CYPRUS Law and Practice Contributed by: Kyriacos Scordis, Anna Borovska and Constantinos Kazamias, Scordis, Papapetrou & Co LLC
2. Overview of Regulatory Field 2.1 Acquiring a Company
(the “Mobility Directive”) (amending Directive (EU) 2017/1132 as regards cross-border conversions, mergers and divisions). The aforementioned amendment implementing revi - sions to the current rules regarding cross-border mergers has also introduced a set of regulations and procedures concerning cross-border conversions and divisions of companies in the European Union. The aim of the Mobility Directive is to standardise the processes for cross-border company reorganisations, thereby enhancing legal certainty and ensuring the protection of shareholders, creditors and employees involved in these transactions. Schemes of Arrangement The Companies Law also provides for court-sanc - tioned schemes of arrangement, thus allowing for a company and its creditors to reach a compromise and/or arrangement which will be binding on all credi - tors and even on the liquidator should a liquidation procedure ensue. In recent years, there has been a rise in cross-border mergers, allowing for: • a merger by acquisition where one or more compa - nies registered in an EU member state are acquired by another company registered in another EU member state, with the acquired companies trans - ferring their assets and liabilities to the company acquiring them and then being dissolved without going into liquidation; • a merger by a newly incorporated company where the acquired companies transfer their assets and liabilities to such newly incorporated company in exchange for new shares in such companies and eventually being dissolved without going into liqui - dation; and • absorption of a subsidiary by its parent company. Other Laws Other relevant laws regulating M&A transactions in Cyprus, aside from the aforementioned, are: • the Cyprus Securities and Stock Exchange Law (14 (I)/1993), as amended (the “Cyprus Securities and
A company may be acquired in a variety of manners: • by the purchase of a company’s shares from an existing shareholder via a share sale and purchase agreement; • by way of subscription to a new share issue (whether private or public); • a restructuring (such as a merger); or • court-sanctioned schemes of arrangement. Acquisitions It is fairly common for a company to be acquired through the acquisition of its business and/or assets. The key legislation that governs mergers and restruc - turing of private and public companies is the Com - panies Law Cap 113 as amended (the “Companies Law”), regulating, inter alia: • transfers of assets and exchange of shares in two or more companies that intend to merge together; • mergers of public companies in accordance with EU practices; and • cross-border mergers between Cyprus companies and companies incorporated in other member states of the European Union. In the case of public listed companies, acquisition takes place by way of a takeover via a public offer. If the public company is not listed, its shares may be acquired without making a public offer. • mergers; • divisions; • partial divisions; The acquisition of public companies is regulated by the Cyprus Stock Exchange under the Public Takeover Bids for the Acquisition of Securities of Companies and Related Matters Law 41 (I)2007 as amended (the
“Takeover Bids Law”). Cross-Border M&As
The Companies Law also regulates cross-border mergers and acquisitions by way of the Compa - nies Law (Amending Law) (No 3) of 2024 (Law 26 (I)/2024), which transposed Directive (EU) 2019/2121
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