BRAZIL Law and Practice Contributed by: Vitor Henriques and Gabriela Sella, Franco Leutewiler Henriques Advogados
appointment of executive officers, veto rights, special voting rights attached to specific mat - ters, transparency rights and appointing the fis - cal council board, amongst other possibilities. 6.9 Voting by Proxy Shareholders in Brazil are permitted to vote by proxy. Such right is granted under Brazilian cor - porate law and is subject to specific formalities and procedures outlined in both the company’s by-laws and relevant regulations, including those established by the CVM. 6.10 Squeeze-Out Mechanisms In Brazil, squeeze-out mechanisms, short-form mergers and other similar mechanisms serve as crucial tools for majority shareholders to achieve full ownership of a company following a successful tender offer. These mechanisms are governed by specific legal provisions and regulatory frameworks aimed at protecting the rights of minority shareholders while facilitating the consolidation of ownership interests. Squeeze-out mechanisms are generally gov - erned by provisions related to corporate reor - ganisations, mergers and acquisitions outlined in the Brazilian Corporation Law. These provi - sions establish the legal framework for executing squeeze-out transactions, ensuring compliance with regulatory requirements and the protection of minority shareholder rights. In addition to squeeze-out mechanisms and short-form mergers, other mechanisms may also be utilised to acquire the shares of minority shareholders who have not tendered following a successful tender offer. These include statu - tory share buyback programmes, compulsory redemption provisions and other arrangements designed to facilitate the acquisition of minority shares at a certain value.
It is important to note that, while these mecha - nisms allow majority shareholders to achieve full ownership and control of a company, they are subject to regulatory oversight and legal scru - tiny to ensure compliance with the applicable laws and the protection of minority shareholder interests. As such, any squeeze-out or merger transactions must be conducted in accordance with established legal procedures and with due consideration for the rights and interests of all shareholders involved. 6.11 Irrevocable Commitments It is common to obtain irrevocable commitments to tender or vote from the principal shareholders of the target company in Brazil. Negotiations for these commitments typically occur during the due diligence or pre-offer stages. The nature of these undertakings may vary, but they rarely contain provisions allowing the principal share - holder to accept a better offer if made. In Brazil, the process of making a bid public is governed by strict disclosure requirements established by the CVM for publicly held com - panies. When a bid is initiated, the offering par - ty is obliged to comply with these regulations, ensuring transparency and fair treatment for all stakeholders involved. The bid becomes public through a series of formal steps overseen by the CVM. Initially, the offering party must submit comprehensive docu - mentation and relevant information regarding the proposed bid to the CVM for review and approv - al. This documentation typically includes details about the transaction structure, the offer price, the terms and conditions of the bid, financing 7. Disclosure 7.1 Making a Bid Public
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