BRAZIL Law and Practice Contributed by: Vitor Henriques and Gabriela Sella, Franco Leutewiler Henriques Advogados
arrangements and any other material information pertinent to the transaction. Once the CVM has reviewed and approved the bid documentation, the offering party is then required to publicly disseminate this informa - tion to shareholders and the broader market. This dissemination is typically achieved through regulatory filings with the CVM and public announcements in accordance with established disclosure protocols. 7.2 Type of Disclosure Required In Brazil, the type of disclosure required for the issuance of shares in a business combination varies depending on whether the transaction involves privately held entities or publicly held companies. For privately held entities, M&A transactions and business combinations often offer a degree of flexibility in terms of information disclosure, as the parties involved typically have more control over the information shared. This flexibility allows the parties to negotiate and tailor the disclosure requirements based on their specific needs and preferences. However, when the business combination involves publicly held companies, the regula - tory landscape becomes more stringent. Both the Brazilian Corporations Law and regulations set forth by the CVM impose various types of disclosure requirements to ensure transparen - cy and compliance with regulatory standards. These disclosure requirements may include the disclosure of material information related to the transaction, such as details about the parties involved, the terms of the transaction and any potential risks or implications for shareholders.
When the transaction is required by law to be implemented by means of tender offers, parties are often required to disclose detailed informa - tion such as: • the number of shares involved; • price and payment conditions; • subordination of the offer to the minimum number of acceptors; • the procedure that must be adopted by accepting shareholders to demonstrate their accessibility and carry out the transfer of shares; • the validity period of the offer; • the valuation methodology based on financial statements and other relevant documents; and • information to ensure shareholders and regulatory authorities have a comprehensive understanding of the transaction’s impact on the company’s financial position and perfor - mance. 7.3 Producing Financial Statements As a general rule, in the context of a tender offer bid, bidders are not required to disclose or pre - pare financial statements. Nonetheless, when M&A transactions and busi - ness combinations involve publicly held com - panies, the Brazilian Corporations Law and regulations set forth by the CVM mandate the implementation of different kinds of tender offers. In this context, bidders are required to deliver a tender offer that includes, amongst other mat - ters, valuation information and is in accordance with the IRS rules applicable in Brazil. 7.4 Transaction Documents Publicly held companies involved in business combinations or M&A transactions are typically required to disclose material information that
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