IRAQ Law and Practice Contributed by: Ahmed Al-Janabi, MENA Associates in association with Amereller
5.5 Definitive Agreements Documentation of Tender Offer Terms and Conditions
an offer are determined by the parties involved and outlined in the offer document. • No statutory requirement: the law does not man - date a specific threshold or timeframe for making an offer. • Contractual terms prevail: the offer’s conditions, including timing, are typically negotiated between the parties and detailed in the offer itself. This approach allows for flexibility in structuring offers while ensuring that the agreed terms are clearly docu - mented. 6.3 Consideration Almost all M&A in Iraq operate on a share transfer model. Under Iraqi law, each share carries a nominal value of 1 Iraqi IQD, so share transfers typically occur in exchange for cash payments based on this value. However, the actual economic value of the business is determined separately. In the shareholder agree - ment, the overall purchase price is clearly delineated, breaking it down into the nominal share value and the additional business value. To bridge value gaps in industries with high valuation uncertainty, parties may utilise various mechanisms, such as: • earn-outs; • deferred payments; and • contingent adjustments based on future perfor - mance. These tools allow the parties to address valuation dif - ferences while providing flexibility in the transaction structure. 6.4 Common Conditions for a Takeover Offer Iraqi law does not regulate takeovers. 6.5 Minimum Acceptance Conditions M&A in Iraq are primarily executed through a share transfer process rather than a tendering approach. As a result, the concept of a minimum acceptance condition for tender offers does not apply in this juris - diction.
Under Iraqi law, M&A are governed by the Iraqi Com - panies Law. The process is based on a direct offer and acceptance model and is typically executed through two main documents. • Share Transfer Resolution: a formal document that authorises the transfer of shares. • Share Transfer Agreement: a contract that outlines the terms and conditions of the share transfer. Both documents are strictly regulated by law and the Companies’ Registrar and must adhere to a pre - scribed format from which the parties cannot deviate. Consequently, the process of tendering is not appli - cable under Iraqi law for M&A. However, the parties may enter into a shareholder agreement, which is not mandatory and is governed by the Iraqi Civil Code. 6. Structuring 6.1 Length of Process for Acquisition/Sale Timeline for Acquiring or Selling a Business in Iraq Acquiring a business in Iraq is primarily conducted through a share transfer process. The duration of the process depends on several factors, including the fol - lowing. • Regulatory compliance – the target company must be fully updated with tax authorities and social security requirements. • Due diligence – a comprehensive due diligence process is essential to assess all aspects of the target company. Assuming full compliance and a smooth due dili - gence process, the overall transaction typically takes between two and four months. 6.2 Mandatory Offer Threshold Under Iraqi law, there is no mandatory offer thresh - old prescribed. Any terms and deadlines related to
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