SWITZERLAND Law and Practice Contributed by: Beda Kaufmann, Alexander von Jeinsen, Daniel Raun and Laurent Riedweg, Advestra
nature of the target and specifics of the counterparty also play an important role. Share Deals Share deals are the most commonly used transaction structure in Switzerland. The target is usually a Swiss company limited by shares – Aktiengesellschaft (AG), Société Anonyme (SA), o r Società Anonima (SA) – or, less frequently, a Swiss limited liability company – Gesellschaft mit beschränkter Haftung (GmbH), Société à responsabilité limitée (Sàrl), or Società a Garanzia Limitata (SAGL). Although share transfers in private companies limited by shares generally do not constitute publicly available information, ownership in shares of limited liability companies needs to be published in the commercial register. Notably, Swiss- resident individual sellers will usually aim for a share deal in order to achieve tax-free private capital gains with their transaction proceeds. Asset Deals Asset deals are also common in Switzerland but tend to be used mainly in carve-out deals or distressed situations, as well as for transactions where specific risks are attached to a potential target entity that a buyer does not want to take on. Asset deals are usu - ally effected by way of so-called singular succession, whereby specific assets, liabilities and agreements are individually transferred. In addition, the Federal Act on Merger, Demerger, Conversion and Transfer of Assets (the “Merger Act”) provides for a statutory transfer of assets, which – in practice – is mostly used for intra - group transactions. With regard to employee matters, see 10.3 Employment Protection . Statutory Mergers The Merger Act sets out a statutory procedure by which either one legal entity is absorbed by another or legal entities are combined to form a new legal entity, both by way of a single act of law. In practice, these structuring options are rarely used outside intragroup transactions. However, the option to squeeze out minority shareholders by way of a merger with cash compensation under the Merger Act can be a useful tool in public takeover transactions if the offeror does not exceed the 98% voting rights threshold required for the statutory squeeze-out procedure set out in
“Tender Offers”, given that a squeeze-out merger only requires 90% of the votes. Tender Offers Pursuant to the Federal Act on Financial Market Infrastructures and Market Conduct in Securities and Derivatives Trading (“FinMIA”), investors in public companies generally have a duty to launch a public takeover offer if they cross the threshold of 33⅓% of the voting rights in the target, either alone or act - ing in concert with other parties. This threshold can be raised up to 49% (opting up) or the duty may be waived completely (opting out), both by way of a shareholder resolution amending the target’s articles of association. Voluntary takeover offers are also pos - sible and allow for more conditionality than mandatory offers. If offerors manage to obtain at least 98% of the voting rights, the FinMIA provides for a squeeze-out court procedure in order to reach 100%. 3.2 Regulation of Domestic M&A Transactions Foreign investors considering FDI in Switzerland should be aware of the Swiss merger control regu - lations, which are set out mainly in the Federal Act on Cartels and Other Restraints of Competition (the “Cartel Act”) and the Ordinance on the Control of Con - centrations of Undertakings. Generally, notification of a transaction to the Swiss Competition Commission (“ComCo”) is compulsory if certain turnover thresh - olds are met. These thresholds are relatively high compared to international standards. See 6. Antitrust/ Competition for further details. In addition, certain sector-specific regulatory require - ments also apply to domestic M&A transactions – for example, in the banking and insurance sector. Furthermore, acquisitions of listed companies are governed by FinMIA and certain ordinances enacted within the FinMIA framework. They are subject to a number of mandatory provisions aiming to ensure a level playing field, transparency and equal treatment of the shareholders to whom a public takeover offer is addressed. Swiss takeover law applies to Swiss target companies whose equity securities are listed on a Swiss stock exchange, as well as foreign target companies whose equity securities have a main listing on a Swiss stock exchange.
579 CHAMBERS.COM
Powered by FlippingBook