ETHIOPIA Law and Practice Contributed by: Getu Shiferaw, Awoke Mitku, Gutema Kajela Ejeta and Debora Belachew, Mehrteab & Getu Advocates LLP
in shareholders’ general meetings and board meetings. It can also seek better board and/or management representation in the agreement. However, governance rights that a bidder may seek in the agreement are effective only after the shareholders’ general meeting and entry into the commercial registry. 6.9 Voting by Proxy Shareholders who are unable to be present at a meeting may take part therein, and vote through a proxy, by filling out and depositing a form pre - pared by the person calling the meeting. The proxy authority does not require authentication or registration. A shareholder who appointed a proxy neither participates nor votes in person. 6.10 Squeeze-Out Mechanisms In Ethiopia, a majority shareholder with 90% or more of the capital of a company has the right to squeeze out minority shareholders. A major - ity shareholder who wants to buy the shares of minority shareholders during the bid for takeover of the company should notify them in general meetings, require them to transfer their shares to the shareholder within five weeks and spec - ify the price in the request. If no agreement is reached on the requested price for squeeze out, the court appoints an expert upon application by the shareholder who makes the request. 6.11 Irrevocable Commitments Obtaining irrevocable commitments from the majority shareholder of the target company to tender or vote is not common in Ethiopia.
ding is not common. In public M&A, any per - son who wants to submit an acquisition offer (an offer, solicitation to offer or request to own a majority percentage of the listed company that enables the offeror, directly or indirectly, to con - trol the board of directors of the company) is required to submit copies of the offer documents along with the relevant information to the ECMA, the security exchange and the target company. The bidder cannot take any further steps without obtaining the ECMA’s approval. Existing share - holders of the listed company being offered a takeover or acquisition shall also be provided with adequate information to assess the merits of the proposal. Currently, except for the afore - mentioned disclosure, there is no requirement to advertise a takeover bid or acquisition offer to the public. 7.2 Type of Disclosure Required In private M&A, there is no disclosure obligation on the issuer for the issuance of shares. In public M&A, the issuer is required to disclose all docu - ments required for the registration of securities. The documents required for the registration of securities include (i) a letter signed by a duly authorised officer or the transaction advisor; (ii) a prospectus or any other offer document, as applicable; and (iii) accompanying information/ documentation such as: • a copy of the certificate of commercial regis - tration; • copies of the business licences and, if appli - cable, investment permits of the issuer, as issued by the relevant government organ; • an authenticated copy of the memorandum of association of the issuer and other applicable incorporation documents, including amend - ments thereof, indicating the shareholders, board of directors and capital of the issuer;
7. Disclosure 7.1 Making a Bid Public
Private M&A are typically undertaken through personal and private negotiations, in which bid -
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