Earn-outs are likely to be used more often in European M&A during the post-Covid 19 recovery period. This can lead to disputes. Here, the authors suggest ways in which detailed and unambiguous drafting of earn-out clauses could mitigate disputes.
This article aims to provide readers an overview of, and update on, the foreign direct investment screening mechanisms introduced by the Indian government in April 2020 vis-à-vis foreign direct investments from India’s bordering nations, as a reaction to the ongoing geopolitical tensions between India and China at the Indo-China border.
In Italy, the Business Judgment Rule (BJR) is a legal principle that implies the presumption that, in making business decisions, company directors act on an informed basis, in good faith and in the honest belief that the action was in the best interest of the company. In a judgment on 9 September 2020, the Court of Rome addressed the issue of the applicability of the BJR to choices relating to the company’s organisational structure in light of Article 2086 of the Italian Civil Code.
Sustainability has become a ubiquitous issue in today's society. Legal advisers, and especially M&A counsel, should be aware of the implications that this development has on their day-to-day work. In this article, we take a brief look at ESG due diligence: the evaluation of the environmental, social and governance aspects of a potential target company in an M&A transaction.
On 28 April 2021, a set of amendments to the Belarusian law ‘On Commercial Companies’ entered into force and introduced a significant number of changes concerning various aspects of corporate law. Some of the most notable changes are additional net assets maintenance requirements and explicit regulation of debt-equity conversions.
Looking back at 2020, the recovery of the Portuguese M&A sector was almost immediate each time there was an opening of the economy. In this article, the authors optimistically anticipate that 2021 will be better for Portuguese and worldwide economies – and the M&A sector in particular – when compared to 2020 but the difficulties that surfaced in 2020 will remain, even if with a more limited impact.
One of the many lessons of 2020 will be that a sustainable and inclusive economy – that promotes positive, long-term economic, environmental and social outcomes – requires cooperation, engagement and innovation from all stakeholders. Legal advisers have an important role to play in this economic transition by supporting business decision making to consider longer-term time horizons and the spectrum of environment, social and governance (ESG) issues holistically.
The Covid-19 pandemic and its economic impact have created issues around the world concerning the enforceability of merger agreements and how basic provisions operate. The high-profile LVMH/Tiffany dispute is one well-known example of a transaction that has encountered this sort of issue. However, there are many others in just about every major jurisdiction.
Portugal is a small open economy that is very dependent on foreign direct investment (FDI). Pursuant to the EY European Investment Monitor 2020, FDI projects in Portugal more than tripled between 2015 and 2019. Portugal also achieved a record-breaking number of 158 FDI projects in 2019.
Edie Hofmeister, Vice-Chair of the IBA’s Business Human Rights Committee and former EVP General Counsel of Tahoe Resources, provides a cautionary tale on why corporate counsel must lead their multinational clients to measure and manage community impacts early and often.
The US Committee on Foreign Investment in the United States (CFIUS) has adopted significant changes in the scope of review of investment in US businesses by non-US persons. These new regulations, which went into effect in February 2020, go well beyond CFIUS’ historical role in reviewing investments of control transactions directly involving national security implications.
Considering the economic impact of the Covid-19 pandemic in Argentina, several parliament members, belonging to diverse party blocs, have presented different bills in order to facilitate successful debt restructuring. These Extrajudicial Preventive Agreements (‘APE’), as a restructuring tool, will acquire enormous importance in the coming months. The main proposed amendment is the elimination of the double majority for the approval of the APE, and the reduction of the majority required regarding liability.
The purpose of this article is to emphasise the obstacles that Brazilian case law and scholars’ opinions have created in holding officers and directors liable for losses they have caused to their companies.
While the Covid-19 pandemic, coupled with the country's underlying hurdles in the labour field, bring massive challenges to Brazil’s recent economic recovery, it may also carry countless M&A opportunities regarding important education, technology, insurance and agribusiness assets, to be driven by favourable exchange rate variation and greater legal certainty arising from the introduction of relevant legislative reforms.
In India, while sanctioning mergers and acquisitions, it is open to the National Company Law Tribunal to modify an ‘appointed date’ and prescribe such date from which the merger takes effect as it thinks appropriate based on the facts and circumstances of the case. The Apex Court of India had stated that, the company court may, while sanctioning a merger, ‘modify the Appointed Date stated therein, depending on the specific facts and circumstances’.
Not only has there been a slowdown of M&A deals around the world and in Colombia due to the Covid-19 pandemic, but the uncertainty around the future of many businesses will give rise to new discussions in the negotiation field. This article analyses some effects in the mid and long term that may apply in M&A transactions, in which uncertainty is the new normal.
Note from the Editors Corporate M&A Committee July 2020. André Dufour and Guy Harles
This article focuses on the potential effects of the Covid-19 pandemic on M&A transactions. The effects on several phases or instruments such as due diligence, material adverse effect clauses, price Adjustments and earn outs are discussed.
The article highlights the main innovations introduced by Law Decree of 8 April 2020 on the 'golden power' rules in Italy, with regard to the obligation to notify certain M&A transactions/resolutions even if agreed by an EU investor.
Due to Covid-19, a large number of companies have been unable to hold their shareholders' meeting. In Peru, the government has issued regulations in order to help companies hold their meetings, under the supervision of the Peruvian Superintendecy of Capital Markets. However, there is a legal void regarding companies that are not under this supervision and are still unable to hold their shareholders' meeting.
As the price of shares and other types of securities declines and the uncertainty in financial markets in Mexico continues, Mexican issuers are experiencing a decrease in their market capitalisation compared to their book value, which lays the ground for hostile takeovers of public companies. Additionally, the continued depreciation of the Mexican peso against the US dollar is making foreign investors review investment opportunities in Mexico.
The US Securities and Exchange Commission announced on 4 March 2020 that it has voted to propose a set of amendments that would clarify and harmonise integration concepts for several forms of exempt offerings. One amendment proposes to shorten the safe harbor in Regulation D to 30 days, which will provide more flexibility for small business and real estate securities offerings. This article summarises the integration of sequential Rule 506(b) and Rule 506(c) offerings.
By V. Resat Moral, Karaca Kacar, Nur Duygu Bozkurt and Burak Bati. Limitations on distribution of profits due to Covid-19 - Corporate and M&A Law Committee newsletter article, July 2020
The German government has accelerated its plans to amend the existing foreign investment control regime and to broaden its powers to review and restrict foreign direct investment by non-EU investors in Germany. In particular, companies active in certain health sectors were added to a list of strategically important business sectors.
The outbreak of the Covid-19 pandemic has accelerated the global trend towards increased national protectionism and stricter screening of foreign direct investments. As part of this general approach taken by European countries, on 17 March 2020 Spain enacted a Royal Decree-law that, among other things, introduced a new screening mechanism for certain investments made by non-EU and non-EFTA residents, for public order, public health and public security reasons.
This article examines the impact of Covid-19 on Chilean M&A transactions. It provides a synopsis of the current foreign investment environment and how the Chilean M&A sector has reacted to the pandemic. Further, it describes the impact of Covid-19 on ongoing M&A transactions and how the virus is shaping future M&A agreements in Chile.
By Nathalie van Woerkom. Private equity investing for a more sustainable future in the Covid-19 recovery phase - Corporate and M&A Law, July 2020
By Iqbal Khan and Ambarish Amarchand. Corporate governance in the ‘new normal’, post-lockdown India - Corporate and M&A Law Committee newsletter article, July 2020
By Maurizio Vasciminni, Giada Russo and Giovanni Gigliotti. Corporate liabilities under Italian law: risks and remedies for foreign companies operating in Italy - Corporate and M&A Law
By Vishnu Nair and Rangam Sharma. Covid-19 and acquisition transactions: impact on warranties and disclosures - Corporate and M&A Law Committee, July 2020.