PORTUGAL Law and Practice Contributed by: Bernardo Abreu Mota, David Oliveira Festas and Francisco Albuquerque Reis, CS’Associados
The acquisition of a company may also be achieved through the subscription of a share capital increase with a view to holding a controlling stake in a com - pany; this has become particularly common for dis - tressed companies seeking new investors, resulting in the simultaneous dilution of the stakes held by pre-existing shareholders. The latter is also the case with the conversion of credits held by third parties into equity contributions, thus entailing the acquisi - tion by creditors of controlling stakes in distressed companies. Mergers are another suitable mechanism for the acqui - sition of companies, allowing for a target company to be merged into the absorbing company, against the acquisition of a stake in the absorbing company by the shareholders of the absorbed company. Listed Companies The acquisition of a controlling stake in a listed com - pany is normally implemented under the framework of a takeover offer (as further detailed in 4. Stakebuilding and 6. Structuring ). Business acquisitions may also take place in the form of asset deals, as opposed to share deals, although an asset deal structure is usually less straightforward from a continuity legal perspective. 2.2 Primary Regulators In transactions involving listed companies, the Portu - guese Securities Commission ( Comissão do Mercado de Valores Mobiliários – CMVM) is a key regulator, and is responsible for the issuance of several soft law reg - ulations that are relevant within a takeover scenario (eg, regulations on the contents of prospectuses and applicable takeover procedures). Depending on the business areas of the companies targeted by an M&A transaction, some sectoral regulators may also play an important role. For instance, M&A deals involving credit or financial institutions will be supervised by the Portuguese Cen - tral Bank ( Banco de Portugal ), whereas transactions involving insurance companies will be monitored by the Portuguese Insurance Regulator ( Autoridade de Supervisão de Seguros e Fundos de Pensões ). M&A activity in Portugal is also primarily regulated by the
European Commission or the Portuguese Competi - tion Authority ( Autoridade da Concorrência ), depend - ing on the applicable rules, in particular through the enforcement of the antitrust or merger control legal frameworks. However, regardless of their powers to oversee their relevant activity sectors, the intervention of the sec - toral regulators in any M&A transaction would not invalidate any input from the competent competition agency if the relevant deal were likely to create signifi - cant impediments to effective competition, nor would it affect the opinion of the Securities Commission if the transaction were to involve listed companies. 2.3 Restrictions on Foreign Investments As a general rule, in Portugal there are no restrictions on foreign investment, which is granted the same level of protection as domestic investment, so no specific registration or legal or regulatory protection measures apply. Other than in the sectors mentioned below, there are no particular limitations on foreign investment, although a number of restrictions and/or consent requirements may apply to both foreign and domestic investments in regulated areas. As a deviation from this general rule, the Safeguard of National Strategic Assets Regime (NSAR), adopted by Decree-Law No 138/2014 of 15 September, applies to acquisitions of control over the main infrastructure and assets pertaining to national defence and national security and/or the provision of essential services for the national interest in the areas of energy, transport and communications. Under the NSAR, the Portu - guese government may scrutinise (and oppose) a transaction entailing a direct or indirect acquisition of control over an asset that qualifies as strategic if the acquirer is an entity from a country outside the European Union and the European Economic Area, provided that it may seriously and sufficiently jeop - ardise national defence and security or the security of supply in services that are fundamental to the national interest. The NSAR sets out the procedural steps and deadlines that apply to the government’s assessment. To give the parties legal certainty regarding the non- application of the opposition regime, the acquirer may request a decision of non-opposition to the rel -
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