ANDORRA Law and Practice Contributed by: Marc Ambrós and David Cuesta, Cases & Lacambra
between the parties involved in the transaction, before such terms and conditions are reflected in the SPA. The most common conditions included in trans - actions in Andorra are conditions related to gov - ernment approval in terms of foreign investment, communications to the Presidency, Economy and Companies’ Minister regarding merger con - trol, and the approval of other regulators such as the AFA for M&A deals involving operating entities of the Andorran financial system. 6.5 Minimum Acceptance Conditions The relevant control thresholds in Andorra are to own more than 50% of the share capital or voting rights of the Andorran target company in order to gain control of such company. However, due to the composition of share capital of Andorran companies, it is common for M&A transactions to aim for the acquisition of all the shares that constitute the share capital of the Andorran target company. 6.6 Requirement to Obtain Financing In Andorra, the closing of a transaction can be subject to the bidder obtaining financing. 6.7 Types of Deal Security Measures The usual types of deal security measures that bidders seek are exclusivity period during the negotiation of the deal, break-up fees, non-solic - itation provisions, non-compete provisions and confidentiality clauses. 6.8 Additional Governance Rights If a bidder does not seek 100% ownership of a target, the bidder can secure additional gov - ernance rights by entering into agreements with other shareholders. The usual additional govern - ance right that the bidder may seek is to have
the right to appoint members of the board of directors or of the management of the target company. 6.9 Voting by Proxy Shareholders generally have the right to desig - nate another person, whether or not that person is a shareholder of the company, as a proxy- holder to represent them at a shareholders’ meeting and vote on their behalf. The proxy must be granted in writing separately for each general meeting, unless a power of attorney with powers of representation has been previously granted. 6.10 Squeeze-Out Mechanisms Squeeze-out mechanisms, short-form mergers and other similar mechanisms are currently not specifically regulated by Andorran law. 6.11 Irrevocable Commitments A bidder may seek to obtain irrevocable com - mitments to tender or vote from the principal shareholders of the target company, as such commitments are accepted in Andorra. 7. Disclosure 7.1 Making a Bid Public See 5.1 Requirement to Disclose a Deal . 7.2 Type of Disclosure Required See 5.1 Requirement to Disclose a Deal . 7.3 Producing Financial Statements There is no obligation for bidders to produce financial statements in their disclosure docu - ments. In Andorra, financial statements need to be prepared in accordance with the International Financial Reporting Standards (IFRS).
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