EGYPT Law and Practice Contributed by: Mohamed Hashish, Farida Rezk, Omar Aboul-Ella and Mariam Rabie, Soliman, Hashish & Partners
4. Stakebuilding 4.1 Principal Stakebuilding Strategies In Egypt, stakebuilding is not explicitly regulated in Egypt. However, it is worth noting that a bid - der may acquire less than 5% of the shares of the target company without triggering require - ments to make the bid public, as highlighted below. However, if the bidder seeks to acquire 5% or more of the share capital of the target company, the bidder must notify the FRA and EGX and launch the tender offer as further high - lighted below with respect to the disclosure requirements. 4.2 Material Shareholding Disclosure Threshold In addition to the disclosure requirements described below, shareholders of a company that, directly or indirectly, own 10% or more of the total share capital of a company whose shares are listed on the EGX are under certain disclosure obligations, including, inter alia, in the following cases: • any decrease or increase by 5% or multiples thereof of its ownership of the listed securities representing the company’s capital or voting rights; and • future investment plans and intended policies regarding the management of the company if the amount acquired reaches 25% or more of the company’s capital or voting rights. In all cases, said shareholders are under obliga - tion to notify the EGX periodically at the begin - ning of January and July regarding their direct and indirect ownership of the company. 4.3 Hurdles to Stakebuilding Generally, a company may introduce different rules in its articles of incorporation or by-laws,
years from the date of entry into force of said law. • The FRA issued Decree No 57 of 2024, which establishes the rules for regulating the operation of Robo-Advisors for Investment, whereby a Robo-Advisor is an electronic sys - tem that provides financial advice to clients for the purpose of creating, managing and rebalancing an investment portfolio using AI algorithms. • The FRA issued Decrees No 140 and No 148 of 2024 establishing special purpose acquisi - tion companies (SPACs) in Egypt and recently approved the first application for a SPAC. 3.2 Significant Changes to Takeover Law In light of the amendment of the Antitrust Law as highlighted in 3.1 Significant Court Decisions or Legal Developments , which introduced a pre- notification regime, in April 2024, the Egyptian Prime Minister issued Decree No 1120 of 2024, enacting the Executive Regulations of the Anti - trust Law and thereby implementing the new amendments. The new pre-merger control system, as high - lighted in 2.4 Antitrust Regulations , went into effect as of 1 June 2024 and requires pre- approval from the ECA with respect to any transaction (eg, merger, acquisition, joint ven - ture) that constitutes an “economic concentra- tion” and meets the thresholds set out under the Antitrust Law, by means of a notification file with certain required documents attached. An eco - nomic concentration is defined as any change of control or material influence as a result of a merger or acquisition or the establishment of a joint venture.
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