SERBIA Law and Practice Contributed by: Nataša Lalović Marić, Jovan Mićović and Stefan Šilobad, Law Office Miroslav Stojanović in cooperation with Wolf Theiss
5.3 Scope of Due Diligence The scope of due diligence depends on the type of transaction and the nature of the business conducted by the target. In large M&A transactions, it is advisable for each investor to conduct at least financial, operational, legal and tax due diligence. Following the COVID-19 pandemic, inquiries on state aid received and compli - ance with the state aid regime by the relevant targets became regular items in due diligence checklists. 5.4 Standstills or Exclusivity It is common for the parties to include exclusiv - ity clauses in regular M&A transaction documents. Standstill arrangements to prevent takeovers are not standard, and the permissibility of such and other agreements aimed at conducting a takeover is very limited. In takeover processes, bidders and persons acting in concert with bidders are prohibited from acquiring or disposing and agreeing to acquire or dispose of shares of target companies outside of takeover processes, from the moment the obligation to launch takeover bids has arisen until the lapse of the bids’ duration. 5.5 Definitive Agreements Tender offers may be documented in definitive agree - ments, and often are. However, these agreements cannot replace the offer, which must contain details on: • the target; • the bidder, the persons acting in concert with the bidder, and such acting in concert; • the type and number of shares the bidder intends and is obliged to acquire, including the number of votes; • the price per share, as well as the terms and condi - tions of payment; • the sources and manner of provision of funds for the purchase of shares; • the investment company acting for the bidder; • the takeover bid’s validity period; • instructions on the manner in which the shares should be deposited, as well as other rights and liabilities of shareholders who deposit shares, including the right to cancel their prior acceptance
of the takeover bid by withdrawing the shares from the depository facility; • the bidder’s objectives and intentions regarding the target company; and • other information that may be required under the Takeover Law or the SEC’s regulations. The offer must also include a clear statement that the bid is submitted to all shareholders who hold vot- ing shares in the target company and that the bidder undertakes to buy each voting share tendered, pursu - ant to the stipulated and published conditions. 6. Structuring 6.1 Length of Process for Acquisition/Sale The length of the process of acquiring/selling a busi - ness in Serbia depends mainly on: • the target company’s size; • the industry; • the complexity of shareholders’ relationships; On average, most transactions may be closed within a six-month period but this average period may differ, depending on the complexity of the process. Acquisitions via takeovers are regulated in detail in the law. The minimum takeover bid duration is 21 days, while the maximum is set at 45 days, although the latter period can be extended due to changes in the takeover bid or as a result of a counter-takeover bid. In case of changes to the takeover bid, the takeover bid’s duration is extended by seven days, but the maximum bid duration period may not be longer than 60 days. If there are counter-takeover bids, the total period for both the original and the subsequent counter-takeover bids cannot exceed 70 days from the day on which the initial short-form takeover bid was published. Competition clearance in Serbia is issued within one month from the date of submission of a complete merger filing to the CPC. The CPC may issue one or • the transaction structure; • regulatory requirements; • the complexity of negotiations; and • other transaction specifics.
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