M&A in Russia1 Feb 2021 22:44
Interesting read 1 week old interview discussing M&A in Russia
Q8
8 Take us through the typical stages of a transaction in your jurisdiction.
Although some deals are conducted through auction processes or intermediaries, the majority are sourced through direct contact between the prospective business partners. Once the deal is initiated, the process tends to follow those processes adopted in other markets with a period of due diligence ahead of the final negotiation of transaction documents. As in other markets, it is common for the parties to sign a non-binding term sheet setting out the key transaction terms before commencing due diligence.
Certain transactions involving Russian entities or those that may have an effect in Russia may require regulatory approval. Subject to certain exemptions, the acquisition of ‘control’ by foreign investors of Russian companies operating in ‘strategic business sectors’ requires government consent. ‘Strategic business sectors’ include the development of significant subsoil fields, telecommunications and print media, and the nuclear, military and aviation industries. Companies incorporated in Russia and operating in any of these strategic business sectors will be presumed to be ‘strategic companies’ and therefore within the remit of the Strategic Investment Law. ‘Control’ for these purposes is broadly defined and includes controlling the majority of votes at a shareholders’ meeting, having the power to appoint a majority of the board of directors, and being entitled to appoint the CEO of the company.
Separately, and in common with many other jurisdictions, anti-monopoly laws must be considered in relation to proposed M&A transactions in Russia. The consent of the Federal Antimonopoly Service (FAS) will be required for transactions that may affect competition in Russia where certain prescribed thresholds are met. As the thresholds are relatively low, it is often necessary to approach the FAS for consent to a transaction.’
GLA
https://www.lexology.com/library/detail.aspx?g=3c450cb7-1294-4681-91a5-6242278c451c
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