BELGIUM Law and Practice Contributed by: Steven De Schrijver and Carl Dotremont, Allegiance Law
• Dividend in the form of listed shares – the dividend must be paid in the form of shares of the acquiring company of the branch’s contribution, which are also listed on a stock exchange. • Contribution of a branch of activity – the company being restructured must have transferred part of its assets as part of a contribution of a branch of activity to a newly formed company or an existing company, against the issue of shares issued by the acquiring company of the contribution. • One and the same restructuring operation – the contribution of a branch of activity and the issue of shares must be the subject of one and the same restructuring operation. • Double taxation agreement – the transaction must take place in a state with which Belgium has con- cluded an agreement or convention allowing the exchange of information regarding tax matters for the avoidance of double taxation. • Tax-neutral or tax-exempt – the restructuring operation must be considered tax-neutral or tax- exempt in the state where it takes place. 5.3 Spin-Off Followed by a Business Combination Although a spin-off followed by a business combina- tion is technically permissible under Belgian law, it is important to note that such a sequence of transac- tions is not a standard practice in Belgium. 5.4 Timing and Tax Authority Ruling The execution of spin-offs necessitates meticulous preparation, encompassing operational, business, tax and legal considerations to ensure day-one readi- ness. As a result, the entire spin-off process typically extends over a minimum of one year. Although obtain- ing a ruling from the Belgian tax authorities is not man- datory before finalising a spin-off, such a ruling offers a level of assurance regarding the tax implications of a transaction that has not yet incurred fiscal conse- quences. 6. Acquisitions of Public (Exchange- Listed) Technology Companies 6.1 Stakebuilding A strategic approach for a potential bidder involves:
• accumulating a stake in the target company; • offering various advantages such as signalling the seriousness of intentions to the target’s board; • reducing overall share acquisition costs; and • potentially discouraging rival bidders. Any transactions by the bidder or those acting in con- cert may be publicly disclosed before or at the start of the offer period, with general rules for significant shareholding disclosure applying throughout a public takeover bid. If a potential bidder begins accumulating a stake, disclosure is mandatory once voting rights exceed specified thresholds, which are typically at 5% and multiples thereof (10%, 15%, etc) – although some listed companies may have lower thresholds (often 3%). Consideration must also be given to voting securities held by parties in concert, including affili- ates and existing shareholders with specific arrange- ments. Upon announcing the public takeover bid, the bidder must disclose its existing voting securities in the target. Subsequent disclosures are required by the target, bidder, parties in concert and others involved, with daily updates during the takeover bid period sub- mitted to the Belgian Financial Services and Markets Authority (FSMA) regarding the acquisition or disposal of relevant securities. Under the authority of the FSMA, individuals who make statements – directly or through intermediaries – that raise questions about their intent for a public takeover bid can be compelled to make an announce- ment within a maximum period of ten business days (“put up or shut up”). Those confirming their intention must launch the bid within an agreed-upon timeframe with the FSMA. Failure to confirm within the set period bars both the individual and those acting in concert from initiating a takeover bid for the target company’s securities for six months following the announce- ment’s publication or the expiry of the FSMA-imposed declaration deadline, whichever is later. 6.2 Mandatory Offer Any acquisition, regardless of the quantity (even a single share), may be subject to prohibition or neces- sitate a mandatory bid for the target if it increases the shareholder’s aggregate holding to 30% or more.
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