ROMANIA Law and Practice Contributed by: Luiza Ionescu, Andreea Paraschiv, Amanda Csaki and Cezara Mitea, Stratulat Albulescu Attorneys at Law
acceptance level or the inclusion of a material adverse change clause. 4.6 Deal Documentation In private M&A transactions in Romania, entering into a transaction agreement is common and standard practice, typically including customary representa- tions, warranties, and covenants. In contrast, in public takeover offers involving listed companies, such agreements are not customary. The process is governed by the takeover rules under Law No 24/2017 and the Financial Supervisory Authority (FSA) regulations, where the principal document is the offer documentation submitted to and approved by the FSA. The target’s ability to undertake binding obligations towards the bidder is therefore limited by the takeover regime. 4.7 Minimum Acceptance Conditions Minimum acceptance conditions are permitted only in voluntary takeover offers. They are typically designed to ensure that the bidder acquires a sufficient stake to exercise effective control or meaningful influence over the target after completion. The precise ownership thresholds that confer differ- ent levels of corporate control may vary depending on the company’s legal form and constitutional docu- ments. In practice, bidders align the minimum accept- ance condition with the level of ownership required to implement their post-acquisition strategy effectively. 4.8 Squeeze-Out Mechanisms Following a successful public takeover offer (either voluntary or mandatory), the bidder has the right to ini- tiate a squeeze-out procedure if it owns at least 95% of the total shares and voting rights, or has acquired through the offer at least 90% of the shares and voting rights that were the subject of the offer. The bidder must initiate this procedure within three months of the publication of the offer’s results. 4.9 Requirement to Have Certain Funds/ Financing to Launch a Takeover Offer When submitting the offer document to the FSA for approval, the bidder must demonstrate that it has suf-
ficient funds to finance the entire offer. This is typically evidenced by either: • an irrevocable bank guarantee covering 100% of the offer value; or • proof of a cash deposit representing at least 30% of the offer value, blocked in an account with the authorised intermediary. The bidder must submit the offer through a licensed investment firm acting as intermediary. 4.10 Types of Deal Protection Measures Romanian takeover rules allow for certain contrac- tual protections, but their use depends on the type of transaction. In public offers directed at a dispersed shareholder base, mechanisms such as break fees, matching rights, exclusivity clauses, or force-the-vote provisions are not expressly forbidden, yet they are generally viewed as incompatible with the public bid framework. By contrast, in privately negotiated deals, limited pro- tections can be agreed upon. These may include cost- reimbursement clauses or short exclusivity periods, typically suited only to bilateral, deal-specific arrange- ments rather than open tender offers. Force-the-vote provisions are not recognised under Romanian law, as the target board cannot approve or reject a bid. The board also cannot commit the com- pany or its shareholders to support an offer. 4.11 Additional Governance Rights If a bidder gains control (over 50%) but less than 100% and cannot (or chooses not to) execute a squeeze-out, it obtains the standard governance rights of a majority shareholder under the Companies Law, which include voting rights in the general meet- ing of shareholders, dividend and profit rights as per its shareholding quota, information rights or the right to request for a specific matter to be added to the agenda of the general meeting of shareholders. 4.12 Irrevocable Commitments In private Romanian company transactions, it is com- mon and standard practice for buyers to obtain irrev- ocable commitments from key shareholders. These
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