ANDORRA Law and Practice Contributed by: Marc Ambrós and David Cuesta, Cases & Lacambra
5.4 Standstills or Exclusivity Standstills are not usually demanded in Andorra. On the other hand, exclusivity is usually required, since most Andorran companies are family controlled. 5.5 Definitive Agreements It is permissible for tender offer terms and conditions to be documented in a definitive agreement. The ten - der offer usually contains the main terms and condi - tions of the transaction, and therefore it is document - ed in the definitive agreement, along with other terms and conditions that may arise from the due diligence process. 6. Structuring 6.1 Length of Process for Acquisition/Sale The duration of the process for acquiring/selling a business in Andorra depends on several factors, such as the scope of the due diligence process or the need to obtain financing. The duration of the process also depends on the timing of the authorisation by the gov - ernment of Andorra for foreign investments and/or the AFA, as the case may be. Based on the above, the process for acquiring/selling a business in Andorra generally takes from four to 12 months. 6.2 Mandatory Offer Threshold Andorra does not have a mandatory offer threshold. 6.3 Consideration Cash is more commonly used as consideration in Andorra. In deals with high-valuation uncertainty, it is usual to fix an initial price upon signing and to adjust such fixed price upon closing using the completion accounts mechanism. 6.4 Common Conditions for a Takeover Offer As Andorran companies are all private, the offer condi - tions are usually negotiated directly between the par - ties involved in the transaction, before such terms and conditions are reflected in the SPA. The most common conditions included in transac - tions in Andorra are conditions related to government
Under Andorran regulations, there is no obligation for a target company to disclose a deal. However, in the financial sector, the decision to acquire or sell a qualified stake in a financial entity must be disclosed to the AFA by the potential acquirer, the seller and by the financial entity as soon as it becomes aware of that decision. Therefore, when negotiations commence, this must be disclosed to the financial authority. Notwithstanding the initial disclosure of the acquisi - tion of a qualified stake in a financial entity, it is also subject to prior authorisation by the AFA. On the other hand, in mergers, the resolutions adopt - ed by the shareholders’ meetings of the companies involved need to be published in two newspapers so that creditors of the companies involved can oppose the merger, and the resolutions are only effective after one month has elapsed from the date of publication of the resolutions. The due diligence process is not specifically regulated in Andorra. However, it is common to conduct a due diligence process prior to the acquisition of an Andor - ran target company. The scope of due diligence usu - ally covers all the legal aspects applicable to the target company, such as the following: • corporate; • tax; • intellectual property; • litigation; • real estate; • financing; • permits; 5.2 Market Practice on Timing This is not applicable in Andorra. 5.3 Scope of Due Diligence
• regulatory compliance; and • personal data protection.
The scope of due diligence may differ depending on the business, sector or assets owned by the target company.
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