BELGIUM Law and Practice Contributed by: Steven De Schrijver and Carl Dotremont, Allegiance Law
Belgian economy and as part of the European stock exchange. Primary Equity Markets on Euronext Brussels Euronext Brussels classifies issuers into three com- partments based on their market capitalisation: • compartment A (large capitalisations) – issuers with a market capitalisation exceeding EUR1 billion; • compartment B (medium capitalisations) – issuers with a market capitalisation ranging from EUR150 million to EUR1 billion; and • compartment C (small capitalisations) – issuers with a market capitalisation less than EUR150 mil- lion. Alternative Trading Platforms Euronext Growth (formerly Alternext) is designed for mid-cap companies, offering a less stringent regu- latory environment to avoid International Financing Reporting Standards publication requirements. It maintains rules for investor transparency and protec- tion. Euronext Access (formerly Free Market) is a non- regulated trading facility with significantly relaxed requirements for SMEs – for example, on free float and transparency. Foreign Listings in Belgium While listings of foreign companies in Belgium are lim- ited, exceptions include notable companies such as argenx (BEL 20 index member), Shurgard Self-Stor- age, Brederode and Acacia Pharma. Some foreign companies also have secondary listings on Euronext Brussels, including Ahold Delhaize, Aperam (BEL 20 index constituent), ENGIE, Euronext, ING Groep, Saint-Gobain, Suez and Total. These foreign listings constitute less than 15% of the total listed companies. 3.3 Impact of the Choice of Listing on Future M&A Transactions The decision to list on a foreign exchange does not impede the possibility of a future sale. Belgian cor- porate law and financial law will still govern minority squeeze-out rules and other corporate restructuring measures, regardless of a foreign listing. Neverthe- less, managing transactions across two or more juris-
dictions does introduce additional complexities to the process of a future sale.
4. Sale as a Liquidity Event (Sale of a Privately Held Venture Capital- Financed Company) 4.1 Liquidity Event: Sale Process The sale of a company held by venture capital is often orchestrated as an auction, strategically harnessing competitive tension to its maximum potential. A posi- tive correlation can be established between the use of competitive auctions and the transaction value. More than three out of four transactions with values exceeding EUR100 million are preceded by a com- petitive auction. In contrast, only one in three transac- tions with values between EUR10 million and EUR100 million involve such auctions, and competitive auc- tions occur in less than one in five transactions valued below EUR10 million. In the present market landscape, initiating bilateral negotiations from the outset is the exception rather than the rule. It is important to note, however, that not every auction maintains its competitive intensity until the final phase. In numerous instances, only a handful of bidders remain actively engaged until the closing stages, and – occasionally – certain bidders success- fully secure exclusivity. 4.2 Liquidity Event: Transaction Structure The typical structure for the sale of a privately held technology company involves the sale of shares, as corporate capital gains on shares are 100% tax- exempt as long as the following conditions are met. • Subject-to-tax condition – the shares in question from which the dividends derive must fulfil the dividends-received deduction conditions. • One-year holding period – the company must hold the shares for an uninterrupted period of at least one year. • Participation condition – an implied minimum par- ticipation threshold of at least 10% or an acquisi- tion value of at least EUR2.5 million in the share capital is required.
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