SWITZERLAND Law and Practice Contributed by: Nicolas Wehrli and Melanie Wilhelm, Loyens & Loeff
of incorporation, entry in the shareholders’ register and/or control over the board. Where a bidder is subject to a mandatory offer (see 4.2 Mandatory Offer ), offer conditions are limited to regulatory approvals and registration as a shareholder in the share register. 4.6 Deal Documentation In Switzerland, it is common for a bidder and the tar- get company to enter into a transaction agreement during a takeover, typically with the support of the target’s board. These agreements outline co-opera- tion on information sharing, publication of financials, and notification of events that may affect deal com- pletion. They often include non-solicitation clauses, obligations to inform the bidder of competing offers, joint communications, fairness opinions, and efforts to meet offer conditions and solicit shareholder support. Additional provisions may cover post-deal govern- ance, such as convening shareholder meetings to elect new board members, registering the bidder in the share register, and maintaining business continu- ity. Break fees may apply if key covenants or condi- tions are breached. Representations and warranties are usually limited to fundamental matters like incor- poration, share validity, and compliance. For mergers, a formal merger agreement is required under the Swiss Merger Act, which prescribes mini- mum content. Unlike takeovers, target companies in mergers typically do not provide representations and warranties. 4.7 Minimum Acceptance Conditions In Switzerland, it is common for voluntary public ten- der offers to include minimum acceptance conditions, requiring the bidder to acquire a specified percentage of the target’s shares. A threshold of 66⅔% is gener- ally accepted by the Swiss Takeover Board, though there is no fixed control threshold. Conditions must not be unreasonably high and are assessed case by case. Thresholds of 50% are considered reasonable for par- tial offers, while 66⅔% or less is typically acceptable. Higher thresholds, such as 90%, are only justified in
specific scenarios, such as holding offers. A 66⅔% stake allows control over key corporate decisions under Swiss law, unless the company’s articles of incorporation set different voting requirements. The notification duty is triggered upon the binding acquisition agreement, not by mere intent. It applies to direct purchases, co-ordinated transactions, con- versions, and capital changes. Beneficial owners must be disclosed, including group members acting in con- cert, though the bidder’s strategic intent need not be revealed. 4.8 Squeeze-Out Mechanisms If a bidder does not achieve a shareholding of 100% after a public tender offer, it may squeeze out the remaining minority shareholders. The squeeze-out mechanism depends on the ownership threshold. If the bidder holds more than 98% of the voting rights, the squeeze-out can be effected through court pro- ceedings. The bidder must file a respective squeeze- out request within three months after the end of the additional offer period. The shares of the minority shareholders will be cancelled by court order, with compensation payable by the bidder, and re-issued to the bidder. Subsequently, the board of directors of the target company may request the delisting of the com- pany’s shares. Often, the delisting process is already initiated in parallel to the squeeze-out procedure. If the bidder holds more than 90% but less than 98%, the squeeze-out can be effected through a statutory squeeze-out merger. In this case, the bidder (or one of its affiliates) is merged with the target company. This requires the merging parties to enter into a merger agreement, approval by the general meeting of share- holders of both companies, a report by the board of the merging companies outlining the reasons for the merger, a report by a Swiss qualified auditor review- ing the merger documentation, and a filing with the commercial registers where the two companies are registered. Following registration of the merger, the transferring company will be deleted from the com- mercial register, and the minority shareholders will receive a cash compensation. The adequacy of the compensation can be challenged within two months
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