LUXEMBOURG Law and Practice Contributed by: Ana Nicoleta Andreiana, Christophe Boyer, Noémi Gémesi and Tom Hamen, Loyens & Loeff
legal certainty from a Luxembourg tax perspective or in case of unusual and complex situations. Such advance ruling request must be introduced before implementing the spin-off. Subject to the complexity of the case, one should expect the advance tax rul- ing process to take approximately 4–6 months. The advance ruling request is subject to an administrative fee set by the tax authorities and varying between EUR3,000 and EUR10,000 depending on the com- plexity and the amount of work involved. 4. Acquisitions of Public (Exchange- Listed) Energy and Infrastructure Companies 4.1 Stakebuilding In Luxembourg, it is common for a potential bidder to acquire a stake in a listed company prior to launching a public takeover bid, provided that such acquisitions comply with market abuse regulations and disclosure obligations. There is no prohibition on stakebuilding before an offer is announced. Under the Luxembourg transparency law of 11 January 2008 (“Transparency Law”) applicable to companies whose shares are listed on a regulated market (within the meaning of MiFID II) in the EEA, shareholders must notify both the issuer and the Commission de Surveil- lance du Secteur Financier (CSSF) when their holding reaches, exceeds, or falls below any of the following thresholds: 5%, 10%, 15%, 20%, 25%, 33⅓%, 50% or 66⅔% of voting rights. Notifications must be made within four trading days of the transaction. Additionally, any person who, alone or in concert, acquires more than 33⅓% of the voting rights in a company whose shares are listed on a regulated market in the EEA, is required to launch a mandatory takeover bid for all remaining shares under the Luxem- bourg takeover law of 19 May 2006 (“Takeover Law”). The offer document must be approved by the com- petent authority of the jurisdiction where the shares are listed and admitted to trading on the regulated market. Since Luxembourg companies hardly ever have their shares listed and admitted to trading in Lux- embourg, the offer document prepared in relation to
Luxembourg companies is typically approved outside of Luxembourg. If, however, an offer document were to be submitted to the CSSF and hence is subject to the Takeover Law, it would have to include the purpose of the bid, the bidder’s strategic intentions regarding the target (including its business, employees and locations), and details of the financing arrangements for the offer. Luxembourg does not impose a formal “put up or shut up” rule. However, the Takeover Law requires that an offeror does not unduly hinder the target’s operations, and the maximum period from the announcement of the bid to completion is six months. 4.2 Mandatory Offer Any person who, alone or in concert, acquires at least 33⅓% of the voting rights is required to launch a man- datory takeover bid for all remaining shares in accord- ance with the provisions of the Takeover Law. 4.3 Transaction Structures Public company acquisitions in Luxembourg are usu- ally structured as voluntary takeover bids under the Takeover Law. These can be cash, share-for-share, or mixed offers. Statutory mergers (including cross-border mergers) are legally available under the Company Law but are rarely used for listed companies due to procedural complexity and timing constraints. Other complex or hybrid structures, such as multi-step transactions combining stakebuilding, a public offer, and post-offer reorganisations, may be used depend- ing on the target’s profile and the bidder’s objectives. 4.4 Consideration and Minimum Price Public company acquisitions in Luxembourg are typically structured as cash deals or share-for-share transactions (the latter being more common in strate- gic or cross-border combinations). Cash considera- tion is permissible in both mergers and tender offers, though it is more common in the latter and cannot represent the entire consideration in a merger.
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