LEBANON Trends and Developments Contributed by: Joseph Nasrallah, Jad Skaff and Mia Chbeir, HNS Legal
access to bank financing. Many family-owned busi - nesses and SMEs have opted to sell minority stakes to new investors. In several cases, investors used “lollars” to settle outstanding bank debts, thereby redeploying otherwise illiquid funds into operating businesses, particularly export-oriented companies capable of generating foreign-currency revenues. However, such debt-for-equity transactions have become less common as companies progressively restructured bank exposures or settled debts at nego - tiated discounts. Due diligence practices have also evolved. Inves - tor scrutiny now focuses heavily on exposure to the National Social Security Fund (NSSF), as contribution gaps resulting from currency devaluation may give rise to retroactive claims. Buyers increasingly require escrow arrangements or fresh-currency indemnities to address contingent NSSF liabilities. Digitalisation continues to influence transaction activ - ity. The acceleration of digital services during recent years has positioned several Lebanese technology companies – particularly in fintech, telehealth and online education – as viable acquisition targets. As these businesses mature, they attract regional con - glomerates seeking to expand digital capabilities and international investors wishing to gain access to Leba - non’s technical workforce. Private equity and venture capital funds remain active, particularly in the technology ecosystem. Early-stage ventures often rely on diaspora angel investment, while more established companies seek structured VC funding that combines capital with strategic guidance. Notwithstanding domestic financing constraints, spe - cialised offshore funds continue to support Lebanese entrepreneurs and, in some cases, facilitate partial or full exits through structured acquisitions. Another observable trend has been the sale or restruc - turing of Lebanese subsidiaries by foreign or regional groups seeking to reduce exposure to local market risks. Certain shareholders have divested minority or controlling stakes, while others have reorganised Leb - anese operations under separate holding structures.
Compared with neighbouring Gulf jurisdictions, over - all M&A activity in Lebanon remains modest in scale. The market is dominated by SMEs and family-owned enterprises, and many transactions are conducted pri - vately without extensive disclosure obligations. Bank mergers and acquisitions remain a key area of discussion. Although implementation of the banking restructuring framework remains ongoing, the legal architecture for consolidation exists under the Code of Money and Credit, the Facilitating Bank Merger Law No 192 of 1993 (as amended), and, more recently, the Law on the Reform and Restructuring of the Bank - ing Sector in Lebanon No 23/2025 (the “Banking Reform Law”). The Banking Reform Law represents a significant shift from voluntary consolidation toward a regulatory resolution framework, empowering the Higher Banking Commission to mandate restructuring measures, including compulsory mergers and asset transfers to bridge institutions. The appointment of Karim A. Souaid as Governor of the Central Bank has reinforced this direction, signal - ling a more interventionist regulatory approach toward recapitalisation and the treatment of non-viable insti - tutions. Because many transactions in Lebanon involve pri - vately negotiated deals between SMEs and family businesses, publicly available data remains limited, and transaction volumes are often under-reported. Prior to the financial crisis, the venture capital eco - system was significantly supported by Central Bank Circular 331, which encouraged indirect bank invest - ment in technology start-ups. Following the banking collapse, these schemes have largely ceased, reshap - ing the funding landscape for early-stage companies. Regulatory and legal framework and its impact on M&A in Lebanon Lebanon has significantly modernised its legal frame - work to attract foreign investment and improve cor - porate governance, aligning its joint stock company structure with international standards. Key changes include the removal of the shareholding requirement quota for board members, allowing for greater flex - ibility in directorship selection and removal. This also
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