lexisnexisip.com

Publications for Corporate and M&A Law Committee

  • Subject
  • Year
ESG in M&A: practical comments from the Polish perspective and an invitation to consider further

There’s still relatively little discussion about ESG in the context of mergers and acquisitions (M&A). Should there be a place for ESG in something as profit driven as an M&A transaction? Are there any junctions between ESG and M&A, and if so, should they influence transactional processes from both the buyer’s and seller’s perspective?

Released on May 20, 2024

Austrian foreign direct investment regulations continue to impact cross-border M&A deals

On 10 April 2024, the Austrian Foreign Direct Investment (FDI) authority submitted a report to the Austrian parliament indicating, among other findings, that: (1) the number of FDI filings has substantially increased, (2) that the Austrian FDI authority takes an active role in this regard (including requesting the submission of FDI filings), and (3) the authority carefully reviews cases (often Phase 2 proceedings). This article assesses FDI regulations in Austria in this context.

Released on May 20, 2024

Directive (EU) 2019/2121 on cross-border conversions, mergers and divisions: changes to Portuguese legislation

In December 2023, Portugal adopted and transposed the provisions of Directive (EU) 2019/2121 regarding cross-border conversions, mergers and divisions into Portuguese law. This article highlights such changes and possible difficulties in regard to its applicability.

Released on May 20, 2024

Innovation drive: Chile’s leap forward in regard to the country’s venture capital dynamics

This article provides an examination of Chile’s recent initiatives and their potential impact on the venture capital industry.

Released on May 14, 2024

Navigating economic challenges: the rise of acquisitions as a strategic option for Pakistani startups

Amidst the economic slowdown, Pakistani startups are dealing with capital raising and are looking towards acquisitions as a way to cash in.

Released on May 14, 2024

Foreign direct investment: the legal framework in Poland

The new foreign direct investment regime, introduced in Poland in 2020, established a foreign investment screening mechanism enforced by the Polish Competition Authority (PCA). The new foreign direct investment regime, which supplements the investment control regime regulated by the Polish Act on the Control of Certain Investments dated 24 July 2015 (‘the Polish FDI Act’) and enforced by the relevant ministries, involves a limited number of strategic entities and is applicable regardless of the investor’s ‘nationality’. The new regime was introduced in response to the Covid-19 outbreak, for an initial period of two years. However, in mid-2022 the Polish parliament decided to extend this new regime for a further three years, ie, until July 2025.

Released on May 14, 2024

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