SENEGAL Law and Practice Contributed by: Khaled Abou El Houda, Malick Lo, Chadi Safieddine and Mohamed Kamil, SCP Houda & Associés
5.2 Market Practice on Timing General Market Practice
major contracts, securities and the history of ongo - ing or potential litigation. This risk mapping allows for the adjustment of warranty clauses and the definition of the conditions precedent necessary to secure the transaction. Contracts and Commercial Relationships The due diligence typically covers the company’s material contracts, including customer and supplier agreements, financing arrangements, and strategic partnerships. The aim is to assess change-of-control clauses, termination risks, and potential liabilities. 5.4 Standstills or Exclusivity In Senegal, exclusivity arrangements are commonly requested, while standstill commitments are less fre - quent and depend on the structure of the transaction. Exclusivity Exclusivity clauses are widely used in negotiated business combinations, particularly in private M&A transactions. They are typically agreed at an early stage, often in a letter of intent or memorandum of understanding, and aim to secure the buyer’s posi - tion during the due diligence and negotiation phases. Exclusivity generally prevents the seller from soliciting or negotiating with competing bidders for a defined period. In practice, these clauses are contractually enforceable under OHADA law, provided they are limited in time and scope and do not amount to an unlawful restriction of competition. Standstill Standstill commitments are less common in Senegal, and are mainly encountered in public or semi-public transactions. In private transactions, sellers tend to rely more on confidentiality and exclusivity rather than standstill undertakings. 5.5 Definitive Agreements Takeover Bid Agreements Permissibility and framework It is permissible for the terms and conditions of a takeover bid to be set out in a definitive agreement (often referred to as a Merger Agreement or Transac - tion Agreement) between the offeror and the target company. Senegalese law, under the OHADA Uniform Act on Commercial Companies (AUSCGIE), does not
In practice, the timing of disclosure is primarily driven by the parties’ desire for confidentiality rather than by strict legal mandates. Most private M&A transactions in Senegal remain strictly confidential until the defini - tive agreements are signed or even until the closing is finalised. This approach allows the parties to conduct due diligence and negotiate key terms without alert - ing competitors, employees, or the broader market prematurely. As for listed companies, they are required The due diligence process in mergers and acquisi - tions in Senegal is generally exhaustive, and covers all of the target’s operational and legal risks. Inves - tors favour a full-scope approach in order to identify any latent liabilities that could affect the valuation or viability of the transaction. Corporate and Governance Matters Due diligence usually starts with a review of corporate law compliance. This includes verification of the com - pany’s incorporation documents, articles of associa - tion, and corporate registers, as well as compliance with statutory formalities under OHADA law. Particu - lar attention is paid to decision-making processes to ensure that past and current corporate actions were properly authorised, so as to avoid any risk of nullity. Registrations of securities, pledges, or privileges at the RCCM are also carefully reviewed. Tax And Customs Audits to comply with legal requirements. 5.3 Scope of Due Diligence Verification of tax and customs compliance is one of the central pillars of the audit due to the discretionary and rigorous nature of the local administration. Labour Law and Social Liabilities The social audit is an essential step in assessing the company’s personnel-related commitments and the stability of its social climate. Regulatory Compliance and Litigation The regulatory component focuses on the validity of operating licences and compliance with local content rules, particularly in strategic sectors such as energy. The audit also includes a comprehensive review of
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