder community. In addition, the introduction of the FlexCo has also prompted a number of changes to other Austrian regulations.
Released on May 14, 2024
Securing your stake: navigating minority shareholder rights in Spanish sociedades limitadas
This article explores the essential rights of minority shareholders in Spain’s venture capital and private equity sectors, focusing on the integration of statutory protections and negotiated contractual rights within investment agreements. By detailing both the statutory and contractual frameworks available, this paper explains how these rights safeguard investments and promote equitable participation, thereby enhancing the attractiveness of Spanish markets to foreign investors.
Released on May 14, 2024
The revenge of the ‘Russia roulette’ clause
Imported into Italy, France and Europe from the Anglo American legal practice to solve the crisis of governance in 50/50 joint ventures, after a period of slow use, the ‘Russian roulette’ clause has taken its revenge through several recent court decisions, which have confirmed its validity under Italian and French law.
Released on May 14, 2024
Unlocking corporate deadlock: controlling the gamble
Within the intricate tapestry of corporate governance, conflicts and disagreements are inevitable. However, when these tensions escalate to the point of impeding decision-making and paralysing the functioning of a company, they give rise to what is known as corporate deadlock. The manner in which shareholders choose to solve deadlocks is essential for preserving the functionality and long-term viability of companies.
Released on May 14, 2024
The importance of foreign-owned or controlled companies in India and the need for a more lucid regulatory framework to govern them
Foreign-owned or controlled companies (FOCCs) play a vital role in attracting foreign investment into India by enabling multinational corporations (MNCs) to consolidate their businesses in India, and buyout private equity funds are crucial in setting up investment platforms for making further investments in India through bolt-on merger and acquisition (M&A) activity. Yet, Indian exchange control regulations governing FOCCs continue to be riddled with ambiguity, thus creating inconsistencies and posing practical challenges, especially when structuring M&A transactions. This article sheds light on the strategic importance of FOCCs in attracting foreign investment into India and the major lacunae in India’s exchange control regulations governing FOCCs, which continue to pose challenges for investors.
Released on May 14, 2024
Cross-border M&A transactions in emerging economies: international legal harmonisation and the viability of an international corporate legal order
Thanks to globalisation, the assimilation of legal principles across jurisdictions is not uncommon. Assimilation is not a novel concept, as laws, being statutory responses to states’ socio-economic needs, cannot be perceived in isolation with international trends drifting towards globalisation. Assimilation comes with specific advantages for emerging economies, as their commercial legal systems are relatively nascent and, consequently, flexible enough to mould themselves towards garnering investments.
Released on Jan 17, 2024
The legal negotiation of corporate governance in corporate finance transactions in France
Negotiating the governance rules that are applicable post-closing in a corporate finance transaction is crucial – whether the transaction is a round of funding, an leveraged buyout operation or even an acquisition. This article assesses the process of doing so in France.
Released on Nov 29, 2023
The in-house perspective – session report from the IBA 20th Annual International Mergers & Acquisitions Conference (2023)
This session at the IBA 20th Annual International Mergers & Acquisitions Conference focused on artificial intelligence (AI). The panel discussed three sub-topics in particular: adop-tion of AI by businesses and the role of general counsel in this respect; intellectual property (IP) issues/strategies related to AI; and the adoption of AI by legal departments.
Released on Sep 17, 2023
A review of the worldwide marketplace (2023)
This session included a look at the key factors leading to the current downturn in M&A, namely availability of financing (which is at its most expensive since the global financial crisis); valuations (equity valuations reasonable on a current basis, but there is a gap in buyer/seller expectations); and boardroom/CEO confidence (decision-makers need confidence in their ability to predict the future – this is very hard now as there no consensus, and this stifles M&A activity).
Released on Aug 6, 2023
Technology M&A (2023)
Technology transactions and technology itself have been a huge factor in global M&A, and corporate law and governance, over the last few years. During this panel discussion, speakers broadly discussed technology M&A, including: the latest deals, complications and lessons learned; the impact of macro trends on tech M&A; and the impact of technology in M&A, including cybersecurity, privacy, and foreign investment reviews of technology transactions.
Released on Aug 6, 2023
Exits in private equity transactions in France: the legal negotiations
Exit strategies play a crucial role in private equity transactions, encompassing both venture capital and leveraged buyouts (LBOs). The exit phase represents the culmination of founders’ efforts and sacrifices, while investors realise the anticipated value appreciation from their initial investment. Various exit routes can be considered, including an initial public offering, sale to an industry player, or a secondary LBO where another fund invests alongside management in a holding company, facilitated by substantial debt financing.
Released on Jun 28, 2023
Post-event report: mergers and acquisitions in India: is India the last oasis of hope in a global slowdown?
This conference was based on the theme of M&A from an India-centric point of view. However, attendees benefitted from cross-jurisdictional insights on topics such as: environment, social and governance (ESG) factors; regulatory implications on deal-making; insolvency and bankruptcy; financial sponsors; and outlook on investments, divestments and generally how to bullet-proof deals.
Released on Jun 8, 2023
Private equity today (2023)
This conference session began with an overview of private equity markets, which noted that dealmaking and capital invested in PE markets had been increasing before the Covid-19 pandemic. However, there was a slowdown in the market in 2022; it is projected to return to 2018 levels in 2023. In terms of industry, there has been an increasing concentration of technology deals. She mentioned that fundraising for private equity and asset managers has slowed, but there is an uptick in infrastructure funds and direct lending.
Released on Jun 5, 2023
The pros and cons of anti-sandbagging provisions in share and purchase agreements
Anti-sandbagging provisions in share and purchase agreements (SPAs) are designed to protect buyers and sellers from potential issues arising post-closing. But are they always beneficial for both parties? This article takes a closer look at the pros and cons of anti-sandbagging provisions from the perspectives of buyers and sellers.
Released on Jun 1, 2023
Virtual becomes reality: online formation of a German limited liability company
The German legislator has taken a step forward towards digitising German corporate law by introducing an online formation procedure for limited liability companies, which balances practical improvements and security needs. While the new procedure may help to save time and costs for certain non-German founders, the scope is limited, as only specific European identification documents are compatible and, furthermore, original (ie, paper) versions of certain documents are still required is some cases.
Released on Jun 1, 2023
Saudi Arabia's foreign direct investment legal framework and outlook
Over the last year, Saudi Arabia has experienced a surge in FDI. In Q3 of 2022, FDI inflows to the tune of SAR 7.2bn (US$1.9bn) were reported by the Investment Ministry. This was an impressive surge compared to 2021, which saw SAR 6.5bn worth of investment during the same quarter. This 10.7 per cent growth in FDI inflows is a testament to the growing attractiveness of Saudi Arabia as an investment destination. By 2030, the Saudi Arabian government aims to reach US$100bn in annual FDI, an ambitious but achievable goal if current trends continue.
Released on Apr 6, 2023
Foreign merger control in Nigeria
The Federal Competition and Consumer Protection Act (the ‘Act’ or FCCPA) is the principal legislation governing mergers and acquisition in Nigeria since its enactment in 2019. The Act has essentially established the framework for the regulation of competition and antitrust issues in Nigeria under the supervision of the Federal Competition and Consumer Protection Commission (the ‘Commission’ or FCCPC). The FCCPC, pursuant to the powers contained in the Act, has established rules and regulations for foreign mergers in Nigeria.
Released on Apr 6, 2023
Challenges, trends and opportunities for venture capital investment in Brazil in 2023
The ecosystem for the venture capital market in Brazil has reached a maturation level that offers investors a clear standpoint for the validation of their investment thesis, while providing several fundraising options for entrepreneurs. This article describes the current trends and features of venture capital transactions in Brazil in 2023 and beyond.
Released on Apr 3, 2023
The guarantees and precautions of sellers regarding the risk of default of the buyer's obligation to pay the purchase price in M&A transactions in the Brazilian context
Mergers and acquisitions (M&A) transactions are growing rapidly in Brazil and are becoming increasingly complex and detailed. This article aims to present some precautions and safeguards that sellers must take into account when negotiating the terms of share purchase agreements (SPA), regarding the risks of default of the buyer’s obligation to pay the purchase price.
Released on Apr 3, 2023
ESG’s impact on private equity and venture capital transactions
Globally, environmental, social and governance (ESG) considerations continue to have increasing relevance in mergers and acquisitions transactions for several reasons: the gradual and progressive changing of the investors’ mind set, the attention of the banking system towards focusing on sustainability ratings in addition to credit ratings, the integration of ESG factors into an initial public offering’s use of proceeds and, last but not least, the mandatory EU regulations that involve the private equity and venture capital sector.
Released on Apr 3, 2023
Yellow flag: is the due diligence procedure taking longer than before? If so, how can you be prepared for it?
Besides the fact that due diligence procedures have been one of the main steps in mergers and acquisitions (M&A) and investment transactions, the need for an extended timetable to complete the diligence has been noted. This article explores why this may happen and how companies can predict and navigate this trend.
Released on Apr 3, 2023
Virtual shares: still a ‘shadow’ among the classic stock options?
Virtual stock option plans are becoming more and more popular in the field of venture capital and employee incentivisation, especially with financed startups seeking to provide attractive financial resources for their employees without yielding control over the business. However, the recourse to such mechanisms is still tentative in Romania due to lack of appropriate regulation. Hence, a contractual implementation must be made using both bottom-up and top-down approaches.
Released on Apr 3, 2023
The legal framework surrounding SPACs in Pakistan
The primary purpose of a special purpose acquisition company (SPAC) is that of an investment vehicle with the intention of raising funds from the general public, which are utilised for the purpose of a merger or acquisition within a certain time period. This allows the private company to access the public markets and raise additional capital without going through the traditional initial public offering process. This article discusses the legal requirements to establish a SPAC and the criteria to be fulfilled with respect to the merger or acquisition (M&A) transaction undertaken by the SPAC following its establishment.
Released on Apr 3, 2023
A detailed look at Thailand’s takeover rules
The acquisition of securities listed on the Stock Exchange of Thailand for the purpose of business takeovers (ie, a tender offer) is mainly regulated by the Securities and Exchange Act B.E. 2535, as amended, and the Notification of the Capital Market Supervisory Board No ThorJor. 12/2554 Re: Rules, Conditions and Procedures for the Acquisition of Securities for Business Takeovers, as amended (the ‘Takeover Rules’). This article provides an overview of the Takeover Rules.
Released on Apr 3, 2023
The new initiative aimed at boosting the Chilean venture capital ecosystem
The Chilean Economic Development Agency has launched a new initiative called ‘Venture Capital Chile’ to attract international investors in Chilean private investment funds and venture capital managers, and to complement national investment, which is already increasing.
Released on Apr 3, 2023
Cross-border M&A transactions in Mexico
This article provides an overview of the due diligence aspects of mergers and acquisitions (M&A) and considers the warranties, representations and indemnities to be negotiated and agreed upon by parties to an M&A in Mexico.
Released on Apr 3, 2023
Forward funding
Forward funding is generally labelled as an Anglo-Saxon inspired financing model, predominantly used in real estate transactions (eg, residential, retail, hotels, offices), based on a contractual structure of some complexity. While still gaining popularity in the Portuguese market, there is an increasing trend towards implementation, by importing more mature legal products from neighbouring European jurisdictions. Forward funding has been seen as a useful tool to overcome a certain shortage in the Portuguese market of income-generating assets, given the growing appetite of institutional investors and pension funds.
Released on Apr 3, 2023
The coming year of the ‘great refresh’: a test of India’s boardroom diversity commitments
The year 2024 is colloquially referred to as the ‘board refresh year’ for India, because of the statutory director tenure provisions. This presents an opportunity for India Inc to ingrain diversity principles at the board level and achieve a real-time notch-up in corporate governance. In the past several years, there has been a notable trend of regulatory intervention to increase gender diversity in corporate boards globally, by either mandating gender quotas or setting out principles as a voluntary guideline for the appointment of at least one woman director to the board of directors.
Released on Apr 3, 2023
ESG in M&A
Given the ever-increasing focus on sustainability, businesses would be well advised to take environmental, social and governance (ESG) factors into account in today's M&A transactions.
Released on Apr 3, 2023