SWITZERLAND Law and Practice Contributed by: Marco Toni, Gilles Pitschen, Leonard Baumann and Lara Pafumi, Loyens & Loeff
8. Recent Legal Developments 8.1 Significant Court Decisions or Legal Developments There are a number of legislative reforms that (could) have an impact on technology M&A transactions in Switzerland. Some are already in force, while others are still being debated in the legislative process. On 1 August 2021, Switzerland was one of the first countries in the world to introduce legislation on dis- tributed ledger technology. Such legislation includes civil law but also regulatory provisions with the aim of enabling the use of distributed ledger technologies in a trusted environment. As part of the Swiss corporate law reform, which came into force on 1 January 2023, new legal provisions have been introduced that provide opportunities for flexible structuring of M&A transactions. Specifically, interim dividends are now explicitly permitted under Swiss law. They make it possible to avoid “cash-for- cash” payments so that the liquidity management after the acquisition can be improved. Additionally, a capital fluctuation band can now be introduced, allowing the board of directors to increase or reduce capital within a certain range. This enables the board of directors to issue shares as acquisition currency. Additionally, the revised Swiss data protection law came into force on 1 September 2023. One of the main goals of the new law was to achieve compatibil- ity with EU law – ie, the General Data Protection Reg- ulation (GDPR). Data protection in general becomes more important, especially in technology M&A deals involving large databases. Compliance of the target company with the newly introduced law should be observed, and data disclosure during the transaction process should take the new data protection law into consideration. The Swiss Cartel Act is currently being revised. The Swiss Federal Council adopted a dispatch on the par- tial revision of the Swiss Cartel Act that is currently in deliberation in the Swiss parliament. The core ele- ment of this revision is the modernisation of Swiss merger control. By changing from the current qualified market dominance test to the significant impediment
ent companies merge, in the case of transactions through which a company acquires direct or indirect control of one (or more) previously independent com- panies or in the case of transactions whereby two or more undertakings acquire joint control over an under- taking that they previously did not jointly control. A merger control notification obligation is triggered if: • the companies concerned have a joint turnover of at least CHF2 billion worldwide or a turnover of at least CHF500 million in Switzerland; and • at least two companies have an individual turnover of at least CHF100 million. Irrespective of the turnover, a notification obligation is triggered if one of the companies involved in a transaction has held a dominant position in the Swiss market, and the takeover/business combination con- cerns either the same market, an adjacent market or an upstream or downstream market. The notification must be made to the Swiss Competi- tion Commission. The obligation is triggered at signing and must be made prior to completion of the transac- tion. 7.6 Labour Law Regulations Generally, Swiss labour law regulations in connection with M&A transactions are rather lenient. There is no involvement of employees and/or works councils in public takeover offers. In the case of a statutory merg- er or an asset deal constituting a business transfer, the employees (or the employees’ representative body) must be informed about the reason for and the (legal, economic and social) consequences of the transac- tion. If the intent is to implement measures that affect the employees concerned, the employees need to be consulted on those measures, and they can com- ment and propose alternative measures. Employees are also granted the right to reject the transfer of their individual employment relationship ‒ in which case the employment would be terminated. However, employ- ees or the employees’ representative body (if any) do not have a binding vote on the transaction itself. 7.7 Currency Control/Central Bank Approval There is no currency control regulation or approval by the Swiss National Bank for M&A transactions.
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