BRITISH VIRGIN ISLANDS Law and Practice Contributed by: Matthew Cowman, Alex Drysdale, Rosalind Nicholson and Omonike Robinson-Pickering, Walkers
1. Trends 1.1 M&A Market
• a concentration of deal flow in certain sectors of the economy where competition for assets remains strong, including clean energy/decar - bonisation and tech; and • an increase in distressed M&A, including sales out of liquidation and Chapter 11 US bankruptcy proceedings, as a function of the higher interest rate environment. 1.3 Key Industries The last 12 months have seen M&A transactions focused in certain key sectors of the economy, including clean energy/decarbonisation and tech. In particular, cloud-based infrastructure providers, digital and data engineering compa - nies and companies offering clean energy solu - tions are being acquired. 2. Overview of Regulatory Field 2.1 Acquiring a Company The BVI Business Companies Act, 2004 (as amended) (the “Act” ) is the principal piece of legislation for M&A matters in the BVI. The primary techniques/legal means by which a company may be acquired in the BVI are as follows: • a statutory merger or consolidation pursuant to Sections 169–174 of the Act (a “Merger” ); • a plan of arrangement under Section 177 of the Act (a “Plan” ); • a scheme of arrangement under Section 179A of the Act (a “Scheme” ); and • a takeover/tender offer to shareholders of the target (a “Takeover Offer” ). It is also possible to enter into an asset sale/ purchase transaction, where the assets and
The British Virgin Islands (BVI) as a jurisdiction broadly reflects macro themes for global invest - ment and can be used as a proxy for the activ - ity and deal flows across the wider global M&A market. The past 12 months have been char - acterised by “normalisation” following the deal frenzy of 2021/2022, and by a shift in the buy - ers of assets from financial sponsors and private equity to corporates seeking to leverage their balance sheets to make strategic acquisitions. This has been driven in large part by a higher cost of financing and the uncertainty of the future direction of interest rates. Furthermore, deal flow has been concentrated in certain sectors of the economy where competition for assets remains strong, including clean energy/decarbonisation and tech. There continues to be a strong appetite for cli - ents making use of the BVI statutory merger regime to facilitate complex cross-border M&A; this is a particularly popular tool for implement - ing take-private transactions of BVI companies that are listed on US stock exchanges, provid - ing a relatively quick and easy route to securing 100% of a BVI target company. 1.2 Key Trends Key trends in the past 12 months include: • continuing interest in take-private transac - tions of BVI companies listed on the world’s major stock exchanges, although deals are characterised by longer lead-times and lower conversion rates; • a shift in the buyers of assets from financial sponsors and private equity houses to cor - porates leveraging balance sheets to make strategic acquisitions;
312 CHAMBERS.COM
Powered by FlippingBook