PORTUGAL Law and Practice Contributed by: Bernardo Abreu Mota, David Oliveira Festas and Francisco Albuquerque Reis, CS’Associados
5.4 Standstills or Exclusivity Standstill provisions are not common in the context of negotiating possible business combinations, although they have been used in some more sophisticated M&A deals. In any event, these clauses are generally per - mitted under Portuguese law and, although there is no maximum permitted duration, according to the general principles of civil law, any “standstill period” that is unreasonably long could be deemed abusive and ultimately be reduced by a judicial decision at the request of any concerned party. Exclusivity provisions are more common and are usu - ally demanded for reasonable periods of time (nor - mally from 60 to 120 days, although there is no stand - ard rule on duration), particularly in transactions with several interested investors where one bidder seeks an exclusive negotiation period (in most instances combined with ongoing due diligence procedures). In deals involving listed companies, due care should be placed on preliminary commitments such as stand - stills or exclusivity, in order to establish in advance that they will not cause the parties to be considered as acting in concert, thus possibly precipitating an aggregation of voting rights, which may be especially sensitive in cases where any relevant thresholds may be involved, particularly for the launch of a manda - tory offer. 5.5 Definitive Agreements Business proposals are commonly presented as non- binding or binding offers, depending on the status and progression of preliminary negotiations and due dili - gence efforts. Typically, binding offers set out the main terms and conditions under which the offering party would be willing to complete the envisaged transac - tion, or make completion thereof conditional on the satisfactory negotiation of a definitive agreement con - taining clauses that are usual in similar transactions, including representations and warranties, compensa - tion and indemnity mechanisms or even conditions precedent to be met (the most common of which are antitrust clearance or the granting of any authorisa - tions required to avoid triggering change of control provisions).
Although permissible, it is not common for tender offers to be documented in a definitive agreement to be accepted by the counterparty, although the prac - tice of requesting mark-ups of transaction documents from bidders is often used in private disposal competi - tive processes conducted by the seller. 6. Structuring 6.1 Length of Process for Acquisition/Sale There is no standard timeframe generally applicable to the sale or acquisition of a business in Portugal, as the duration of any M&A deal will depend on a number of factors. As a general rule, the timing for the completion of M&A transactions will naturally be impacted by the number of regulators that are required to authorise or intervene with respect to a transaction; considering the different sectoral regulators and applicable legal provisions, a specific timeframe can therefore only be assessed on a case-by-case basis. Furthermore, transactions will be subject to merg - er control proceedings with the EU Commission or the Portuguese Competition Authority ( Autoridade da Concorrência ) if the relevant legal thresholds are triggered, and cannot be implemented before a non- opposition decision is received. When the Portuguese Competition Authority is competent to assess the con - centration, it has 30 working days after the notification of the concentration was formally submitted to issue a decision or to initiate an in-depth investigation, which should be completed within 90 working days from said notification. The timeframe may be suspended for different reasons, notably for formal requests for information and the discussion of remedies. Regulatory considerations aside, the structuring of an M&A deal targeting a non-listed company can be implemented in a relatively short period of time (from 30 to 90 days), depending on the evolution of the underlying negotiations and the willingness of the parties to reach a swift understanding on key transac - tion issues. This timing will also be determined by the option to dismiss any due diligence exercise or to con - duct a high-level or in-depth due diligence, and by the
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