CYPRUS Trends and Developments Contributed by: Christina Ioannidou, Katerina Hadjichristofi, Zoe Christou and Nicolas Panayiotou, Ioannides Demetriou LLC
faculties, further enhancing Cyprus’s reputation as a centre for medical excellence. Concentration Issues and Competition M&A activity amongst businesses operating in Cyprus is often subject to regulatory con - trol, depending on the nature of the underlying operations, but is almost invariably subject to scrutiny and approval by the Commission for the Protection of Competition, which has the exclu - sive competence for the harmonious operation of the market, within the rules of fair competition. The minimum thresholds prescribed in the local legislation governing control of concentrations in our jurisdiction are admittedly rather low, com - pared to similar thresholds in other EU countries, thus often bringing acquisitions, joint ventures or other concentrations within the ambit of local merger control laws. However, the Commission, through its vision, efficiency and expertise, as exemplified by its functions and recent deci - sions, supports operations within competitive business conditions in all sectors of the econo - my, as a means to boost economic growth and social welfare. More specifically, the Commis - sion has demonstrated that effective merger control need not impede or delay investment, balancing oversight with procedural efficiency. The Commission is recognised for its expertise in assessing M&A, ensuring timely evaluations of notifications, while safeguarding market com - petition. ESG Considerations Cyprus is actively integrating ESG principles into its financial and business sectors, reflect - ing a broader global trend toward sustainable and responsible investing. ESG considerations have further become integral to the M&A sector in Cyprus, influencing deal structures, valuations and due diligence processes. A few examples of
where the impact of ESG in the M&A sphere is visible are the following. • Enhanced due diligence – increased focus on ESG factors impacting target companies, to identify potential risks and opportunities. • Influence on valuation and deal structuring – companies with strong ESG performance often command higher valuations, as inves - tors recognise the long-term value associ - ated with sustainable practices. Conversely, companies with poor ESG records may face valuation discounts or be excluded from con - sideration due to perceived risks. • Regulatory compliance and reporting – large Cypriot companies which are public-interest entities are required to disclose non-financial information, including ESG factors, under the Non-Financial Reporting Directive (NFRD). This transparency is crucial during M&A transactions, as it allows potential acquirers to assess compliance and identify areas for improvement. • Strategic considerations – acquiring com - panies may seek targets with robust ESG practices to enhance their own sustainability profiles. Takeover Bids and Public M&A Public M&A transactions involving Cypriot public companies listed on the Cyprus Stock Exchange find roots in the Takeover Bids Law of 2007, which provides for public takeover bids for the acquisition of securities of companies and related matters. The Cyprus Securities and Exchange Commission is the competent author - ity responsible for the supervision and applica - tion of the provisions of the Takeover Bids Law. With the rise of M&A transactions in Cyprus over the last few years, there has also been increased application and utilisation of the provisions of that law, with both voluntary and mandatory
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