ARGENTINA Law and Practice Contributed by: Agustin Ferrari, Hernán Alal and Astrid Nottebohm, Naveira, Truffat, Martínez, Ferrari & Mallo Abogados
5. Negotiation Phase 5.1 Requirement to Disclose a Deal Non-Publicly Listed Companies
ers key aspects such as assets, charges and liens, material contracts, employment matters, shareholder agreements and rights, ongoing or potential litigation, intellectual property, licences and permits, company structure, tax filings, and other relevant business mat - ters. Whenever possible, information provided by the seller is cross-checked against public registers and other publicly available sources to ensure accuracy. Although, some years ago, the market tended to request full due diligence reports, the trend has changed in recent years and red-flag due diligence reports are now usually sought due to the need to cut down on time and costs of the process. Notwithstanding the peculiarities of each industry, in Argentina, the analysis of labour, litigation, contractu - al, corporate, anti-corruption and regulatory risks are essential to any type of due diligence report. In recent years, environmental risk has seen a more detailed and in-depth analysis. 5.4 Standstills or Exclusivity Exclusivity agreements on “no-shop” clauses are fre - quently demanded by buyers and typically included in confidentiality agreements and letters of intent at a very early stage in an acquisition process to give potential buyers time to conduct due diligence and negotiate definitive agreements with the sellers with - out any competition from other potential buyers. Standstill agreements, on the other hand, are less fre - quent in the domestic M&A market, since acquisition of public companies is very modest due to scarce for - eign direct investment in Argentina. Standstill agree - ments typically seek to prevent pressure from activ - ist investors or aggressive bidders pursuing hostile takeovers by preventing such actors/potential buy - ers from accumulating shares in the target, or voting such shares in specific manners, for a period of time extending even after the deal has failed (to block vul - nerabilities raised during due diligence). 5.5 Definitive Agreements Tender-offer terms and conditions for shares in com - panies subject to the public offer regime must be set down in a prospectus. The prospectus must include all documentation required by applicable regulations
For non-publicly listed companies, transactions must be disclosed once definitive agreements are signed. Regulatory approvals from bodies such as the Argen - tine Antitrust Commission (AAC), the Argentine Cen - tral Bank (BCRA), or the National Communications Entity (ENACOM) are obtained after closing, meaning deals are finalised subject to receiving the necessary clearances (ad referendum of approval). Publicly Listed Companies The Board of a publicly listed company must imme - diately inform the National Securities Commission (CNV) of any event or situation that could significantly impact the placement or trading of its securities. This obligation arises from the moment a public offering of negotiable securities is requested and extends to administrators and supervisory body members. Despite this requirement, parties typically maintain confidentiality during negotiations and disclose trans - actions only upon executing definitive agreements. This practice aligns with CNV reporting obligations for individuals or legal entities acquiring or selling shares in a publicly listed company when the trans - action results in a change in ownership affecting the control group. Additionally, any individual or entity acquiring or sell - ing shares representing 5% or more of a publicly trad - ed company’s voting rights must immediately notify the CNV and provide the necessary documentation. 5.2 Market Practice on Timing The market practice on timing of disclosure generally does not differ from legal requirements, subject to the delay of disclosures where a matter is kept temporarily confidential. CNV rules recommend that the CNV be consulted for guidance where disclosure is not made or delayed. 5.3 Scope of Due Diligence In Argentina, the legal due diligence process for negotiated business combinations follows a gener - ally standard approach. The review typically cov -
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