Global Acquisition Finance Guide

570 Pages·2017·3.1 MB·English

Global Acquisition
Finance Guide

Global Acquisition
Finance Guide

Global Acquisition Finance Guide

Table of Contents
Introduction .......................................................................................... 1
Argentina .............................................................................................. 3
Australia ............................................................................................. 21
Austria ................................................................................................ 45
Belgium .............................................................................................. 61
Brazil .................................................................................................. 73
Canada ................................................................................................ 86
Chile ................................................................................................... 97
China ................................................................................................ 110
Colombia .......................................................................................... 130
Czech Republic ................................................................................. 145
France ............................................................................................... 163
Germany ........................................................................................... 179
Hong Kong ....................................................................................... 198
Hungary ............................................................................................ 219
Indonesia .......................................................................................... 230
Italy ................................................................................................... 239
Japan ................................................................................................. 248
Luxembourg ..................................................................................... 261
Malaysia ........................................................................................... 275
Mexico .............................................................................................. 291
Netherlands ....................................................................................... 306
Peru ................................................................................................... 332
Philippines ........................................................................................ 340
Poland ............................................................................................... 358
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Saudi Arabia ..................................................................................... 376
Singapore .......................................................................................... 387
South Africa ..................................................................................... 408
Spain ................................................................................................. 419
Sweden ............................................................................................. 438
Switzerland ....................................................................................... 455
Taiwan .............................................................................................. 464
Thailand ............................................................................................ 476
Turkey .............................................................................................. 491
United Kingdom ............................................................................... 501
United States of America .................................................................. 516
Venezuela ......................................................................................... 529
Vietnam ............................................................................................ 545

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Global Acquisition Finance Guide

Introduction
Volatility in today’s global financial markets is the new normal. n
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Despite the global unpredictability, there have been strong levels of cti
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resilience in the past few years. Looking forward, both emerging and d
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developed markets are proving to be robust economies, attractive for ntr
both inbound and outbound investment. I
Our new 2015 Global Acquisition Finance Guide is a comprehensive
guide for market participants and we hope to provide investors with a
summary of regulations applicable to acquisition finance transactions
around the world.
Spanning 36 jurisdictions, the guide brings together the collective
knowledge and experience of more than 670 banking and finance
lawyers in Baker McKenzie’s global network. It looks at the ever-
changing needs of our clients in this advanced and fast-paced world.
Contact details for each country can be found at the end of the
relevant chapter.
We hope you find the Global Acquisition Finance Guide useful.

Gavin Raftery
Global Acquisition Finance Chair
Baker McKenzie

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Global Acquisition Finance Guide

Argentina
1. Is there any prohibition on a company incorporated in a
n
Argentina providing financial assistance in connection nti
with the acquisition of shares in itself or its parent e
g
r
company (either direct or ultimate)? A
Target company may acquire shares on certain terms and
conditions
There is no express prohibition on a company incorporated in
Argentina providing financial assistance in connection with the
acquisition of shares in itself or its parent company. Under Argentine
law, however, a target company may only acquire its own shares:
(a) to cancel them, if there has been a prior decision to reduce the
company’s capital;
(b) exceptionally, with liquidated profits or free reserves if the shares
are entirely paid-up, and to avoid serious damage, which must be
justified at the next shareholders’ meeting; or
(c) if those shares are part of a bulk transfer (fondo de comercio)
acquisition by a third party company and/or part of a company
that is merged into the acquiring company.
Court challenges
Notwithstanding the fact that buyouts involving the giving of financial
assistance have occurred in Argentina, some of these have been
challenged in court, with allegations of fraud by the creditors of the
target company. The challenges to this type of transaction arise on the
insolvency of the acquired company. The allegations are based on the
ground that buyouts involving financial assistance transfer the
financing of the transaction to the company, exposing its assets (which
are usually encumbered in favor of the creditors that have financed the
buyout) and prejudicing the company’s other creditors and third
parties.
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In certain transactions involving financial assistance, courts have ruled
that those buyouts violate the following provisions of the Argentine
Commercial Companies Law (ACC):
(a) the administrator’s duties of loyalty and care;
(b) the restriction on companies giving financial assistance in
connection with the acquisition of their own shares;
(c) the use of the corporate structure for non-corporate purposes;
(d) the administrator’s improper use of his/her position or company
information for his/her self-gain (personal benefit); and
(e) the administrator’s duty of refraining from participating in a
discussion in relation to a particular matter, if there is a conflict of
interest with the company.
Administrator refers to directors of corporations (sociedades
anónimas) and managers of limited liability companies (sociedades de
responsabilidad limitada).
Duties of directors and managers
As long as managers or directors remain employed by the target
company, they must maintain their duties of loyalty and care to the
company. Argentine law adopts the “good businessman” standard,
which imposes obligations on managers and directors, including to act
in good faith and to abstain from improperly using their position or
company information for their self-gain (personal benefit).
Administrators who find themselves with a conflict of interest with the
company must inform other members of the board of directors, and
refrain from participating in any discussion in relation to the subject of
the conflict.
Moreover, administrators have joint and several liabilities for damages
suffered by the company, its shareholders or third parties as a result of
their disloyal and unfaithful performance (violation of the “good
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