Acquisition International December 2011

December Issue 2011

ACQUISITION INTERNATIONAL The Voice of Corporate Finance

Eden Springs works up a thirst acquiring the

Shakespeare Coffee Company Also in this issue...

LG Household & Health Care, Ltd. International Trade: the complexities of trading globally Franchising Doing Business in the Seychelles Balancing Risk & Reward – Investing in Emerging Markets International Company Formations: Doing Business in…

The Importance of Due Diligence in M&A Transactions Mining & Energy M&A Report UK Corporate Insolvency: Surviving 2012 Austria, a Location for International Arbitration Investing in Africa - Representing…

Maximising Business Value in 2012

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Adding value throughout the entire transaction cycle.

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Our services range from environmental, health, safety and operational due diligence assessments to quantify the costs of liabilities prior to purchase, to remediation strategies to reduce or remove financial provisions from the balance sheet, thereby increasing return on investment.

With over 20 years’ experience supporting the industrial, financial and public sectors, our awardwinning team advises on over 150 multi-asset, crossborder transactions each year.

For more information, contact Nick Howard at nick_howard@urscorp.com or +44 (0) 161 237 6050.

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Austria: a Location for International Arbitration

Editor’s comment

A new report for the Government shows that the UK economy benefits from an average shortterm boost of £178m per deal from domestic M&A activity, but despite this, it also finds that most deals still fail to deliver shareholder returns in the long term.

Contrary to previous research, the study found no convincing evidence to support the view that M&A is damaging to the wider economy.

The findings come from a study carried out for the Department for Business, Innovation and Skills by the M&A Research Centre at Cass Business School. It was commissioned by the Government to inform the long-standing debate over whether M&A activity generates or destroys value the UK economy as a whole.

Senior Researcher in the M&A Research Centre at Cass Business School, Anna Faelten, said: “Based on an analysis of combined target and acquirer share price returns, we find evidence that M&A activity generates economic benefits to the UK economy amounting to an average of £178m per deal.”

In addition to adding value to the economy in the short term, corporate takeovers are found to stimulate growth in company revenues and employment in the long term.

This month, Acquisition International ends 2011 with bumper filled issue, profiling the latest mergers and acquisitions, the most prominent dealmakers and leading experts across the globe.

Merry Christmas!

Charlotte Abbott, Editor charlotte.abbott@acquisition-intl.com

How to contact AI AI welcomes news and views from its readers. Correspondence should be sent to Acquisition International, Blakenhall Park, Barton under Needwood, Burton on Trent, DE13 8AJ. Telephone 0844 809 4788 or email reception@acquisition-intl.com.

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Contents

30

News Deal Guru Sector Talk

4

6

Telecoms & Media Buyout Deals

Deal of the Month

8

Eden Springs acquisition of Shakespeare Coffee Company LG Household & Health Care, Ltd.

Sector Spotlight

10 12

International Trade: the complexities of trading globally 13 Franchising 14 Doing Business in the Seychelles 15 Balancing Risk & Reward – Investing in Emerging Markets 17 International Company Formations: Doing Business in…

18 The Importance of Due Diligence in M&A Transactions 23 Mining & Energy M&A Report 27 UK Corporate Insolvency: Surviving 2012 28 Austria, a Location for International Arbitration 30 Investing in Africa - Representing…

32 Maximising Business Value in 2012 36 Germany: A Location For International Arbitration 38 Competitionandantitrustincross-borderM&A 41 France, a Location for International Arbitration 42 Kenya - a Location for International Arbitration 43 Pension Issues in M&A transactions 44 Doing Business in Colombia 47 Turkey: Defeating the Odds 48 International Corporate Tax Analysis 2011 49 Protecting Intellectual Property in M&A transactions 50 A location for International Arbitration 52 Acquisition International Magazine's 2011 Financial Review 56 Switzerland - a Location for International Arbitration 59 Adviser Map 60 Deal Diary Deal Index

63 64

Three

News

Sanlam Private Investments Acquires Majority Stake in Swiss Fiduciary and Tax business, Summit Sanlam Private Investments (“SPI”), the private investment and wealth management business, part of South Africa-based financial services group, Sanlam Group has purchased 65% of Summit Trust International (“Summit”), the international fiduciary and tax services group based in Geneva, Switzerland. The value of the transaction is not being disclosed.

Summit’s management owners will retain the remaining 35% not owned by SPI. An independent group founded in 1999, Summit provides trust services, tax planning, specialist offshore services, foundation and holding company services to high net worth individuals. While it is headquartered in Geneva, Summit also has subsidiaries in the UK, New Zealand and Cayman Islands.

The deal bolsters SPI’s already robust offshore offering; it has stakes in UKbased Principal Investment Holdings and Australian private client investment manager, Calibre Investments, and affiliations with Swiss private bank, Pictet & Cie, and Wall Street-based, Centre Asset Management. The acquisition of the majority stake in Summit also follows the announcement two weeks ago of SPI’s agreed offer to purchase UK stockbroking and wealth management firm, Merchant Securities Group plc.

Daniël Kriel, CEO of SPI, says Summit was identified as an appropriate acquisition after an extensive search for the right partner to offer SPI clients offshore fiduciary and tax services.

“Summit is an exceptional, ownermanaged business with a reputation for excellence and a solid client base.

Effective 1 November, this acquisition provides a critical building block in our total wealth management offering, a shortcoming until now.”

Four

Ifas Warn That Further Reductions In Tax Relief Will Negatively Impact Contributions Into Sipps And Ssass

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lmost two thirds (63%) of IFAs surveyed are warning that reductions in tax relief will reduce fund flows into SIPP and SSAS wrappers, according to new research from Investec Bank (‘Investec)(1). The survey follows the introduction in April of new legislation resulting from the Finance Bill 2011, which changed some of the rules around tax relief on SIPPs and other wrappers.

Although around three quarters (76%) of IFAs surveyed have seen no change in the volume of SIPP/SSAS business since the new legislation became effective in April 2011, a fifth (20%) of pension focused IFAs have seen an increase in this type of business. Of those IFAs to have seen an increase in business, almost a third (30%) said that it has increased by more than 20% and one in ten have seen an increase of more than 30%.

Those IFAs surveyed said that their clients have on average almost 10% of their SIPP/SSAS assets held as cash deposits, equating to some £37,800. However, Investec is warning that many investors are losing out on higher returns because the cash element of their SIPP or SSAS is languishing in a deposit account paying a poor rate of return.

Investec believes that part of the reason for the increased demand in SIPP and SSAS investments is investors’ desire for greater control over their pension investments. At the same time, more IFAs are using wrap platform technology in order to offer their clients access to a broader range of funds and managers across a range of sectors.

Lionel Ross, Investec Bank commented: “Investors appear to be looking at SIPP and SSAS wrappers as an effective way to manage their pension investments in a low base rate environment and while equities remain volatile. More wrappers are migrating on to the UK wrap platform market, offering an even wider range of assets.

Lionel Ross continues, “We now offer cash deposits to six out of the twenty-two platform providers, enabling investors to benefit from more competitive returns on the cash element of their investments. Cash continues to play an important role in any SIPP or SSAS portfolio; whether that role is to ride out turbulent markets or achieve greater

flexibility but investors ensure their cash is held in an account offering a fair rate of interest.”

Robert Graves, Head of Pensions Technical Services, Rowanmoor Pensions, said, “The fact that SIPP and SSAS volumes have continued to increase despite recent rule changes is testament to the added value strengths of these products. However, part of the success story is that these products are used by those who have already built up pension funds through making taxadvantaged contributions in the past. New generations need incentives, such as the current tax relief available, to save for retirement too. Therefore it is not surprising many IFAs expressed concern that reducing tax relief would be detrimental.”

“Investment flexibility, particularly in turbulent investment times, is important.

Those who wish to avoid the current volatility witnessed in some markets may seek the relatively safe harbour of cash deposits. With this research indicating that an average of 10% of assets in SIPPs and SSASs being held as cash, it is important that IFAs use SIPP and SSAS products that can readily facilitate the use of competitive cash deposit accounts such as those offered by Investec.”

For the current tax year 2011/12 the level of contributions on which personal tax relief is granted is up to 100% of UK earnings (from employment or self employment) subject to an overall limit of £50,000 - the annual allowance. The new rules have also significantly reduced the annual allowance from £255,000 (2010/11) to £50,000 for the tax year 2011/12, reducing the lifetime allowance from £1.8m to £1.5m.

Other changes include the removal of the previously unpopular requirement to ‘secure’ a pension income from age 75, thus providing potentially increased flexibility in the way pension benefits may be drawn.

Investec Bank’s Specialist Cash Products team offers a range of cash management products to meet the various requirements within the pension portfolio, for both IFAs and pension advisers. These include Fixed Term Deposits, the Investec Pension and Trust Reserve Account and the Investec Income Account.

News

UK CORPORATES DOUBT EFSF’S ABILITY TO RESTORE CONFIDENCE IN EUROZONE • 83% of senior executives doubt the EFSF will secure confidence in Eurozone sovereign debt markets • 60% predict their business will grow despite Eurozone ‘drag’ • 52% cite easing immigration rules as key to supporting business growth • Only 3% felt the euro would be higher against sterling in 12 months’ time • 38% areconsidering expanding intonew markets to grow their business An overwhelming majority (83%) of senior executives representing UK corporates do not believe that the European Financial Stability Facility (“EFSF”) will be sufficient in securing confidence in Eurozone sovereign debt markets, according to a survey1 of senior executives at a client briefing hosted by Investec Corporate & Institutional Treasury (‘Investec’), part of Investec Bank plc.

Despite the fact that a staggering 93% of executives surveyed are concerned (37% were ‘very concerned’) about the potential risks posed to their

businesses by the Eurozone crisis, three fifths (60%) expect their firms to grow over the next 12 months. Nearly half (47%) predict organic growth while around one in 10 (13%) are planning to grow through acquisition.

When asked to identify how the Government could help their business to grow, over half (52%) of respondents thought that immigration rules should be eased while 14% thought that additional incentives should be given to banks to lend capital to businesses.

The research showed that nearly four in ten (38%)executivesintendtogrowtheirbusinessover the next year by expanding into new markets.

Furthermore, a quarter (24%) have already put in place a hedging strategy to protect themselves against further currency volatility. The overall majority of executives (53%) in attendance felt that theeurowouldbedownonsterlingoverthenext12 months, but that the current high market volatility could provide excellent opportunities in FX markets with nearly 1 in 4 (23%) planning to use FX option products more over the next 12 months.

BNP Paribas’ Wealth Management business will be jointly managed by Vincent Lecomte and Sofia Merlo As part the changes in management at BNP Paribas Group announced by JeanLaurent Bonnafé on 1st December, Vincent Lecomte and Sofia Merlo have been appointed Co-Heads of the Wealth Management business.

The two Co-Heads will report hierarchically to Jacques d'Estais, Deputy Chief Operating Officer of BNP Paribas Group and Head of the Investment Solutions (IS) division, BNP Paribas Personal Finance and International Retail Banking, and functionally to François Villeroy de Galhau, Chief Operating Officer of BNP Paribas Group and Head of Domestic Markets.

Jacques d’Estais took this opportunity to comment that "Wealth Management is an important business, serving both our domestic and international clients. I have every confidence that Sofia and Vincent will continue to develop this strategic business, drawing on BNP Paribas Group’s broad range of advisory and management expertise."

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Five

The

The Deal Guru

DEAL

GURU Eyal Bar-Zvi

The King is Dead – Long Live the King!

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rivate investors (Angels) are taking venture capitals' (VC) place in Israeli Stat-Ups

Adv. Eyal Bar-Zvi, LLB (honors), LLM (honors), BA (Eco.). Founding partner at BarZvi & Ben-Dov, Law Offices.

Data recently published in the Israeli media has shown that considerable amounts were invested in Israeli Start-Up during the first three quarters of 2011. However, further examination of the facts shows that the majority of the funds raised during that period were secured from foreign investors, and we need to remember that sums received in 2011 are sometimes also the outcome of agreements signed in 2010. Moreover, we have lately seen a substantial decline – as was also evidenced by our firm during the last two quarters – to almost a complete halt, of the investments by Israeli VC, in Israeli high-tech companies in general, and specifically in start-ups.

Ever-growing flow of both israeli and foreign private investors Israel has survived – and still is surviving – current years' economic turmoil in an

Six

admirable way. The high-tech locomotive is still pulling Israel forward. But as of the midst of 2011, young companies find it extremely difficult, and practically nearly impossible, to raise sums in high amounts (if any at all) from Israeli VC or other financial institutes, as the latter are directing their remaining capital to continue and finance their existing portfolio.

While it is true that there are still several successful Israeli VC, which continue and invest in early stage companies, the majority of them refrain from new investments. This void is now being filled with private investors, referred to as "angels".

Investing in R&D oriented companies, usually at their "seed stage" (or even preseed), bears a high risk to the investors, and in many cases yields no return, with the commonly accepted statistics indicating a success ratio of 1:10. For companies in their seed stage, which were rejected by VC or were not sufficiently mature for investments by such entities, the angels are a welcomed solution. However, due to the lack of VC investments and continuous support, sometimes even in more mature companies, angels are being approached also by more mature companies, which are at the verge of

completion of their R&D stage, or even at the stage of sales, in order to seek funds.

Be it industry veterans (referring to entrepreneurs which have already performed an "exit" event) or "unwise money" (referring to investors who do not hold sufficient knowledge of the specific industry – regardless of their basic intelligence, naturally), they are the ones gaining, during the last two quarters, the constant deal flow of offers to invest in high-tech companies in various stages.

"Angels" law exemption is not easy to achieve The temporary provision enacted by the Israeli parliament, for the encouragement of R&D investments, nicknamed "the angels law", considers an investment made by a private investor in a high-tech company (R&D oriented company, in the words of the temporary provision), as a tax deductible expense and permits the set off of such expense against several forms of income derived to such investor within the permitted period. Such benefits, which enable to consider the purchase of securities as a deductible expense, are quite unusual in the

The Deal Guru

Israeli tax scenery (or at all), and constitutes another layer within the framework of governmental encouragement to invest in the high-tech field, which as aforementioned, suffers from a clear deceleration in the flow of investments secured from large entities such as VC and Private Equity funds.

However, this is a mixed blessing, as in order to become eligible for such benefits, investors must show, among other requirements, that no less than 75% of the investment sum paid by the (individual) investor for the shares enabling such exempt, are used for the company's R&D related expenditure, and that such company's income shall not exceed 50% of its R&D expenditure.

That is to say, such benefits are suitable for companies within the seed stage, which usually anyhow turns, during the initial stages, to what is called an F&F financing round, i.e., Friends & Family (or in a humorous version described to me by one of the investors represented by our office: FFF, meaning Friends, Family & Fools), yet not to venture capital funds, while the companies which struggle to raise funds nowadays are generally the ones which have already completed major parts of the R&D stage, and are even beginning to make sales, may not be eligible for the aforementioned benefit due their inability to comply with the requirements of the temporary provision.

Eyal Bar-Zvi main@bbl.co.il www.transferpricing.co.il Zaksenberg Bldg, 15 Abba Hillel Rd. Ramat Gan 52522, Israel Tel: +972 3 7522280 Fax: +972 3 6120052

Angels' investment is de facto more complex When negotiating with a VC, the terms and conditions are rather known in advance – so as the risks involved. True, a discussion regarding the company valuation does indeed take place, yet even in this area, the scope and limits are relatively clear, and so are the terms requested by the VC, such as certain veto rights (which are referred to as "protective provisions"), preference in dividends (including certain interest), nomination of a member to the company's board of directors, etc. However, an investment made by private investors, the so-called "angels", is much more complex and is more difficult to negotiate, for several reasons.

First, angels which do not originate of the

high-tech industry, and which themselves are not experienced in raising funds, do not know which questions should be asked, nor are familiar with even a general structure of an investment agreement. In addition, when negotiation with several angels at once, each of them having a separate legal advisor, the terms of the investment may vary between each and every one of them – therefore complicating the decision process regarding the terms of each investor, to be included under the company's articles of association, not to mention the fact that the date of transfer of funds is also not necessarily the same, which may affect the company valuation and bear tax implications.

Another problem is the relatively high valuation that companies were used to set while negotiating with VC, creating a situation in which a company raises an amount which is substantially lower than the one initially intended, from various investors holding different demands and levels of industry knowledge, yet requires a high company valuation albeit no VC shall be keen on investing in accordance with such valuation (if any), and refuses to grant private investors similar terms that a VC would have otherwise received.

Take what you can Companies must understand that during the current period, at the lack of large institutional investments, they need to raise even a relatively low amount – so long as it is possible, even at the expense of wavering additional percentage or granting some of the rights which were, up-to-now, reserved for VC, to those private investors as well. Our office represents both high-tech companies and private investors, and our experience shows that a company's arrogance or over complexity of its presentation of facts, has caused interested "angels" to consider whether investing in such company is the correct move. Correctly balancing between the company's and its founders' natural expectations, and the legitimate demands of the private investors, would assist the company to make it through this difficult period, and reach the market - or to the next financing round – better prepared.

Seven

Sector Talk

Telecoms & Media Buyout Deals T

he telecoms and media sector, which also includes companies operating within the communications space, have attracted $15.6bn in private equity investment so far this year (as of 5th December 2011), an 8% increase over last year’s figure. However, despite this overall increase, investment in the latter half of 2011 across the telecoms and media industry has slowed considerably.

Aggregate deal value in H2 2011 so far stood at $5.3bn, 49% lower than the aggregate amount recorded in H1 2011. The decrease in deal volume is a common theme across the buyout industry as debt financing for leveraged buyouts remains difficult due to tightening credit markets and rising sovereign debt levels across the developed economies.

North America-based companies operating in the telecoms and media sectors have tended to attract the largest amount of private equity capital, and this has been the common trend from 2006 through to 2010. However, in 2011 to date, more capital has been invested in Europe-based companies - outstripping the amount invested in North America this year by a little over $3bn.

Despite the North America telecoms and media sector witnessing a 36% decrease in capital investment over last year’s figure, the region

still accounts for the largest proportion of these deals (49%), whilst Europe and Asia & ROW account for 35% and 15%, respectively.

Of all global deals announced in the telecoms and media sector so far in 2011, 40% of these were leveraged buyouts, which attracted 56% of aggregate capital. Add-on (or bolt-on) acquisitions account for a large proportion (31%) of total deals made this year, suggesting that private equity firms appear to be focusing more on adding value to their telecoms and media portfolio companies through strategic acquisitions rather than growing them organically. Growth capital deals made up 5% of the aggregate capital invested so far this year, representing 16% of the total number of deals. Public to private deals accounted for 18% and 13% of aggregate capital and number of deals, respectively.

The largest deal announced this year across the telecoms and media industry was the $2.6bn leveraged buyout of Com Hem AB by BC Partners. Debt financing for the transaction was provided by a consortium of financial institutions including Goldman Sachs, Nordea, UBS, Deutsche Bank, Bank of America Merrill Lynch and Morgan Stanley. Com Hem was previously owned by the Carlyle Group and Providence Equity Partners which acquired the company in December 2005 for $1.2bn.

Top 10 Largest Telecom & Media Buyout Deals 2011 YTD

Eight

Sector Talk

Number of Telecom & Media Buyout Deals by Region 2006 - 2011 YTD

Proportion of Telecom & Media Buyout Deals by Region 2006 - 2011 YTD

Aggregate Value ($bn) of Telecom & Media Buyout Deals by Region 2006 - 2011 YTD

Nine

Lead Mandate

Thirsty

Work

W

ith strong work-ethics combined with the determination to become the biggest and the best, it’s clear to see why Eden Springs are on the up. CEO Raanan Zilberman lets us in on a few of the company’s lesser-known secrets to success.

Eden Springs, Europe’s leading supplier of water and hot beverage solutions for the workplace, began its first water cooler operation in Poland in 1997. In 1999, the company expanded into the Swiss market, which became the location of the company’s European headquarters.

It was through a combination of organic growth and strategic acquisitions that Eden Springs has become Europe’s leading brand of water coolers in less than eight years and in order to broaden its drinking solutions’ concept, Eden Springs is now also providing different coffee solutions.

Today, Eden Springs has a presence in Denmark, Estonia, Finland, France, Latvia, Lithuania, Luxembourg, Israel, Netherlands, Norway, Poland, Spain, Sweden, Switzerland and the United Kingdom.

Raanan Zilberman, CEO of the Eden Springs Group, talks about the Group’s latest acquisition and explains what he thinks has made the company so successful.

“Our mission is to delight and energize our customers by fulfilling office drinking products and services to continually exceed

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their expectations,” smiles Zilberman. And it’s clearly something that Eden Springs does and does well, or so say its customers.

“Defining a typical Eden Springs customer is not easy as we have a diverse client base which spans private customers (families) through to big, multi-national corporations,” Zilberman muses. “However, the average Eden Springs customer is a mid-sized company with between 20 to 50 employees to which we provide two to three water coolers.”

Currently, Eden Springs distributes more than 600,000 water-coolers annually; it employs more than 2,300 staff and has a turnover of some 250 million Euros.

“We believe that Eden Springs has three key selling points,” says Zilberman. “Firstly, our approach to well-being at work – we believe that employees are an organisation’s most important resource. As they spend the majority of their waking hours at work, the workplace becomes an important place to promote well-being. Over the years, we’ve collected a multitude of research and developed tools to help our customers maximise the feeling of well-being in the workplace.

“Secondly, our dedication to deliver exceptional levels of service to our customers. To prove how confident we are in our service delivery, we offer a unique guarantee if we fail to deliver our promises.

These promises cover four important areas: cooler installation, cooler sanitisation,

office water delivery and water quality so that our customers can feel reassured that they will receive the service they expect and deserve.

“Thirdly, we operate sustainably, with Carbon Neutral certified products and services.” Several of our local markets are fully, 100% Carbon Neutral and in all markets we make considerable efforts to reduce our Carbon footprint.

Great USPs it has to be said, but strategic plans were to expand above and beyond this current offering so the company acquired Shakespeare Coffee Company via its UK subsidiary, thus strengthening the clientbase and adding a further 4,500 customers to its already thriving business.

“Eden Springs is growing both organically and through strategic acquisition and, over the years, we have integrated more than 60 different companies into our business. The recent acquisitions of Shakespeare Coffee Company in the UK and Kaffen er Klar in Norway reflect the firm’s commitment to strengthening its coffee and hot beverages business units to be able to provide a full water and coffee offering to its customers.

“Meanwhile, the acquisitions of UAB Neptuno, vandens pristatymas and Vanvita were made in order to strengthen our position in the Baltic region in terms of being the leading water cooler supplier.

Across Estonia, Latvia and Lithuania, we

Lead Mandate

now serve 25,000 offices. These acquisitions have increased Eden Spring’s market share in the Baltics by more than 50 per cent. All acquisitions completed during 2011 were funded by internal sources using the solid cash flow generation of Eden Springs.”

Warwickshire-based Shakespeare Coffee Company has an annual turnover of over 5.75 million Euros, and operates approximately 4,500 machines throughout Scotland, England and Wales. The company specialises in premium coffee brewing systems and vending machines, with a client-base spanning small to medium offices and large, national, multi-location businesses… it is easy to see why this was an excellent fit for Eden Springs.

Zilberman explains how the company integrated its new acquisitions into an already thriving business.

Raanan Zilberman pressinfo@edensprings.com www.edensprings.com Tel: +41 58 404 20 00

“Over the years, Eden Springs has gained vast experience in completing acquisitions and managing the integration of acquired water businesses with our own. We use well-developed methodologies and tools, together with an experienced executive leadership team, to deliver a successful integration process. This is completed in the quickest and most efficient timeframe, while increasing our service level commitments to our clients.

“We have also developed a special method for integrating acured business ….we call it 90:90. The method helps us to

achieve 90% of the expected financial contribution in less than 90 days.

“The synergies achieved through integration benefit our clients by increasing our range of offered products and services.

In addition, an acquisition allows us to increase our purchasing power and maintain our costs at the same level, while serving a larger portfolio of clients with a wider range of products.

“Eden Springs has a strong family culture, whereby country managers work together and meet regularly to share best practice and ensure we are all pulling in the same direction. This supportive culture quickly integrates new senior teams into the ‘Eden Way’. This culture of inclusivity and a ‘can do’ attitude is then cascaded down throughout the rest of the business. Other cultural aspects of the business, such as our CarbonNeutral commitment, help to create a single focus and shared vision for each company within Eden Springs.”

So what are Eden Springs plans for the future? Well, it seems the future is much like the water, crystal clear!

“We plan to develop our position as the leading provider of work-based drinks solutions across Europe and continue to grow the business organically and through acquisition,” says Zilberman. “Eden Springs is constantly looking for new business opportunities including M&A activity, in order to maximise our performance, while maintaining our client commitment for delivering the best service and full water and coffee solutions.”

Eleven

LG Aquires VOV

LG Household and Health Care Aquires VOV

L

G Household and Health Care recently acquired VOV Corp under the careful guidance of Chief Executive Officer Suk Cha. Acquisition International speaks to Suk about the transaction.

How long did the deal take to complete from start to finish?

“It took about five months to sign the contract and the deal is scheduled to be closed by end of 2011 (the contract was signed by both parties on October 27, 2011).”

What was the strategic reason for LG Household & Health Care acquiring VOV Corp?

“LGH&H has three business units: Household, Cosmetics, and Beverage.

Historically, acquisition for LGH&H has been the key to ‘fill the missing part’ and future acquisition will serve the same purposes, filling the missing part.

“LGH&H started as household and cosmetic company in 1947 and expanded to beverage industry in 2007 by acquiring CocaCola Korea Bottling Company (later changed the entity name to Coca-Cola Beverage).

“According to Euromonitor International, the global cosmetics market consists of 65% skin care and 35% colour cosmetics in 2010.

In the past five years, growth in the skin care segment was exceeded that of colour cosmetics.

“Going forward, however, this trend is expected to reverse. In the next five years, between 2010 and 2015, growth is expected to be 16% for colour cosmetics and 15% for skin care cosmetics.

“In the domestic cosmetics market, the breakdown of skin care cosmetics to color

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cosmetics is 75:25. Compared to the global market, sales portion from colour cosmetics is much smaller, but is expected to expand very fast in the future. LG H&H cosmetics sales is skewed towards skin care, with a breakdown of 85:15. LG H&H has been focused on building brand and competitiveness in the bigger market, skin care, and is starting to gear up strengthen its position in colour cosmetics.”

How do you plan to integrate VOV Corp into the organisation?

“VOV transaction will be closed by end of 2011. The legal entity will remain separately but color cosmetic business will be managed as a part of overall cosmetic business. This is the way LGH&H has managed its subsidiaries in the past.”

What other synergies do you foresee from the transaction?

“With the VOV acquisition, LG H&H’s competitiveness in colour cosmetics market will be strengthened with: (1) consolidation of existing color brands and products – instant economies of scale – to one single Colour Cosmetics Division, (2) addition of more new colour cosmetics brands, and (3) involvement of professional make-up artists.

In general, the barrier to entry for colour cosmetics is lower than skin care, and the segment is fragmented. So, building competitiveness in this category requires the consolidation of scattered colour cosmetics brands and products.

“Going forward, the Colour Cosmetics Division will: (1) brand and develop LG H&H and TheFaceShop colour cosmetics brands and products, (2) explore color-oriented brand shop opportunities, and (3) provide colour cosmetics products for overseas expansion.”

How has the deal been financed?

The deal will be financed with working capital. LGH&H creates great free cash flow every year. However, for the VOV deal, we don’t need to use outside borrowings because the deal is only KRW 55 billion. LGH&H also has 6% of treasury shares, which values over KRW 500 billion.

What will this deal mean for customers and suppliers of the business? What changes will they see?

“There will be two. Consumers will be able to see VOV products in the multi-brand shop store called ‘Beautiplex’, which covers the whole nation with over 1,000 stores.

“There will be better colour cosmetic product assortments under the existing LGH&H’s cosmetic brands.”

Was the deal managed entirely by LG H&H or were external advisers used to progress the transaction?

“LGH&H managed the deal independently without any investment bank. However, Samil PricewaterhouseCoopers, an accounting firm, and Lee & Ko, a law firm were involved.”

Suk Cha irteam@lgcare.com www.lgcare.com Tel: 82-2-6924-6097 LG GwangHwaMoon Building, 92, Sinmunno 2-ga, Jongno-gu, Seoul, 110-062, Korea, 110-062

International Trade: the complexities of trading globally

International Trade: the complexities of trading globally

I

nternational trade can certainly provide many benefits to a business. Trading internationally gives a company access to a universe of potential clients, allowing it to diversify risk and earn bigger profits. It is often a way for businesses to stand out from their competitors. A company may be viewed as comparable to others locally but, when placed in a larger and more diverse environment, may turn out to offer a unique product or service not to be missed. As international trade is more complex than trading within one’s own country, it is key for prospective traders to know what they’re getting into ahead of time. Understanding the import and export laws of the countries in which companies anticipate doing business is particularly important.

Acquisition International speaks to the experts…

Thomas G. Travis, Managing Partner, Sandler, Travis & Rosenberg, P.A. and Chairman of Sandler & Travis Trade Advisory Services.

which allows us to provide an unsurpassed range of services to our clients, including a free daily e-newsletter, WorldTrade\INTERACTIVE, and nationally recognized webinars and seminars.”

Can you please define the local laws within your jurisdiction that relate to international trade?

Thomas G. Travis: “International trade and customs is largely governed by rules and precepts set by the World Trade Organization (WTO). For example, the Harmonized System establishes import and export codes that countries around the world use to classify products for customs purposes. And the WTO valuation code creates a fair, uniform and neutral system for the valuation of goods for customs purposes and outlaws the use of arbitrary or fictitious customs values.

What are the key benefits for businesses that trade internationally?

Please highlight potential clients, risk diversification and currency strategy within your answer.

Thomas G. Travis: “Entrepreneurs have leveraged international trade for thousands of years to gain a competitive advantage, enter new markets and sell products globally.

We help clients navigate this complex, everchanging landscape to discover the hidden treasures in international transactions.”

What areas do you specialize in?

Thomas G. Travis: “Sandler, Travis & Rosenberg, P.A. (ST&R) is an international trade and customs law firm concentrating its practice on providing governments, manufacturers, importers, exporters and retailers the advice and counsel they require to meet the constantly changing demands of global trade. ST&R's affiliated consulting firm, STTAS, is a leading provider of international trade and customs consulting and managed services, offering hands-on global import/export solutions for multinational companies eager to increase their ability to move merchandise across international borders in an efficient, seamless and compliant manner.”

How does trading internationally help businesses to stand out from their competitors?

Thomas G. Travis: “Trading internationally allows companies to source inputs from and sell products to multiple markets, which yields significant savings and is a catalyst for growth.

How does your firm stand out from local competitors in terms of the services you offer?

Thomas G. Travis: “Our firm has a team of 600 global trade professionals focused solely on the business of international trade,

What are the major pitfalls when trading across regions and how can they be avoided?

Thomas G. Travis: “Problems invariably involve the failure to adequately determine the tariff and customs implications of

shipments to and from specific destinations.

These potential problems can be turned into leveraged savings that can be derived from the use of trade agreements and preference programs, free-trade zones, customs duty drawback, and certain valuation techniques that materially enhance natural price competitiveness.”

Has the government implemented any incentives to boost international trade?

And what are they doing currently to strengthen ties with other regions?

Thomas G. Travis: “The U.S. recently enacted three new trade agreements with South Korea, Colombia and Panama and is now negotiating a regional pact with eight other Asia-Pacific countries.”

Do you have any predictions regarding international trade within your jurisdiction over the next 12 months?

Thomas G. Travis: “There are two clear predictions: Companies will continue to expand, and governments will continue to increase their cross-border enforcement efforts to ensure that trade, product integrity, environment, labor, and other safety and public concerns are met.”

Thomas G. Travis ttravis@strtrade.com www.strtrade.com Tel: (305) 913-8652 1000 NW 57th Court Suite 600, Miami, Florida 33126

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Franchise Litigation and Franchising Disputes Review

Franchise Litigation and Franchising Disputes Review F

ranchise disputes arise frequently, not because franchisors are necessarily keen to have a fight with their franchisees or the other way round, but because franchise agreements are complex and last for such a long period of time. As franchise agreements are known for being the cause of disputes between franchisee and franchisor, it is important to for both parties to seek professional advice from highly skilled individuals with specific knowledge within this field. Franchising requires a level of specialist expertise right from the beginning to ensure a smooth transition and the development of a successful relationship between franchisor and franchisee. Acquisition International speaks to Eckhard Flohr, Senior Partner at PF&P Rechtsanwälte, a firm that specialises on German, Austrian and International franchise-law.

“Our main legal focus of PF&P Rechtsanwälte is distribution-law, especially national and international franchise-law and cartel-law.

“PF&P has experts with over 20 years experience not only in their main fields, but also in questions of company-law, M&A and economic law. It is a medium-sized internationally oriented law firm. We advise and represent clients from all over the world.

“We can offer counseling on the highest professional level. We know the market and understand the client’s needs for fast response. This will be guaranteed by highest strategic advice via small-expert-groups that react in shortest possible time.

“Being privileged to be involved in high profile international distribution-projects and give support in summary proceedings in cartel-affairs, we focus on workable solutions to satisfy the legal needs of our clients.

“PF&P is situated in Germany (Ulm, Düsseldorf, Erfurt, Stuttgart), in Austria (Kitzbühel, Linz) and in Belgium (Brussels).

“We have 4 Partners: Prof. Dr. Eckhard Flohr, Christian Langbein, LL.M., Christian Treumann and Prof. Dr. Kai Zwecker as well as 9 Associates: Dr. Rosemarie Aigner, Dr. Philipp Feldmann, Dirk Fissl, Carl-Christian Fricker, Dr. Frederik Neyheusel and Dr. Amelie Pohl.

Albrecht Schulz, Dr. Jörg Hanisch and Prof. Dr. Klaus Fett are our Of Counsels, whereas Prof. Dr. Fett is also head of the advisory board.

We also do have a worldwide network and expert-contacts to be able

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to give our clients all information they need.

“Our firm stand out from competitors as we concentrate especially in distribution and cartel-law.

Some of our lawyers hold positions in the legal committee of the German and Austrian franchise-association and other important associations. Some of our lawyers are lecturers at Universities in Germany and Switzerland. We are in many other national and international associations and have contacts and experience all over the world in our main-fields. Most of our lawyers publish and give lectures regularly in distribution and cartel-law.”

The distribution-method "Franchising" is steadily rising in Germany and Austria. But franchise-systems become more and more complex, as there is often no specific franchise-law and there are many different forms of franchising. So you have to consider all different kind of laws and also know the juridical development.

“The most common point where problems arise between franchisor and franchisee is when terminating the contract for cause. Often the reason is not clearly stated or not legally allowed.

“To avoid such disputes the client should have a fair contract, seek legal counsel before drafting a contract, entering into a contract and terminating a contract. There are many specific legal steps that have to be considered and therefore it is essential to have legal advice.”

Eckhard Flohr Email: flohr@pfp-legal.de www.pfp-legal.de Tel.: 0043 5352 61753-0 Fax: 0043 5352 61753-25 Bärnbichl 11 A-6382 Gasteig/Kirchdorf i.T.

Premier Offshore Seychelles Charles Lucas T: +248 4321385 F: +248 4322515 info@premier-offshore.biz premierlaw@seychelles.net www.premier-offshore.biz Suite 206, Premier Building PO Box 484, Victoria, Seychelles

A

cquisition International speaks to Mr. Charles Lucas a prominent Seychellois lawyer and Chairman of Premier Offshore Ltd, one of the leading firms of Corporate Service Providers (CSP) that provide international business services from Vitoria Mahe Seychelles.

“Premier Offshore Limited (POL) was incorporated in 2006 and has been licensed as CSP since 2008. It consists of Lawyers, Economists and Corporate Executives. Its main strength and pride is its in-house legal services and its practical and innovative business solutions services. We offer a range of integrated services such as Family Office, Trusts, Foundations and other Fiduciary services that can be tailor made for each individual client’s needs for offshore solutions.”

What approach has SIBA taken to establish Seychelles as a secure and yet one of the world’s most reputable and client friendly international business centre despite its small size and isolated location?

“SIBA carries out frequent controls on compliance and other statutory obligations of licensed offshore Corporate Service Providers (CSPs) in the implementation of its regulations and directives.

Simultaneously it does not “step on our toes” to dilute our CSP/Client relationship of confidentiality, non-disclosure of beneficial ownership and offshore corporate transactions on behalf of our clients. SIBA operates side by side with us and our association of service providers (SAOPRA). It assists in training and induction of new products and norms of operations. It requires that all CSPs be insured against professional liability and negligence. These guarantees and demanding benchmark imposed and regulated by SIBA has borne fruits of

Premier Offshore Seychelles investor confidence in the Seychelles offshore jurisdiction with regard to their Managers and CSPs. This business and professional climate of highest standards has strengthened offshore investor confidence in Seychelles as a jurisdiction which is internationally respected, clean, stable and well balanced between regulation and confidentiality. We now have almost 100,000 International Business Companies (IBC’s) incorporated in Seychelles.”

What has been the Government’s strategy in protecting Seychelles jurisdiction against financial crimes and rogue dealers?

“Stringent checks and controls have been put in place by the Government through SIBA in order to meet the highest standards required by the most demanding international regulatory bodies such as OECD, IMF etc. To date Seychelles has not been blacklisted by OECD or in the report of Levin-Coleman-Obama Stop Tax Haven Abuse Act due to the well structured regulations put in place and enforced by SIBA who works within the norms of International Treaties, new international financial services trends and legal developments.

“To avoid our jurisdiction from being tarnished, The Anti-Money Laundering Acts of 2006 and 2008 were passed to counter money laundering and other illicit financial transactions. The jurisdiction is under constant surveillance against these ills by the Seychelles Financial Intelligence Unit (F.I.U.) which was established to investigate such cases of financial crimes and guard the jurisdiction against the risk of becoming a centre for illegal money and banking transactions. This powerful watchdog is the key to the Seychelles success for compliance against international financial crimes and good repute, as never have we been cited as a money-laundering offending jurisdiction by any international inspectorate organisation. Thus even our most discerning clients have the full guarantee that they are dealing with professionals of the highest calibre in a jurisdiction which is clean, stable and internationally well respected.

What are your aspirations and strategies in your operations given the present ongoing international challenges pressure on offshore services and jurisdictions?

“At this critical time when offshore jurisdictions and services are under scrutiny and where the world has started to question the purpose of offshore products, it is also the time when investors, high net- worth individuals, and financial prospectors are also reflecting on how to protect their assets, maximize their returns, save on expenses and above all retain control of the destiny of their assets in a jurisdiction that will be safe and where the balance between regulation and confidentiality is correct. At this juncture POL with its strong legal solutions expertise, highly trained and experienced staff has structured its services to attract such particular clients. In order to achieve our objectives we have adopted the strategy of accepting serious introducers of international business who are similarly focussed to work with us and their clients to efficiently achieve their goals in full confidentiality.”

Do you feel any apprehension or threats on the offshore services globally?

“My growing fear is that mainstream powerhouses like G20 (who from within their own capitals financial crimes is taking place daily and tax frauds occur right under their nose), are currently raising their eyebrows at small but well regulated jurisdictions like Seychelles and even going even short of blacklisting us. Yet for example the federal state of Delaware USA itself is a major offshore centre and in my opinion perhaps not as well regulated as Seychelles. This double standard pauses a threat to fundamental rights of liberty, privacy and confidentiality of the individual who for reasons unrelated to tax evasion in their native country decide through transparent means to transfer their assets to another jurisdiction’s regime under a corporate name. Is it not for greed of money that those countries who profess globalisation are now seeking to tax offshore structures with legal domicile in another country.”

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Resolving Conflicts Through Mediation

Resolving Conflicts

Through Mediation C ommercial disputes can cause a great deal of disruption to a business and can waste a great deal of valuable time. The effort and cost resulting from a legal disagreement is often underestimated and commercial mediation offers an effective solution to companies involved in these legal difficulties. The hiring of a third party neutral commercial mediator provides the necessary structure for practical negotiation. A third party mediator enables the company to foster a constructive dialogue between M&A participants, or those involved in corporate conflicts. Acquisition International speaks to Colin Russ, Partner/Owner of Colin David Russ LLP.

Please give a brief synopsis of your experience in resolving conflicts through mediation?

“For 10 years as regional head of litigation at international law firm DLA Piper and now a further 10 years as a UK based, full-time mediator. In the course of more than 5000 hours of mediating, I have been involved in broad range of commercial disputes and enjoy a success rate approaching 90%. Many of the disputes I have mediated have been complex and multi-party and I estimate that the resolution of these disputes has saved in excess of £50m in legal costs.”

Who normally engages your services?

What are the key benefits of hiring a third party neutral commercial mediator?

“I am generally engaged by law firms although the greater awareness amongst corporates of the benefits of mediation has resulted in an increasing number of appointments by corporates and/or in-house corporate counsel direct. One of the benefits of the mediation process is that it can be conducted by the parties to the dispute themselves or by using in-house resource where this is available.

“Key benefits of the process itself include: the opportunity to resolve even the most complex

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dispute in a single day through an entirely confidential process; the enormous savings in not only legal costs but also management time; the far broader range of settlement options available (than can be achieved through a judicial process); the fact that it is a “safe” environment being without prejudice to the legal process; the fact that mediation is not a jurisdiction based process and is therefore extremely well-suited to the resolution of crossborder disputes.

How are you able to assist business professionals with any corporate disputes they may face? What methods do you use?

“As a mediator, I work in an entirely evenhanded fashion with business professionals using the mediation process and techniques learned over twenty years of involvement with alternative dispute resolution to help achieve a resolution. It is vital not to lose sight of the commercial purpose of the process: to recognise that mediation is not a mini-trial but a commercial negotiation conducted in the context of a process which greatly enhances the chances of success.

I offer mediation training for management and in-house corporate counsel and also work with corporates assisting in the development of a layered dispute resolution policy e.g. for incorporation within commercial contracts.”

What makes you the right mediator?

“With 10 years’ experience as a full time mediator, I am one of the most experienced mediators in the UK with a settlement rate of almost 9 out 10. I am recognised by the principal legal directories (Chambers & Partners and Legal 500) as a leading independent mediator.

The process I use includes a variety of different meetings, plenary, private, just lawyers and sometimes only the business professionals. The process is structured, dynamic and infinitely flexible involving exploration of the legal, commercial and personal issues and leading to a

Colin Russ T: +44 (0)1608 663 424 colin@colindavidruss.com www.colindavidruss.com Bloxham Mill, Bloxham, Oxfordshire, England OX15 4FF commercial negotiation where I assist the parties to negotiate in an effective and successful manner.”

What are the primary laws or regulations that govern mediation in your jurisdiction? Have there been any notable changes in regulations over the last 12 months?

“Mediation remains essentially a voluntary process in the UK. However, in England & Wales, a party who (in the court’s view) wrongly refuses to mediate may be penalised in costs. Whilst there have been no significant changes in regulations, there is an increasing willingness amongst legal and business professionals to use mediation alongside or in preference to a litigation process.”

Are you a member of an institution? If so, what are the benefits?

“I am a full time, career, mediator independent of any institution or panel and accordingly retain complete control and flexibility over my fees and terms and conditions.

Leading legal directories (Chambers & Partners and Legal 500) have recognised me as a “much in demand” leading independent.”

How has the global downturn impacted both the type and the volume of work in your jurisdiction?

“Mediation is a highly cost effective way of resolving all manner and sector types of disputes. My share of the mediation market has grown very strongly in the last 3 years with a high volume of repeat business.”

What are your predictions for the next 12 months regarding using mediation in your jurisdiction?

“The market for mediation will continue to grow within the UK, where I am based.

However, I also undertake mediations in overseas jurisdictions and in relation to crossborder disputes and I expect to see this market grow as well.”

Balancing Risk & Reward – Investing in Emerging Markets

Balancing Risk & Reward

Investing in Emerging Markets E

merging markets have been commonly explored in recent years and the on-going financial turbulence in the developed world will continue to act as a catalyst for investors to look further afield.

While there are significant macroeconomic trends that make emerging markets attractive destinations for private equity funds – elevated economic growth rates, higher expected returns and diversification benefits - substantial risks remain. The financial crisis has taught us all just how closely investments are tied with politics and economics and investing in emerging markets is a very complicated process; the financial world moves extremely quickly and it’s essential to have the best and latest financial information to make well-informed decisions about risk and return. Acquisition International speaks to Henry Potter, Partner at Alpha Associates in Zurich.

Alpha Associates is an independent private equity fund-of-funds manager with approximately $2bn of global private equity assets under management.

“We further manage private equity accounts for institutional clients and are the leading private equity fund-of-funds manager for CEE and Russia/CIS where we have been active since 1998. We invest in leading funds in the region while making acquisitions of fund positions in the secondary market. At the same time our longstanding relationships in CEE and regional expertise enable us to carry out selective direct co-investments.”

What skill set is required to successfully invest in an emerging market?

“In general the skill set for investing in an emerging market is not very different to that of investing in a developed economy, as investing in private equity funds is ultimately

about backing talented people. That said, in emerging countries factors such as in-depth understanding of the country’s commercial environment, as well as a deep local and global network are even more critical.

Experience of investing in the respective market is invaluable and key to limiting investment risk and delivering superior returns.”

Why do you invest in CEE? “The region provides an interesting hybrid of developed markets risk and emerging markets growth. GDP growth remains significantly stronger than in Western Europe and the US, while all countries in the region are democracies and most members of the EU. We can rely on stable legal and regulatory frameworks, functioning capital markets and in general a developed market infrastructure.

Performance in CEE has been very good. In fact, the region’s private equity industry has outperformed Western Europe on a five and 10-year basis as well as other emerging markets based on data provided by the EBRD, Cambridge Associates and the European Venture Capital Association. At the close of 2009, the 10-year net horizon returns for CEE private equity were 16.9% in US dollar terms.”

What are the prospects for the region?

“CEE is not a homogeneous block. Don’t forget that Poland was the only country in Europe to grow in 2009. In aggregate, the region has a solid balance sheet, with debt levels far better under control than western European countries. In particular, Poland and the Czech Republic, where most of our CEE portfolio is invested today, have performed well and are best prepared for a deepening of the financial crisis. The private equity asset class has a terrific opportunity now. The fund managers are capable and have proven their ability to generate returns.

Capital is scarce and demand for capital is rising with more and more succession transactions and a general acceptance of the business model. In twenty years’ time, people may well look back and think these were the best years to invest in private equity in the region.”

Can you name us a notable deal you’ve recently been involved in?

“In September we co-invested in a $100m funding round of OZON.ru, the undisputed leader in the Russian e-commerce sector. The company, labelled the “Amazon of Russia”, has shown annual revenue growth by more than 40% and we’re excited to support such a fast growing business and emerging household name in Russia.”

Sounds promising. So should everyone be investing in CEE then?

“We encourage investors to add the region to their allocation based on the specific argument that emerging Europe is converging with developed economies and that benefits outweigh the risks. However, to be successful in CEE it is important to have local knowledge and investment experience.

Historically, investments in the region have done well in the aftermath of crises, such as the 1998 Russian crisis and the crisis in CEE in 2001. We believe history will repeat itself.”

Henry Potter henry.potter@alpha-associates.ch www.alpha-associates.ch Tel: 0041 43 244 3100 Talstrasse 80, PO Box 2038, CH-8022 Zurich

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International Company Formations: Doing Business in

International Company Formations:

Doing Business in C

ompany formations are still big business, the size, scale and clientele may have changed over recent years, but there is still a strong demand for the service. Starting a new business or opening in a foreign location often requires more than the initial assistance when it comes to the registration process; it’s important to consider the ins and outs of employing staff, access to banking and credit facilities, local corporation taxes and the logistics of trading internationally, for this reason, we’re also going to analyse the ease of trading in each representative jurisdiction, examining how different regulatory environments can either benefit or hinder business growth. Acquisition International speaks to the experts ….

Rafael Castellanos Pérez is Senior Partner at MGI Bargalló, Cardoso y Asoc., S.C. an accounting and business consulting firm in Mexico.

Singhi Chugh & Kumar (SCK) , Chartered Accountants are a registered Chartered Accountant firm, with the Institute of Chartered Accountants of India, set up by an Act of Parliament, based out of New Delhi, India.

What are your specific areas of

Rafael Castellanos Pérez Tel: 52-229-980-7944 rafaelcp@bargallo.com.mx www.bargallo.com.mx HQ - Insurgentes Sur 949, 2do Piso, Mexico D.F. C.P. 03810

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expertise when it comes to company formations?

Rafael Castellanos Pérez: “We are able to provide foreign clients with a full array of services to incorporate in Mexico.

We provide many services, some of which include; Identifying the appropriate business entities a/o legal structures; Drafting bylaws, contracts, trusts, etc. as deemed necessary to operate in a safe and efficient way; obtaining permits and do all necessary paperwork to incorporate; registering companies formed with tax authorities obtaining tax ID as well as “electronic signature” which is essential to operate as well as file tax declarations; and finally providing directors a/o officers to maintain legal records or represent the company by means of power of attorneys granted to our reliable and trustable staff.”

Singhi Chugh & Kumar: “We at SCK provide complete service support to our clients in company incorporations beginning with check on the availability of name with the registrar of Companies (RoC), Drafting the Memorandum of Association / Articles of Association (Charter), certifying documents wherever mandated under the Companies Act, 1956

Tel: +91 11 4165 4018 info@sckonline.net www.sckonline.net #001, Ground Floor, B – 7/107 A, Safdarjung Enclave Extension, New Delhi 110 029

and rectifications or corrections, if any, wherever required under the act and ensuring the availability of the Certificate of Registration at the Registered Office of the Company.”

Please describe the legal requirements when it comes to setting up a company in your jurisdiction.

Rafael Castellanos Pérez: “There are four steps to this, the first is to obtain approval for the name of the Corporation in order to avoid duplicity with one that already exists. Then one must formalize charter and bylaws before a public notary, at least 2 shareholders and $50,000 pesos (less than $4,000 USD) of Capital Stock are required. Next the company must be registered Public Registry of Commerce, normally done by same notary. Finally the company must register with the tax authority and get a TAX ID. That’s it you are up and running.”

Does regulation in your jurisdiction hinder or benefit business growth?

What can your jurisdiction offer to prospective companies? Are there any tax benefits?

Rafael Castellanos Pérez: “All business related regulations promote

Tomáš Bělina, Partner.

Tel: +420 224 819 340 tomas.belina@akkb.cz www.akkb.cz Dlouhá 13, 110 00 Prague 1, Czech Republic

International Company Formations: Doing Business in business growth, Mexico is a very well positioned competitor in the fight to attract foreign investment thus creating jobs needed to keep pace with growth of population that incorporates to the workforce every year (about 1 million a year) Mexico has a lot of advantages to foreign companies looking to expand their business, some examples of which are, a stable government, low inflation and stable economy. There are also no exchange controls, there is complete freedom to hold, transport or trade with any currency, exchange rates are determined mainly by supply and demand.”

“In regards of taxation Mexico can offer many benefits. An example of this is that some states offer tax incentives to companies establishing and creating jobs, those incentives range from grants of exemption for payroll and property taxes (those administered by states) to providing land a/o industrial facilities at no cost.

Mexico has in effect tax treaties with 37 countries so far, following the OCDE model, so it is very possible to obtain a lower tax rate than that established by Income Tax Law in payments connected to foreign parent companies such as leases, royalties, interest, etc.”

Singhi Chugh & Kumar: “The business regulations in India are extremely favorable for the growth of industry. The government is making it possible for businesses to set up and run efficiently with improved information technology and banking solutions. E.g. All compliance reports and returns are now being filed online using digital signatures for most of the essential taxes and laws. Almost all departments of governance and tax collections are now computerized employing modern technology and ITeS backed solutions.

The present tax structure is complicated, but the government is in high stages of bringing out universal tax rates such as GST/VAT including a new Direct Tax Code for Income Tax etc. Currently, taxes are applied at both state (Province / Regional

level) as well as central (Federal Level) but there are various schemes of the government at both levels which promote industry, provide grants , subsidies and benefits especially if the industry contributes to the development of a backward area or economically weak area, or if infrastructure development and export lead to export earning, or in special areas of industry which the government feels needs to be encouraged for growth such as automobile sector for small cars, renewable sources of energy like solar, wind etc. These benefits are available in various forms such as exemption from or reduction in taxes, both direct and indirect, depending on the scheme of the government available in the given area. Exemptions from import duties are available for foreign exchange earning businesses. Grants and subsidies both – soft such as soft term loans or direct subsidies like capital subsidy etc. are also provided by the government.

Moreover, the amended Foreign Direct Investment (FDI) policy has been opened up to such an extent that it allows for foreign policy in almost all sectors and segments apart from a few industry verticals.”

How does ease of trading in your jurisdiction compare to other countries? Please highlight the ease of access to banking and credit facilities and local corporation taxes within your answer.

Rafael Castellanos Pérez: “As in any other country business success is mostly a question of planning and execution, largest multinationals have a strong presence in Mexico and it is well known that despite Mexico´s past economic problems this is one of the most profitable markets for all of them, it is also a fact that being Mexico striving to attract foreign investment the whole country is committed to support and help to achieve that objective, however the market is as sophisticated and fiercely competitive as in any other parts of the world so it is strongly recommended for companies willing to set up presence in Mexico to have proper advice in all business aspects with the purpose of assuring them their business plans are achievable or what changes have to

be made to ensure a successful and long term business in this country.”

“The banking and finance sector is privately owned and managed, foreign investment is allowed, actually foreigners (CITI, BBVA, HSBC and SANTANDER) controls more than 70% of assets of banking sector, so it is quite possible a foreigner will be dealing with the same bank he uses in his own country. On the other hand banks and other financial institutions are well capitalized, very liquid and willing to attract new customers; market is well developed and sophisticated so you can find solutions for any business need you may have from opening a checking account to issuing complex financial instruments either in Mexico or internationally.”

Singhi Chugh & Kumar: “Banking is easily accessible including in rural areas with all banks going almost fully online with CBS (Computerized Banking Solutions), NEFT (National Electronic Funds Transfer), RTGS (Real Time Gross Settlement). These have made banking operations easy and seamless.

Credit is easily available to very small and small scale businesses with government backed schemes promoting these sectors.

Credit is also easily available for very large scale industries where business assets are used as collateral security to obtain credits.

However, in the medium and large scale sectors, it is difficult to raise credits as the banks and financial institutions prefer to fund collateral assets and investor credibility than the business idea. But the country has seen a spurt of small to large Private Equity Investors and Angel Investors both from the organized as well as the unorganized sector that are ready to fund an innovative idea with strong operational support.”

What are the logistics of trading internationally and what support do you offer to your clients attempting to break into new markets?

Singhi Chugh & Kumar: “There is full government support and ease of operations for exporting both goods as well as services from India. International transactions are now being covered by the transfer pricing

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International Company Formations: Doing Business in regulations under the customs duty and income tax act in order to ensure both, arms length pricing and fair market valuation.

The import of material is also easily possible and duty rates are very favorable especially in the case of technological items.

We provide Transfer Pricing Support to our clients under the Income Tax Act, 1961 in the form of audits which are statutorily required and transfer pricing study for our clients to base their international transaction pricing decisions on.”

What are the main factors to be considered when employing staff?

How can potential pitfalls be avoided? Please use example to highlight your answer.

Rafael Castellanos Pérez: “Although cost of labour is cheap; even considering fringe benefits, taxes and social contributions, it is important to keep in mind that labour law generally favours employees making it unavoidable to have proper documentation and clearly drafted

job contracts.”

“When hiring top management you have to be careful of not exceeding market value of positions, many foreign companies try to compare salaries from that of their own countries and as a consequence overpaying for staff losing competitiveness in their Mexican operations.”

“Profit sharing is mandatory for businesses in Mexico and amounts to 10% of taxable income, so it is common practice that business in Mexico have a separate entity as “service company” whereas within certain limits and in strict compliance with the law they are able to reduce that burden.”

As we slowly recover from the economic downturn, do you have any predictions for the next 12 months in terms of doing business in your jurisdiction?

Rafael Castellanos Pérez: The Mexican economy depends largely on USA so as long

as that country is poised to grow the same will happen here but in a larger proportion; also due to elections for presidency next year it is expected some increase in government spending as actual cabinet is striving to complete all major projects of infrastructure promised before they reach their term with a clear intention of attracting voters to the government party for a new term.

Due to above mentioned Mexico´s growth forecast for 2012, as measured by GDP increase, ranges from 4.0 to 4.8 % which compares favourably with that predicted for other countries or regions.

Singhi Chugh & Kumar: The industry vertical to be in India in the next 12 months should be organized retail trade, which is in very high stages of opening up fast for foreign direct investment which is still restrictive will open up fast. The companies which set up JVs now will have an edge over the companies which enter with a 100% equity post opening of the sector.

CASE STUDY Range of services that Infokorp can provide is constantly adopted to the needs and wishes of our clients as well as to the growth of expertise and technology. Infokorp is one of the biggest companies in the field of accounting, audit, payroll processing, tax and management consulting in Croatia.

Continuous growth we owe to the trust of our customers and their recommendations.

investors; on the contrary, foreign investors enjoy additional guarantees that are not given to home investors. The Croatian Constitution provides that no law or other legal document shall reduce the rights granted to a foreign investor at the time of investment in Croatia. It also guarantees the free repatriation of profits or capital upon fulfillment of all legal obligations.

Our services are designed to enable customers to entrust part of their duties to our experts and hence enabling them to focus on their competitive advantages.

(When foreign investors start up or participate in the start-up of an enterprise in Croatia, their rights, obligations and positions are identical to those of domestic investors, provided that the reciprocity condition is met.)

Our representative, Mr. Danko Sučević, partner in the company Infokorp, with its long experience in economics, accounting, and audit is the person to whom you can rely on; since the founding of the company and throughout the business activity.

Benefit for investors It is important to mention that the Croatian legal framework related to foreign investments is designed in a way that it does not make any advantage to domestic

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Further on, the Investment Promotion Act regulates the promotion of investment made by national and foreign legal or natural persons that carry out economic activities and participate in the trade of goods and services with the aim of fostering economic growth, facilitating development and implementation of the economic policy of the Republic of Croatia, its integration in the international trade and strengthening of the competitiveness of the Croatian economy.

This Act also prescribes incentive measures. The incentive measures are: tax advantages; tariff preferences; aid to cover eligible costs of the job creation linked to an investment; aid to cover eligible costs of training linked to an investment; incentive measures for the establishment and development of technology and innovation centres strategic business support services, incentive measures for large investment projects - investment projects of significant economic interest.

Tel.: + 385 1 2221 200 Fax.: + 385 1 6112 574 infokorp@infokorp.hr www.infokorp.hr Savska 64/III, 10000 Zagreb, HR

International Company Formations: Doing Business in

CASE STUDY: RUSSIA

The Russian legislation permits foreign investment in most sectors of the Russian economy: portfolios of government securities, stocks and bonds, direct investment in new businesses, the acquisition of existing Russian-owned entities, joint ventures, etc. Nevertheless the Law doesn’t apply to the investment of foreign capital in banks, credit organizations, insurance companies and non-profit organizations.

In Russia foreign investors may establish a representative office or a branch of a (i) foreign legal entity; (ii) Russian legal entity as an enterprise with foreign investment, which is either entirely foreign-owned, or co-owned with a Russian partners; and (iii) act directly as a pure foreign investor.

One of the most important features of the legislation is tax stabilization provisions apply to foreign investors that are implementing “priority investment projects” which are defined as a project with foreign investment of at least RUR 1 bln (USD 31,8 Mio at the current exchange rate) or where a foreign investor has purchased an equity interest of at least RUR 100 Mio (USD 3,2 Mio at the current exchange rate).

A representative office of a foreign legal entity is not considered to be a Russian legal entity, but representing the interests of a foreign legal entity in Russia in order to promote its business. Representative office is not expected to engage in commercial activities in Russia.

Consequently, most representative offices are not subject to corporate income tax, unless their activities give rise to “permanent establishment” (PE) for tax purposes. On the contrary a branch is a subdivision of a foreign legal entity, which may fulfill all or part of the functions of its foreign founder.

For companies and projects that qualify increased of rates of certain import duties and federal taxes is prohibited until initial investments have been recouped (up to a maximum of seven years). Key exceptions are established for protective customs tariffs on commodities, excise tax, VAT on domestic goods, and Pension Funds payments.

Russian legal entity may be formed as LLC, JSC, general partnerships, limited partnerships and additional liability companies. LLC appear to be more popular, because they are easier to establish and finance, also there is no legal requirement that an LLC must register its shares. A JSC is often the preferred corporate form for joint ventures.

Certain restrictions of foreign investments are established by law, more than 40 activities in whole that constitute strategic activities in Russia, e.g. activities having impact on geophysical processes; related to the nuclear industry; related to aviation equipment and security; space activities and others.

A foreign legal entity which conducts activity in Russia through a “separate division” - representative offices, branches, construction sites and other places of business, for a period exceeding 30 days in calendar year, is required to register with the Russian tax authorities within 30 days of commencing activity regardless of

whether the activity is taxable or not.

Foreign company is liable to the corporate income tax on its business income only if their business activity creates a permanent establishment (PE). A foreign company receiving income from a source in Russia not connected with the activity of a PE is subject to withholding tax.

Russian Labour Law applies equally to Russian employees and foreign nationals employed by Russian or foreign entities.

To employ a foreign national is possible only if the employer has obtained a permit to employ foreign nationals; the employer has obtained an individual work permit for the employee (in case of “visa nationals”). Highly qualified foreign specialists are subject to a simplified procedure for obtaining a work permit and work visa.

Individuals who are defined as “Russian tax residents”, i.e. those who have been in the county for 183 days or more during 12 months, are subject to personal income tax (at rate 13%) on income received inside and outside Russia. Individuals who are not defined as “Russian tax residents” are subject to tax at rate 30% on income received from Russian sources.

info@iclcgroup.com www.iclcgroup.com Tel: 7 (495) 621 1015 3, bld. 1 Krivokolenny side-street, Moscow

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International Company Formations: Doing Business in Tomáš Bělina Partner

Dlouhá 13, 110 00 Prague 1, The Czech Republic

Tel: +420 224 819 340 Email: info@akkb.cz Web: www.akkb.cz Advokátní kancelár Kríz a Belina s.r.o. (AKKB) law firm has rich experience in providing legal services and is currently one of the leading law firms in the Czech Republic.

The AKKB team comprises of more than 30 experienced attorneys who do not only excel professionally, but also in terms of fluency in foreign languages. Thus AKKB is capable of providing all legal services in Czech, Slovak, English, German and Russian as well as in other languages, if required. The team of AKKB’s attorneys can provide clients with legal services on the highest professional level with the use of rich experience from all aspects of the legal profession. Some of AKKB’s attorneys are counted among the leading Czech experts in certain legal fields such as labour law and intellectual property law and in recent years they have obtained several prestigious awards in these legal fields.

“Our law firm provides complex legal services regarding the company formations in the Czech Republic. However our law firm also provides complex legal services to the clients after starting their business in the Czech Republic.”

AKKB is a member of the International Practice Group, which includes dozens of law firms, tax and audit consulting companies from several countries around the world.

AKKB can offer legal services not only in terms of Czech law but, through its participation in the International Practice Group AKKB is able to provide legal and tax consulting in most EU countries and other countries around the world such as U.S., Russia or China, thereby competing with international law firms.

“Doing business in the Czech Republic by the foreign investors is possible through the establishment of a branch or a company, the most typical companies established by the foreign investors are limited liability company and joint stock company.

“Whereas limited liability company is the most established one with foreign investments we provide legal requirements relating to this type of company.

Setting up a limited liability company may be divided into the following stages: 1. The company is created by executing a Deed of Foundation; 2. The registered capital of the company (minimum CZK 200.000) is paid; 3. Trade authorisation is acquired; and 4. The company is registered in the Czech Commercial Register.

Under Czech law, a limited liability company is founded by execution of its Deed of Foundation in the form of a Notarial Deed. The Deed of Foundation must be signed by the founder(s) of the company either in person or by a representative (our law firm) acting on the basis of a Power of Attorney.

Once the Deed of Foundation is duly executed, the registered capital is paid in the required amount, the trade authorisation is acquired and the company has legal title to the premises where its registered office is located, a petition for registration of the company into the Commercial Register can be filed. The company may operate its business after the registration into the Czech Commercial Register.

Does regulation in your jurisdiction hinder or benefit business growth? What can your jurisdiction offer to prospective companies? Are there any tax benefits?

“The Czech law corresponds to the purposes of an open market economy. In recent years, the Czech Republic has proven an intense legislative activity and has approached the European standard for example through some partial amendments such as allowing contractual limitation of damages in commercial-law relations since 2012.

“The Czech republic has a wide range of so called ,,support programs“ the aim of which is to promote the business within its territory and to attract the investors. For instance, the investors introducing a new production or extending the existing one in the manufacturing industry may obtain investment incentives under the Act on Investment Incentives in the case their investment exceeds 50 million CZK. The newly established companies may even obtain a 100% allowance on income tax for at most 5 years.”

Guillermo Piecarchic LL.M. Managing Director

Aguascalientes 199 despacho 302, Col. Hipódromo Condesa C.P. 06140, México D.F. Guillermo Piecarchic is currently Managing Director for PMC GROUP.

What are you specific areas of expertise when it comes to company formations?

“We currently setting up all kind of corporate entities, focusing primary for Real Estate Investments, we coordinate with Public Notaries the set up of all SPV for local and foreign investment.”

Please describe the legal requirements when it comes to setting up a company in Mexico Foreigners and locals, depending upon their need to have presence and involvement in Mexico from a commercial point of view, may opt to do business in Mexico by employing a subordinating agent, establishing a Mexican company or acquiring stock in an existing Mexican Company. The basic procedures related to the organization of a New Mexican company with capital participation are as follows: 1. The Companies Law (which is a Federal Law) provides for several types of companies that can be organized. There are various differences in their legal and tax treatment, depending which is form is chosen. We are going to outline only two common vehicles for making business in Mexico. a. Sociedad Anonima.- It is usually recommended to incorporate a limited liability stock corporation (“Sociedad Anonima”), which may adopt the form of a fixed capital company (“S.A”) or that of a variable capital company “S.A. de C.V”). The principal differences between the two is the latter may increase or decrease its capital within the limits established in the By-Laws by a mere Stockholders’ Meeting resolution without the need to fulfil further formalities. Nevertheless, both types of companies must notify of any capital amendment to the National Registry.

The key characteristics of both types of companies are: i. The shareholders liability is limited to their stock interest in the company: ii. The directors are fully liable for the loyal and diligent administration of the company: iii. Must have at least 2 (two) shareholders and a minimum capital of $50,000.00 MexCy. (Fifty Thousand Mexican Pesos); 20% (twenty percent) of which must be paid at the time of incorporation: and

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Tel: +52.555.219.7586 Email: guillermo@pmc-group.com.mx Web: www.pmc-group.com.mx

iv. Must appoint a statutory examiner who is a disinterested third party who supervises the operations of the company and represents the interest of the shareholders. b. Sociedad de Responsabilidad Limitada.Another form of limited liability corporation, the “Sociedad de Responsabilidad Limitada” or “S. de R.L.” has become popular among foreign companies.

The key characteristics of the “S. de R.L.” are as follows: i. Like the “S.A.” and “S.A. de C.V.” the partners’ liability is limited to their partnership interest in the company and the directors will be fully liable for the loyal and diligent administration of the company: ii. It must have at least 2 (two) partners to a maximum of 50 (fifty), and a minimum capital of $3,000.00 MexCy (Three Thousand Mexican Pesos), for which 50% (fifty percent) must be paid at the time of incorporation: iii. There is no requirement to appoint a statutory examiner.

Does regulation in your jurisdiction hinder or benefit business growth?

What can your jurisdiction offer to prospective companies? Are there any tax benefits?

“Unfortunately, there is no hinder or benefit business growth regulation, neither any offer to prospective companies, nor any tax benefits. There has being lots of pressure from the private sector at all levels, to at least to get some tax breaks regarding social security matter. (e.g. to obtain tax cuts to new employees with no commercial business backgrounds) but there is only negotiations, no concrete law has been published in this matter.”

How does ease of trading in your jurisdiction compare to other countries?

Please highlight the ease of access to banking and credit facilities and local corporation taxes within your answer.

“Even the Mexico has signed the NAFTA, regarding the exchange rates against the EURO and the US DOLLAR, what we being seeing in the local market, is that banks are giving very short access to credits, meaning that the guarantee requirements are higher in order to avoid risk creditors.”

Commercal Due Diligence

Alban Neveux alban.neveux@adventionbp.com www.adventionbp.com Tel: +33 6 10 94 33 39 Office in France: 6 rue Anatole de La Forge – 75017 Paris Risk & Insurance Due Diligence

Howard Kaye howard.kaye@aon.com www.aon.com Tel: 61292537411 201 Kent Street Sydney NSW 2000 Environmental Due Diligence

Julien Famy julien.famy@erm.com www.erm.com Tel: +33 (1) 53 24 10 30 13, rue Faidherbe, 75011 Paris, France Supply Chain and Logistics Technology Due Diligence

Dr. John Lockton John.Lockton@lcpconsulting.com www.lcpconsulting.com Tel: +44(0) 1442 872298 The Stables, Ashlyns Hall, Chesham Road, Berkhamsted, Herts. HP4 2ST, UK Information Technology Due Diligence

René Barlage rene.barlage@nl.pwc.com www.pwc.com Tel: +31 88 792 75 01

The Importance of Due Diligence in M&A Transactions

The Importance of Due Diligence in M&A Transactions

I

n such a challenging and ever-changing climate, it is now more important than ever for businesses to ensure effective due diligence is carried out in M&A transactions.

The recession has certainly affected the way we buy and sell. As a result, an added level of due diligence is often required. Investors certainly seem to be developing a greater appreciation of the importance of a thorough deal evaluation process, including due diligence.

The economic downturn has (and will continue to have) a residual effect on both real and perceived value. Some sellers feel the need to explain away the recession by presenting their own version of a company’s financial history, which can be misleading. At the same time, the recession has created some very real business scenarios that potential buyers should know they will need to overcome.

There is an urgency for companies to conduct intensive due diligence in financial deals, both before announcement and after.

Traditional due diligence merely verifies the history of the target and projects the future based on that history; correctly applied due diligence digs much deeper and provides insight into the future value of the target across a wide variety of factors.

Catherine Leger is a Partner at Alterlex. She explains that, in such a challenging climate, is it

Legal Due Diligence Catherine Leger www.alterlex.com TÈl. +33(0)1.53.67.49.30

Westgate, Thomas R. Malthusstraat 5, 49 avenue d'IÈna 1066 JR Amsterdam, Netherlands 75116 - Paris

absolutely essential to carry out due diligence on M&A transactions.

“Alterlex is a modern and young business Law Firm, which in addition to the experience of the professional who composed it, has already a significant experience in due diligence with no less than 5 operations per year in various activities; for instance, the activities of the target company, located in Europe, were: computer engineering and services company; spirits producer and distributor; elderly care, and manufacturing, importation and distribution of equipment for restaurants, professional kitchens, bakeries and snack bars.

“Alterlex, which is only composed of attorneys who are experts in their respective areas, is a providing to all of its clients, made up of private equity funds and mid-cap as well as listed companies engaged in varied branches of businesses both in France and abroad, with quality professional services.

“Alterlex has genuine know-how with regard to legal due diligence services as well as all other parts of M&A and provides adequate documents for all the steps of the process.

“In addition to our ability to identify and anticipate each client’s specific needs and ensure their adequate protection, Alterlex’s responsiveness and availability are at the core of our value. A partner will be assigned to the project to ensure an efficient team coordination and an effective performance of the legal due diligence.

“Due diligences are even more at the core of negotiation and there is a strong need for decision-makers to rely on a complete picture of the target company’s legal situation summarised in a due diligence report.

“Due diligence reports will clearly highlight

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The Importance of Due Diligence in M&A Transactions areas which require particular attention, making an easier evaluation of the legal findings impacts on the acquisition, allowing adequate suggestion for wording of representations and warranties and delivering additional keys to anticipate further postacquisition restructuring.

Howard Kaye is a Divisional Manager at Aon Mergers & Acquisitions Solutions and specialising in Risk and Insurance Due Diligence. He tells us about the situation in New Zealand and Australia.

“While the M&A climate in both Australia and New Zealand has remained relatively resilient in 2011, growing uncertainty over the global economic outlook and increased selectivity over new investments tempered any expectations of a strong rebound in deal activity. This was also compounded to some extent by the natural disasters; notably the Christchurch earthquakes and the Queensland floods in early 2011. These developments have resulted in a more cautious approach, greater emphasis on due diligence and increased willingness to walk away from potentially difficult deals. That said, transactions continue to be completed at a steady pace in this part of the world.

“I think there is certainly a greater awareness of the impact of poor decisions and/or poor execution has played in the failure of historical deals. Independent industry research tells us that between 50 and 60 percent of deals fail to meet their financial objectives and create value [Source: Corporate Executive Board; After the Acquisition Best Practice in Post-Merger Integration.]

Aon looked over this information to identify some of the typical reasons for failure: e.g. Pre deal risks - inadequate understanding of all of the risks associated with the deal; lack of a compelling strategy; and overly optimistic expectations of synergies. Post deal integration risks - slow post-merger integration; conflicting corporate cultures; and no risk management strategies in place. The reoccurring theme in the failure of mergers and acquisitions was a distinct lack of a rigorous merger and acquisition risk management process.

As a result, Aon developed a tailored our M&A offering to provide a ‘whole’ deal lifecycle solution that includes an acquisition

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risk assessment process that tracks the risks associated with an M&A project as it progresses through its lifecycle, from initiation to post integration.”

“Aon Mergers & Acquisitions Solutions provide this service through a dedicated team of more than 200 specialists in 23 key financial centres around the world providing financial, insurance, pensions, employee benefits and transactionrelated support for enhanced investment, pricing and strategic decision making.

“Aon’s specialised expertise, broad resources, global network and intellectual capital are utilized to deliver integrated strategies and solutions for managing business risks in an increasingly complex global environment. Our analysis focuses on deal related issues and our findings are communicated via clear and succinctly written reports that offer a better understanding of historical, current and future risks, plus a 100-day plan of action to implement at closing.

Alex Birch, a Partner at OC&C Strategy Consultants, provides his point of view.

“We have been active in the Commercial Due Diligence market for over 10 years, with a particular focus on supporting Private Equity investors and lending banks in leveraged transactions but also serve corporate clients, often working alongside their in-house acquisition teams.

“Our clients are typically Private Equity investors investing in “mid-market” deal sizes and upwards, so typically organisations that have investment funds from €1bn upwards looking at businesses with an enterprise value of at least €100 million. The downturn has seen us working with the same set of clients but often on deals that are smaller than those seen at the peak of the market. We are seeing much less of the large club deals involving two or three PE groups with very large absolute amounts of debt being put together.

“We believe we have at least three points of differentiation from other CDD providers: The strength of industry knowledge and experience we assemble for our deal teams: “We do not have a separate group of consultants only doing CDD projects; we staff our teams with people who have worked on strategy projects in the relevant industry so

understand it well.

“The depth of our analysis and thought about influencing factors on the future performance of a business: it is relatively straightforward to research markets and competitive positions in the here and now, what takes more thought and likely adds more value is consideration of trends that can positively or adversely affect the performance of a business in the next two or three years and the probability of them happening.

“Clarity of our communication to our clients: CDD engagements can generate large volumes of information, we have been complemented often on the precision and clarity with which we present our analysis of the critical issues for investors concerning the businesses and markets we examine.

“Effective commercial due diligence is particularly critical at present given the uncertainty that surrounds the outlook for different sectors of the economy and different regions. Many UK and European businesses are seeking growth through internationalisation of their revenue and many business plans we see include investment for export led growth, adding to the complexity of the diligence task.

E-commerce is a natural route to exploit for low risk international sales but is an area in which careful scrutiny of growth plans is required, particularly around the cost of achieving growth in web-based or multi-channel sales. Beyond the sales uplift e-commerce can bring there is often a need to consider whether the internet will alter the value chain and competitive dynamics of a sector. This is where good strategic thinking needs to meet commercial diligence skills to help potential investors consider the risks or opportunities for a business.”

Alban Neveux is Managing Director of Advention Business Partners, a company providing strategic advisory services to corporations and private equity firms.

“Advention was founded ten years ago and has now performed about five hundred strategic reviews for more than one hundred different private equity funds worldwide as well as for large global corporations.

“Advention’s client portfolio includes 80% of corporations and 20% of private equity funds.

Corporations include large S&P500-like groups

The Importance of Due Diligence in M&A Transactions as well as medium-sized privately-owned companies. Private equity clients include large international funds as well as funds specialized in mid-caps and small-caps.

acceptable 10 years ago, has now become too high to bear.

“Due diligence is a necessity and, obviously the more challenging the environment, then the greater the absolute necessity for our clients to secure M&A transactions with strategic due diligences that are thoroughly performed with true business insights.

“Putting aside all uncertainties regarding the global economy, we expect the demand will continue to grow, as companies located in BRIC countries are investing more and more internationally. For instance, we are providing Environmental Due-Diligence support for Chinese firms who are acquiring companies in Europe; this is a recent trend which will, by no doubt, increase in the future.

“With lower business visibility in an ever-changing global environment, strategic reviews now more than ever have to be performed with a focus which is now less on the quality of forecasts but rather on the quality of the business models along with their resilience and adaptability.

“In parallel, sustainability issues are becoming more acute, and it is critical for investors to get an expert view of the short and long-term issues their portfolio companies will face in the future, and how they can remediate them.”

“The current economic downturn comes simultaneously with the evergrowing globalization and this creates major disruptions in the way we can try to anticipate tomorrow’s business opportunities for our clients.

One way to overcome this is precisely to think more out of the box and in more disruptive modes.

Neil Humphrey is the Managing Director of Waterman Energy, Environment & Design Limited.

“With a debt market in the doldrums, future demand over the next twelve months for strategic due diligences for the private equity world is expected to remain stable at best. However business with global corporations is likely to remain active as they continue to capture growth opportunities in large emerging markets.”

Julien Famy, a Partner with ERM and Head of the Performance & Assurance and Transaction Services France Team, is based in Paris.

“ERM in France was created in 1994, to provide local support on transactions for international clients. ERM in France grew rapidly and broadened its service offering to include site investigation and remediation projects, environmental and social impact assessments, sustainability and climate change services, industrial safety, EHS regulatory support and auditing, in addition to transaction services.

Today, the Transaction Services team comprises 20 consultants with experience if all industrial sectors.

“The main clients on behalf of whom we provide sustainability duediligence services are large international private industrial corporations, Private Equity firms, Law Firms and Equator Principles Financial Institutions.

“Our transaction services activity is obviously closely correlated to the number of deals taking place. During the last economical downturn for instance, we have seen the number of projects for financial and real-estate investors reduce drastically, as the number of LBO deals plummeted. The split between trade buyers and financial clients are about 50/50 in 2011 for ERM in France.

“With the strengthening of the EHS regulations all around the globe, the increased sensitivity of the public to environmental and climate change issues, and the raising awareness of companies on Environmental, Social and Governance (ESG) topics, it has become almost compulsory for an investor to conduct an environmental due-diligence assessment. The risk of inheriting an environmental problem without any protection, whether legal, financial or technical, because no adequate due-diligence was performed during the pre-acquisition stage, which may have been

“Waterman has been delivering environmental due diligence since 1990, and has always focussed on understanding the nature of the transaction, and developing an appropriate scope to that deal, targeting headline issues based on our knowledge of that sector.

“Waterman offers a very bespoke service to its clients and therefore we do not have a typical client. Our clients range from multi-nationals through to niche service providers and Waterman’s approach centres on a small core project team who work very closely with the client to understand, amongst other things, their objectives, internal management approaches and appetite for risk.

“This core team forms the central point of contact for the client, providing a single, clear chain of communication through which all due diligence issues will be managed and addressed. The core team’s position within Waterman allows us to draw on specific technical expertise of the wider Waterman Group as and when required.

“The risks associated with investments have changed markedly over the past few years. Increased legislative pressures with respect to environmental risks and liabilities, an increased focus on carbon reduction and reputational risks have meant that the traditional “desk top” off the shelf approach to due diligence is no longer sufficient. There is now a greater need to take a more holistic and commercially-focussed approach to the assessment of environmental liabilities, embedding the environmental due diligence into the core advisory team and ensuring that the legal and insurance advisers work alongside the environmental adviser to not only identify potentials risk and liabilities, but to also help develop mitigation “Investors, specifically private equity are now beginning to hold portfolio companies for longer, and are therefore becoming more operationally focussed. Coupled with this, major Limited Partners are requiring more transparency in how their money is invested. Leading private equity firms are therefore increasingly realising that proactive management of environmental issues can create real value, and are now factoring these considerations into their investment strategies. They are now progressing from simply complying with regulations and mitigating key risks at the due diligence stage, to seeking strategic advantage from managing environmental issues affecting their portfolio companies.

From Waterman’s experience, these initiatives do not necessarily add a

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The Importance of Due Diligence in M&A Transactions significant cost to the business but can create substantial operational benefits, during the hold period and on exit of portfolio companies, and also at fundraising. Waterman has therefore been increasingly focused in this area with our clients and we recently produced updated guidance on behalf of the British Venture Capital Association (BVCA) on Responsible Investment, which was officially launched at the BVCA’s annual conference in London in October.”

John Lockton is Managing Director of LCP Consulting Ltd, a company which specialises in due diligence on operational performances across the supply chain.

“LCP has completed due diligence and postacquisition support for a wide range of VCs including, 3i, Opcapita, Oaktree, Terrafirma, Bank of Scotland, Nomura, Charterhouse, KKR and Advent.

“Our clients are drawn from both quoted and unquoted segments and with a variety of fund sizes. The organisations we have assessed are medium and large companies in the retail, manufacturing and logistics segments in Europe. Our general consulting work takes us internationally and into other market segments – so our stretch is wider. A typical assignment will last a number of weeks and be commissioned when the deal has been financially engineered to the point where the vision and dependencies are clear. Our role is to validate the operational assumptions and risks underlying the deal.

“Operational due diligence is crucial to both deal pricing and risk assessment. It also is the foundation for the first 100 days after the deal where it is important to get real momentum for change. Operational due diligence is about identifying future potential and risk, as much as validating current performance.

“The nature of the due diligence engagements undertaken by LCP has not changed as a result of the recession. What we do see is an increasing awareness and demand

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on the part of acquirers that the operational dimension has the potential to unlock value in a time of recession and uncertainty. As a result we are being asked to provide answers from our specialised knowledge on a more frequent basis and this points to the fact that financial engineering and market growth are not enough in the current climate.

“We have not found deal size or valuation terms to have affected our work during the downturn; this seems to be because our work is focussed and priced for our resources that are deployed on the ground. By the time our services are engaged the bidding team knows where the issues may be and the general structure of the deal; LCP tends to be one of the last crucial bricks in the wall.

“Looking forward, we expect current levels of activity to increase in the due diligence segment of our business. This is because VC’s are back in the market and actively looking for opportunities while prices are more affordable than they were. We believe that the validation and identification of the benefits and risks in the supply chain and operations of organisations is being viewed as much more crucial in any major deal.”

René Barlage is Director of Transaction Services at PwC in Amsterdam, the Netherlands. He specialises in IT and operational due diligence as part of the evaluation of technical, operational, market and financial risks.

“PwC provides an integrated and seamless evaluation of technical, operational, market and financial risks by combining deep transaction experience, functional and industry knowledge of our dedicated and full-time staff. The due diligence services cover the full breadth of functional expertise areas. In this way, we enhance the buyer's understanding of the target business and therefore increase the likelihood of the deal achieving its objectives. We emphasize points of risk and improvement and provide actionable recommendations that guide our clients through the full deal process,

from validating strategies, assessing options, evaluating deals, negotiations and closing, integrating to capturing value.

“Our IT due diligence services are uniquely positioned since we provide these services with a dedicated team that rapidly responds and has deep transaction and technical skills that can tap into the wider functional knowledge of our global Technology Consultants. Accumulated due diligence knowledge enables us to present actionable and quantifiable recommendations on executive level and to non-IT experts.

“Due to our dedicated focus to IT and M&A, we are able to leverage our experience in postdeal integration, carve-out, and value creation projects in pre-deal IT due diligence evaluations. We provide our client's with a point of view about the state of the current IT environment and the opportunities going forward: • Prioritized recommendations to address key issues and findings.

• Impact of our recommendations in terms of one-time costs and run-rate impact.

• Integration roadmap including the duration and level of effort of key integration projects.

“Any organisation considering a deal needs to check all the assumptions it is making about that deal. Due diligence provides peace of mind to both corporate and financial buyers, by analysing and validating all the financial, commercial, operational and technical assumptions being made. It uses past trading experience to form a view of the future and confirms that there are no 'black holes'.

“In general, the role of IT in all industries is increasing and thus the importance of evaluating IT as part of an integrated business due diligence is increasing. While the importance of IT due diligence in IT intensive industries such as banking, insurance, telecommunications and media is obvious, all industries are now becoming more dependent on information systems to support their business processes.”

Mining & Energy M&A Report

Mining & Energy M&A Report I

n the first half of 2011, 1,379 deals worth US$71 billion were announced within the mining sector, making it the busiest half year of M&A in the sector’s history. During this period the US overtook Canada and Australia to become the mining sector’s most acquisitive nation in terms of deal value.

Despite a blip in Q3, resources sector M&A in Asia is expected to rebound and dominate activity for the remainder of the year as China and India's energy-hungry economies drive demand for commodities. The transaction pipeline in the natural resources sector looks strong as North American and Europeanlisted miners compete with emerging Asian economies for control of sought-after commodities. Acquisition International speaks to Mohamed Idwan (‘Kiki’) Ganie, who is the Managing Partner of Lubis Ganie Surowidjojo, one of Indonesia’s largest law firms, which he cofounded in 1984, and who has more than 30 years of legal experience, specializing in commercial transactions and commercial litigation.

How does your firm stand out from local competitors in terms of the services you offer?

“In our more than 25 years of service, we are experienced in representing a diverse range of clients from domestic to multinational corporations, public and private companies, to Government instrumentalities and SOEs, and we work with our clients to understand their problems, determine their needs, and arrive at a practical solution that is both costeffective and viable over the long term.

“Lloyd’s Register Quality Assurance has approved LGS to the quality management standards of ISO 9001:2008 in respect to Quality Management systems and ISO 14001:2004 in respect to Environmental Management systems, both applicable to the provision of legal services including the administration system and other supporting

activities. LGS has obtained these certifications to ensure that all aspects of the firm’s operations and the quality of services are on par with the most well managed companies and organizations in the world, since achieving client satisfaction has always been the primary goal of LGS alongside with protecting our environment.”

Can you please define the global factors that have contributed to the busiest half year of M&A in the mining sector’s history?

“The ongoing economic uncertainty that hangs over Europe, and the fickle progress that has been made by the US economy, has led investors to venture out and seek new opportunities in markets that they would not have traditionally considered. This has resulted in new entrants, such as the increased interest from private equity, who have sought to invest in natural resources, and in particular in Indonesia.

“Another factor is that demand for raw materials, regionally largely driven by China, has continued apace, with significant growth over the preceding years. This has resulted in a combination of factors that have in turn led to significant M&A activity in the sector.

Some owners of mining assets have sought to lock in the gains that they have seen, new types of investors have shown interest in the industry and the region, and purchasers of raw materials have sought to integrate vertically by acquiring their suppliers.”

It is predicted by some that resources will continue to be a big driver for M&A activity in the next six months. What are your thoughts on this?

“Our view is that M&A activity will persist in the resource sector as the trend of new types of investors combined with some of the existing owners seeking an exit continues.”

What are you predictions for 2012 regarding the energy and mining sector within your jurisdiction?

“Indonesia requires substantial investment in electricity generation capacity, which is being spurred on by the government through two fast track programs for the construction of power plants, and through a number of incentives provided to investors, such as the introduction of structured infrastructure guarantees for projects that are developed as part of the public private partnership (PPP) framework.

“The government has shown an acute interest in renegotiating mining licenses, and is beginning to address the issue of concessions (both mineral and oil&gas) that are not being actively developed by the concession holders. This should result in more development activity in the sector as owners seek to secure their ownership rights.

“Finally, the upcoming 2014 domestic processing/upgrading requirements for a number of minerals and coal is likely to see implementing regulations over the coming months, which in turn will probably have a significant effect on the industry landscape, as domestic smelters are constructed and the potential associated M&A activity takes place due to companies seeking to secure a resource base.”

Mohamed Idwan Ganie ganie@lgslaw.co.id www.lgsonline.com Tel: (62-21) 831 5005, 831 5025 Menara Imperium 30th Floor Jl. H. R. Rasuna Said Kav. 1 Kuningan, Jakarta 12980, Indonesia

Twenty Seven

UK Corporate Insolvency: Surviving 2012

UK Corporate Insolvency:

Professor Mark Watson-Gandy mwg@13oldsquare.com www.13oldsquare.com T: +44 (0)20 7831 4445 13-14 Old Square Reception at 14 Old Square Lincoln’s Inn, London WC2A 3UE DX 52 London - Chancery Lane

Surviving 2012 T

he global economy was set for a broad recovery over the course of 2011 and on an international level we have certainly witnessed some encouraging signs from the Q1-Q3 period; M&A is up 21.5% and private equity buyouts have been the strongest since 2008. Unfortunately on a more local level, the UK economy is by no means out of the woods; despite having been officially out of recession for some time, the early recovery remains slow and confidence is sparse. The number of corporate insolvencies has actually increased quarter on quarter and many businesses are still falling into recession.

The government may be relying on the private sector to drive the economy forward but are our businesses in a position to deliver?

What will be the effects of the continued public sector cuts and changing fiscal and monetary policy? How can management diversify, find new markets and control costs? And, what other challenges lie ahead for businesses in 2012?

Phil Meekin is Head of Marketing for Wilson Field.

Professor Mark Watson-Gandy is a barrister at leading commercial chancery chambers, Thirteen Old Square.

Does your firm provide advice in a full range of insolvency issues or do you have a niche area?

Phil Meekin: “Individuals through to SME’s across all business sectors.”

Mark Watson-Gandy: “I advise and appear as an advocate in a full range of insolvency and banking cases.”

Who is a typical client?

Phil Meekin: “Ranges from a one-man-business through to companies with sales of £30m+” Mark Watson-Gandy: “The cab rank rule that governs the Bar

Twenty Eight

Phil Meekin p.meekin@wilsonfield.co.uk www.wilsonfield.co.uk T: 0114 2356780 The Manor House, 260 Ecclesall Road South, Sheffield, S11 9PS

means that you are the client’s choice and not the other way round.

There is no such thing as the typical client. But that makes things much more fun.”

How are your services superior to those of your competitors and how do you stand apart from regional competitors? Please use examples where appropriate.

Phil Meekin: “We pride ourselves on being commercially minded and “thinking outside of the box” and treat everybody with respect and courtesy. Experience has shown that this general delivers a better result for all concerned. Our strap-line sums it up – Experience, Expertise, Empathy.”

Mark Watson-Gandy: “The Bar has always sold itself in this country and abroad as providing some of the best legal services in the world. That reputation is hard won and any barrister soon realizes he is carving a career in a terribly competitive arena filled with talented individuals. There is no brand loyalty. You are only ever as good as your last case.”

What are the typical errors committed by companies involved in corporate insolvency proceedings?

Phil Meekin: “Poor management of cash flow and delay in taking advice. The former often stems from lack of planning – e.g. taking on a profitable contract without appreciating how much cash they need to see it through. Taking advice at an early state delivers more options. It can make the difference between survival and failure.”

With the number of corporate insolvencies increasing quarter on quarter, what would you advise companies who are unable to reconcile their debts? Are there any preventive steps they can put into place?

Phil Meekin: “Take advice – identifying the underlying problem and assessing whether the core business is viable is vital. Continuing to trade blindly can ruin any chance of long term survival.”

UK Corporate Insolvency: Surviving 2012

Mark Watson-Gandy: “Directors need to be very careful if their company is finding it difficult to meet their dues. That should ring alarm bells that the company might be insolvent. They need to seek urgent advice.

Insolvency changes everything. In law the directors find that they will owe a duty to protect the interests of the company’s creditors generally. If they trade whilst the company is insolvent and fail to protect the creditors they run of personal liability.”

The government is relying on the private sector to drive the economy forward; do you think businesses are in a position to deliver within your region? What are the key challenges that lie ahead for businesses in 2012?

Phil Meekin: “One of the key factors is confidence, and that is seriously damaged.

Bold and clear steps need to be taken by government to revive confidence and stimulate growth.”

Mark Watson-Gandy: “The government is right to consider business as the engine of the economy. These are however challenging times. There are considerable risks for businesses but also considerable opportunities. Most strikingly many business face a far greater exposure to the domino effect of attrition caused when clients go bust owing money.”

How will continued public sector cuts, fiscal and monetary policy affect

businesses in your region?

Phil Meekin: “New jobs will not be created unless businesses have confidence in the future. Without it we will dip back into recession.”

What key areas would you advise management to look into in order to diversify, find new markets and control costs?

Phil Meekin: “Rather than drastically cutting back on marketing it makes sense where possible to try to be more focused and tackling diverse markets with existing product lines. It is really important to react quickly if turnover falls – over capacity (particularly staff levels) is costly.”

What, if any, legislative progressions do you see for UK Corporate Insolvency in 2012?

Phil Meekin: “The insolvency industry has been under pressure for some time regarding pre-packs – the practice of agreeing in advance of administration the sale of a troubled company’s business or assets often to a connected party. It is proposed tjat administrators be required to give creditors three days’ notice of the pre-pack. The risk is that notification of creditors will increase the likelihood of customers cancelling contract, staff leaving and suppliers withholding their goods – effectively many businesses would evaporate before a sale takes place. A change in legislation looks likely but it is still in the melting pot.”

Twenty Nine

Austria, a Location for International Arbitration

A Location for International Arbitration

W

ulf Gordian Hauser has served as sole arbitrator, chairman of the arbitral tribunal, party appointed arbitrator or counsel for a party in numerous arbitrations before the International Court of Arbitration of the International Chamber of Commerce, the International Arbitral Centre of the Federal Economic Chamber, Vienna, in ad hoc arbitrations under the UNCITRAL-rules, under the arbitration rules of the Austrian Code of Civil Procedure and in other ad hoc arbitrations.

Wulf Gordian Hauser is a member of • the Austrian National Committee of the ICC • the London Court of International Arbitration (LCIA) • the International Arbitral Centre of the Federal Economic Chamber, Austria (VIAC) • the Permanent Arbitration Court of the Chamber of Commerce, Vienna • ArbAus, the Austrian Arbitration Association • DIS, the Deutsche Institution für Schiedsgerichtsbarkeit • ASA, the Swiss Arbitration Association.

Dr Wulf Gordian Hauser is also admitted in the state of New York, in Washington DC, and Liechtenstein. He is a member of the Austrian Takeover Commission.

The “recent cases” should include the following: Examples of cases handled by Wulf Gordian Hauser are: • Chairman in an ICC-arbitration under Polish Law concerning a dispute regarding claims of Tax Assets arising out of a Share Purchase Agreement; • Party representative in an ICC arbitration under Liechtenstein law concerning the dissolution of a major international industrial conglomerate; • Party representative in an VIAC-Arbitration under Austrian law concerning claims arising out of the financing of a major real estate project in Russia; • Chairman in an ICC-arbitration in Germany under Polish Law on warranty claims resulting from an M&A-transaction;

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• party representative in a VIAC-arbitration concerning the financing of a major construction project in Russia; • chairman in an arbitration in Warsaw under Polish Law on a construction dispute under the FIDIC rules; • chairman in an arbitration under Swiss Law in Geneva concerning the dissolution of a Joint Venture for the construction of a major power station in Kuwait; Since the 2006 major reform to Austria’s arbitration law the country’s arbitration friendly reputation has been firmly cemented.

Traditionally Austria served as a prominent location for arbitration in Central and Eastern Europe; however in the years since 2006 this base has expanded and now attracts users from across the world. Acquisition International speaks to KOR E – professor of Business and Market Law at the University of Ljubljana, Faculty of Economics.

Please give a brief synopsis of your experience dispute resolution history.

KORZE: “I'm a member of the Austrian Arbitration Association, a member of the European Arbitration Chamber headquartered in Belgium, an arbitrator of the International Commercial Arbitration Court, an arbitrator of the Permanent Court of Arbitration at the Chamber of Commerce and Industry of Slovenia, and an arbitrator at the ARNES – Academic and Research Network of Slovenia.”

“At the Permanent Court of Arbitration at the Chamber of Commerce and Industry of Slovenia I have held several positions, in 2004 as a Sole Arbitrator, in 2005 as a member of the Arbitration Tribunal, and in 2008 as the President of Arbitration Tribunal, and in 2011 as a member of Arbitration Tribunal. In some cases I was appointed by one party involved in the dispute; when I was the President of the Arbitration Tribunal I was appointed by two members or the Tribunal; finally, in accordance with the regulations I was appointed by the President of the Permanent Court of Arbitration. In the period 2005-2011 I was also appointed in eight cases as a Sole Arbitrator in domestic disputes that were held in the Tribunal of ARNES.”

Austria, a Location for International Arbitration Historically Austria served as a prominent location for arbitration in Central and Eastern Europe and now attracts users from across the world. Can you please describe what factors have contributed to its increasing popularity?

KORZE: “Most important factors contributing to the profile of Austria as a prominent location for arbitration in Central and Eastern Europe are outstanding expertise and objectivity of arbitrators, as well as the speed in the resolution of disputes.”

How has cross-border M&A activity affected demand for international arbitration in Austria?

KORZE: “I am convinced that the demand for international arbitration in Austria in cross-border M&A activity has been rather low.”

How have advances in technology changed the way you work?

KORZE: “Advances in technology have had a significant impact on the speed and quality of my work.”

Although still considered a less expensive means of dispute resolution, there is growing concern that arbitration proceedings are becoming more costly both in time and money, what are your thoughts?

KORZE: “I find it difficult to agree with this position. A quick resolution of a dispute is essential for the efficient operation of corporate players not only because of preventing the »frozen« disputable value of the case, but also because of maintaining the reputation of corporate clients in the eyes of the market and their business partners. The secrecy of arbitration procedures contributes significantly towards this aim.”

CASE STUDY: HAUSER PARTNERS RECHTSANWÄLTE GMBH – AUSTRIA

Nature of practice The firm typically represents foreign clients in business transactions in Austria and Austrian clients in foreign transactions and domestically.

The main areas of practice include M&A, capital markets and takeovers, joint ventures, corporate and commercial law, foreign investment in Austria and Eastern European countries, corporate finance and banking law, competition law, arbitration and litigation and other areas of business law. Clients include industrial enterprises, particularly in the pulp and paper, saw milling, automotive and beverage industries; banks, private equity firms, construction and engineering firms, accountancy; breweries; pharmaceutical enterprises; wholesale trading companies, service industries such as insurance and consultancies, computer and telecommunication enterprises.

Dr Wulf Gordian Hauser is also admitted in the state of New York, in Washington DC, and Liechtenstein. He is a member of the Austrian Takeover Commission.

Recent matters and key clients 1. Representing Holzindustrie Schweighofer in the acquisition of MReal Hallein GmbH, a pulp mill near

Salzburg, Austria (June 2011). http://www.ots.at/presseaussendung/OTS_ 20110630_OTS0257/m-real-hallein-gmbhan-schweighofer-gruppe-verkauft-bild 2. Representing Alcar Holding GmbH, an European market leader in aftermarket automobile wheels, in the acquisition 51 % in the Romanian Company SC Wheel Base Srl and the conclusion of ancillary agreements in connection therewith, including a Shareholder Agreement.

3. Representing the Mondi Group in the sale of 25,1 % in Mondi Hadera to Hadera Paper Ltd. and the conclusion of ancillary agreements in connection therewith. http://www.mondigroup.com/desktopdefau lt.aspx/tabid-379/124_read-14397/ 4. Representing the Mondi Group in the sale of its paper mill at Frohnleiten to the Prinzhorn Group in February 2010 http://www.wirtschaftsblatt.at/home/40747 1/index.do 5. Representing the Mondi Group in the divestiture of its 3 corrugated box plants in the UK to Smurfit Kappa Group http://www.mondigroup.com/desktopdefau lt.aspx/tabid-379/124_read-13559 Hauser Partners aims at combining the

quality and know-how of big firms with the flexibility and speed of a boutique. At Hauser Partners clients get the service from the people they speak to and not from some associates.

Client comments include: "Reliable and fast turnaround!"

"The lawyers are diligent, committed and discrete.”

“Creative, confident experienced."

and

highly

"Excellent in judging takeover situations and interpreting the law."

Clients have also described Wulf Gordian Hauser as "An extremely clever negotiator."

Tel.: +43 1 512 29 00 14 Fax.: +43 1 512 29 00 30 hauser@hauserpartners.com www.hauserpartners.com Seilerstätte 18-20, A-1010 Vienna, Austria.

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Investing in Africa – Representing Investing in Africa – Representing

I

n terms of natural resources Africa is incredibly rich and the current economic situation has provided African countries with a unique opportunity to attract inward investment. With the economic outlook not improving with any gusto in the developed world, more and more European, American and Asian businesses and individuals are turning towards Africa for investment opportunities.

In the first decade of the 21st century we witnessed a substantial increase in the amount of money foreign companies invested in Africa.

In 2000, FDI was worth about $9 billion and by 2008 it had risen almost tenfold to $88 billion. Traditionally investment was directed at natural resources but in recent years, services and manufacturing have been claiming a bigger share.

Successful investing requires good information and this feature invites a number of leading African firms to demonstrate how they can help investors in the developed world to take advantage of the unique opportunities available in their countries. We’ll be looking at your ability to work with international clients, how you can assist with formation and expansion into new markets and how you can assist with the everyday aspects of running a business i.e. dispute resolution.

Michael Kontos is the Managing Partner of Walker Kontos Advocates.

Boubacar Diakite is a Lawyer for SCP GENI & KEBE. Jeffrey Bookbinder is sole proprietor of Bookbinder Business Law in Gabrone, Botswana.

Who is a typical client?

Michael Kontos: “The firm works in broad-base commercial and corporate law. As such, it is difficult to say that we have a typical client, but the majority in number include:

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banks, development financial institutions, property developers, Kenyan blue-chips, energy companies and leading global law firms who want to undertake work in the region.”

Boubacar Diakite: “Our clients range from multinational corporations having business or contemplating to have business in Senegal and the Francophone African states.”

Jeffrey Bookbinder: “We are a niche corporate law firm therefore our clientele consists mainly of entities involved in finance and banking, securities, property development and mining.”

Does your firm offer any services that assist with formation, the daily running of the business and expansion into new markets? Please use examples within your answer to highlight how you helped international clients in the past.

Michael Kontos: “We provide start up services in the East and Central Africa region and assist our clients (whether Kenyan or other) in their expansion in the region. We have recently concluded transactions for the acquisition of banks in Tanzania and Ghana and are currently working on an acquisition in Rwanda. Our role is that of legal counsel.”

Boubacar Diakite: “Our firm offer services that assist the daily running of the business of our clients by providing them all the answers to legal questions they have. There are so many examples of international clients that our firm has helped in the past, for example: We advised Credit Suisse and Global Finance on a transaction regarding the issuance and enforcement of a promissory Note in a project with the Senegalese State. In another area, our Firm has advised Bambuks Minerals, a mining company incorporated in UK, on negotiations with the Senegalese Department of Environment on a mining exploration project.”

Jeffrey Bookbinder: “Our firm offers services to assist with the formation of

businesses and the expansion into new markets. These include the drafting and registration of all documents prescribed for company formation in terms of the Companies Act; the facilitation of acquisitions and mergers.

We acted as local counsel to Puma Energy in their acquisition of the business of BP Energy in Botswana; We facilitate organisational restructuring. We acted as local Counsel to European Investment Bank in the restructuring of a diamond mining company; and we facilitate the securing of finance. We acted as counsel to Rand Merchant Bank and First National Bank of Botswana Limited in a credit facility transaction with leading Botswana Supermarket chain as borrower.”

What opportunities are currently available in your area and how can you help investors take advantage.

Michael Kontos: “Kenya is a ripe investment destination in the property and energy sectors, as well as any retail-based industry. We offer the full bouquet of advisory services that allows our clients to structure their entry into Kenya as seamlessly as possible.”

Boubacar Diakite: “Senegal offers an attractive investment opportunity, given its favourable strategic location as gateway to West Africa; it is also the most politically stable countries on the continent and offers relevant safeguards and a highly skilled labour office. A one-stop agency, APIX has developed a process allowing investment projects to be monitored and licensed in a very short time. We will help investors by advising them on many transactions including M&A, Project Finance, Formation of companies we have a large background of advising investors.”

Jeffrey Bookbinder: “The mineral exploration industry has seen steady growth over the years. There are numerous opportunities in the refining and processing of minerals locally and in particular the Government is trying to set up structures to develop the coal and coal methane gas fields. In

Investing in Africa – Representing addition, after much delay, the Government appears intent on privatisation of key utility entities which should see foreign investment opportunities.”

Which industries are attracting the most interest and what are the potential returns?

Boubacar Diakite: “Finance and mining sectors are most attractive in Senegal. Investors can expect to benefit from the Government a legal and political environment and a stable business climate the most interesting of West Africa to develop their business.”

Jeffrey Bookbinder: “Mineral exploration, financial services and construction/development.”

What opportunities are available in your area to boost global investment competitiveness?

Michael Kontos: “Unfortunately, fiscal and licensing opportunities are limited by comparison to other countries in the Region. In spite of this, Kenya remains a choice destination not only for direct investment but for the location of regional offices.”

Boubacar Diakite: “The Senegalese Government has introduced many incentives to boost global investment competitiveness, some of these measures are: Greater protection of investment, the definition of priority sectors for investment, Compliance with the Code of the Environment, the issuance of approval documents in 10 days.”

Jeffrey Bookbinder: “Opportunities to boost global investment competitiveness include a stable political environment; minimal foreign exchange controls; Minimal regulatory controls; Transparency in bureaucratic processes; a low taxation environment; and local funding aimed mainly at diversification and economic development through foreign investment.”

How does the local economy benefit directly from foreign investment? What has the government done to ensure a balance between investment and return?

Boubacar Diakite: “The local economy benefits of foreign investment through the creation of jobs, wage distribution, consumption up and taxes collected. To ensure a balance between investment and return, the Government provides investors with a healthy and competitive economy, a renewed legal and fiscal framework and greater investment protection.”

Jeffrey Bookbinder: “The Government has established an International Financial Services sector which enables to establish qualifying entities to set up businesses in Botswana which will service non-resident entities and therefore qualify for reduced taxation. In addition, the Government does offer tax concessions to significant FDI projects.”

What are your predictions over the next 12 months regarding FDI in your area?

Boubacar Diakite: “According to the report of the UNCTAD, the United Nations Conference on Trade and Development, Senegal received $ 208 billion in 2009 and $237 billion in 2010 as FDI which represent an increase of 13, 9%. For the next 12 months, the rate may fall for these following reasons: elections approaching, the land which is the problem for investors, bad governance, electricity issues. Because of these reasons, the risk of receiving Senegal for the next 12 months”.

Jeffrey Bookbinder: “I believe that the next 12 months will see increased investment in non-precious metal mining sector.”

On a lighter note, aside from investment opportunities what else does Senegal have to offer those choosing to relocate there?

Boubacar Diakite: “Aside from investment opportunities, Senegal offers a good pension system for retired, it’s also a country which has sun all year and where tourists come to hunt or go fishing.”

Jeffrey Bookbinder: “Botswana has the enviable reputation of putting much of its territory for national parks – literally one of the last vast wildernesses on earth. And we have the Okavango Delta.”

Michael Kontos www.walkerkontos.com Skype: michael.kontos Tel + 254 20 2713023 Hakika House, Bishops Road, PO Box 60680 – 00200 Nairobi, Kenya

Boubacar Diakite c.sow@gsklaw.sn www.gsklaw.sn T:+221821 19 16 47, Bd de la République, Immeuble Sorano, BP 14392 Dakar Senegal

Jeffrey Bookbinder jeffrey@bookbinderlaw.co.bw www.bookbinderlaw.co.bw T:+267 3912 397 1st Floor Standard House, Lot 1124-30, Main Mall, Gaborone, Botswana

Mena Eremutha mena.eremutha@gelias.com www.gelias.com T: (2341) 2806970-1 Ext: 4009 6 Broad Street, Lagos, Nigeria

Thirty Three

Investing in Africa – Representing

CASE STUDY CMS BUREAU FRANCIS LEFEBVRE, FRANCOPHONE AFRICA While common law system is adopted by sixteen former British colonies, civil law system was transposed in more than thirty countries. Business law in Francophone sub Saharan Africa is increasingly modernized and harmonized within regional organizations, while in North Africa regional integration has not been successful so far.

Within CMS Bureau Francis Lefebvre, the African practice team, established more than 50 years ago, includes now over 30 lawyers based in Paris, Algiers and Casablanca and can rely on a documentation centre dedicated to African business law. Its members are exclusively dedicated to all aspects of investments and projects in Africa and especially Francophone countries. They combine expert knowledge of specific local issues with working methods of an international firm.

We provide advice on African law related the running of their businesses to clients already established in the continent, and assist them to expand into new markets in providing integrated solutions, and a pan African perspective.

Our clients range from international corporations based in Europe, Asia and America to International Development Institutions, governments and African owned groups.

During recent assignments we have advised for example: • Cement manufacturers on the privatisation of a cement plant jointly owned by the states of Benin and Nigeria, on the negotiation with the government of Democratic Republic of Congo for the privatization of a state owned cement plant; on investment in Côte d’Ivoire.

• A number of foreign investors on the structuring of joint ventures in Algeria taking into account the recent requirement on domestic shareholding; • Major food industries on their operation in West Africa, including an edible oil producers on restructuring its activities in Côte d’ivoire, on a claim related to the breach of regional competition

CASE STUDY AB & DAVID

With a population of over one billion people, the largest untapped natural resources in the world, higher than average returns on investments, Africa is THE new investment destination for investors worldwide.

However, doing business or implementing projects in Africa can be a maze if you do not understand the terrain. Working with the right Africa-based international law firm is key to the success of a business or project in Africa.

At AB & David, our focus is simple: to ensure businesses and projects succeed in Africa. We do this by helping you minimize the risks associated with doing business in Africa.

AB & David is a multi-specialist West Africa business law firm that advises clients on Private Equity, Project Finance, Loans & Securities, Capital Markets, PPPs & PFIs, Foreign Investments, Commercial Litigation & ADR, Construction, Engineering & Infrastructure, Procurement, Government Business, Oil & Gas, Mining, Labour, Pensions, Immigration and Tax. The firm is commended by its clientele for its “great commercial

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law aspects and a French leader in edible oil production on the acquisition of a Senegalese company; • The Agha Khan fund for Development on the restructuring of its controlling interests in Air Burkina and Air Mali and another Agha Khan financed entity on a PPP for the financing and operation of the National Parc of Mali; • Advans, an investment fund dedicated to micro-finance, established by multilateral and bi-lateral International Development Institutions in the setting up of small banking institutions in Cameroon, Ghana, Democratic Republic of Congo, Tanzania and Cote d’Ivoire • Various players involved in exploration and production of natural gaz in Algeria • The governments of Mali, Senegal and Madagascar on drafting laws and regulations on public procurement and PPP During the coming years opportunities should be available in particular in the following areas: building and/or operating and maintaining infrastructures in using PPP schemes, especially in power, water, and transportation sectors; concentration of the banking sector and development of financial services; development of agro industries; producing and distributing of consumer goods.

Jean-Jacques Lecat jean-jacques.lecat@cms-bfl.com www.cms-bfl.com T: +33 1 47 38 56 82 1 – 3, villa Emile Bergerat 92522 Neuilly-sur-Seine Cedex, France

perspective and dedicated service” (Chambers Global), “business minded approach” and good response time (IFLR 1000).

ABD has advised on OPIC and IFC loan / equity transactions, unitization agreements in respect of Ghana’s jubilee oil fields, Project finance advice for the development of $700m water infrastructure, , waste management infrastructure, resolution of disputes in respect of off- shore construction dispute in respect of the West Africa Gas Pipeline. Notably, ABD is working on developing Ghana’s first ever PPP legislation.

Key clients: Siemens, Alcatel – Lucent, Tullow , Shell , Stanbic Bank, GroFin , Cal Dive, Denys B.V, Odebrecht, Office of the Attorney General, World Bank, Ministries of Transport, Environment, Finance & Economic Planning.

Isabel Boaten isabel@abdavid.com www.abdavid T: (+233 30) 225 3073

Forming Futures Offshore

David Kinloch info@LabuanIBFC.my www.LabuanIBFC.my Tel: +60 3 2773 8977 3A-2, Level 2, Block 3A, Plaza Sentral Jalan Stesen Sentral, KL Sentral 50470, Kuala Lumpur, Malaysia

L

abuan International Business and Financial Centre (Labuan IBFC) is strategically located in the heart of Southeast Asia, the part of the world that is drawing huge attention for potential growth.

Acquisition International speaks to David Kinloch, CEO at Labuan IBFC Inc. Sdn Bhd about “ Forming Futures Offshore” “Aside from its cross roads location, Labuan is well regarded for its clear laws and its adherence to the issue of ‘substance’.

“The attractiveness of Labuan is additionally supported by its wide range of financial products underpinned by a simple tax system; an extensive double taxation agreement network (DTA); and a robust but flexible regulatory environment.

“The variety of products available at Labuan include Holding Companies, Trading Companies, Special Trusts, Purpose Trusts, Foundations, Private Trust Companies, Protected Cell Companies for both insurance and fund management, Limited Liability Partnerships and Captive Insurance.

“Another area in which Labuan excels is Islamic finance. As a major player in the Malaysian International Islamic Financial Centre initiative, Labuan sprinted ahead when it streamlined the host of principles governing Islamic finance. The jurisdiction’s position as a global hub for Shariah compliant business was assured when the Malaysian Parliament passed the Labuan Islamic Financial Services and Securities Act 2010, acknowledged as the world’s first omnibus legislation covering all aspects of Islamic financial products.

“Labuan IBFC has access to a large number of double taxation agreements (DTAs) signed

by Malaysia. To date, Malaysia has more than 75 comprehensive agreements signed, making it one of the largest treaty networks in the region and a very strong argument for companies to establish here.

“Labuan provides a simple tax framework within which Labuan entities carrying on a

Forming Futures

Offshore

Labuan Business Activity of a trading nature can opt to pay either 3% on net profits or a flat rate of US$6,500 whilst non-trading activities are not subject to tax. Other non-Labuan business activities which fall within the scope of the domestic Malaysia Income Tax Act pay the headline tax rate of 25%.

guideline issued in early 2010. The guideline, which allows Labuan banks to co-locate an office (or offices) in any part of Malaysia, opens up opportunities for banks that previously did not have a presence in Labuan as they now have the added incentive of operating onshore.

What are the legal requirements when it comes to setting up a company in Labuan?

“All Labuan companies are governed by the Labuan Companies Act 1990 under which these Labuan incorporated companies carry out either trading or non-trading activity in, from or through Labuan.

How willing is your jurisdiction to comply with international regulation?

“The increase in the number of Labuan companies formed, assets managed or leased, bank deposits, insurance and reinsurance premiums all indicate the increasing level of interest in Labuan. No less assuring is Labuan’s active membership in several international regulatory and supervisory associations, including the International Association of Insurance Supervisors, the Offshore Group of Banking Supervisors and the Asia Pacific Group on Money Laundering, to name a few.”

“The incorporation of a Labuan company must be done through a Labuan Trust Company. The application should be submitted together with the Memorandum and Articles of Association, consent letter to act as director, statutory declaration of compliance as well as payment of relevant fees.

“All Labuan companies, including those that require a financial services license (e.g.

Banking) as provided for under the laws of Labuan IBFC may apply to set-up a Marketing Office in Kuala Lumpur and/or in Johor Bahru to facilitate meetings with clients and to establish contacts with potential clients.”

What are the logistics of trading offshore and what support do you offer to your clients attempting to break into new markets?

“Banking services are undoubtedly the most important given that as much as half of the world’s capital is estimated to flow through international business and financial centres.

“In this respect, companies that set up in Labuan IBFC are more than adequately catered for as the jurisdiction is home to more than 60 banks, including 17 investment banks as of December 2010.

“Choice and convenience for investors have been further enhanced with a liberalization move under the Labuan Banks co-location

How has Labuan gained a reputation as a haven for asset protection?

“A pragmatic combination of clear laws that provide superior protection and certainty as well as flexibility in the way you do business has driven Labuan’s wholesome reputation.

For example, Labuan offers trusts (governed by common law) and foundations (under the civil law code), and both forms can be applied in an Islamic manner as long as they subscribe to Shariah principles. As Labuan trusts and foundations are highly flexible, covering many types to suit different needs, the jurisdiction’s wealth management products range from Purpose Trust, Special Trust, Charitable Trust, Private Trust Companies, to Foundations.

“Of special note is the re-modeling of our Trusts Act to meet modern needs. One interesting feature of the revised Labuan Special Trust is the distinct separation between the custodian role of the trustees and the management of the company which is the responsibility of the directors only. LST can be used for succession planning; commercial purposes; and avoid matrimonial disputes.”

Thirty Five

Maximising Business Value in 2012

Maximising Business Value in 2012 T

he lead feature in our next issue is directly targeted at business owners trying to ascertain the value of their companies in 2012. Business valuations can be required for many reasons, from tax and estate planning, bankruptcy, M&A transactions, shareholder disputes and even matrimonial disputes – but actually determining a company’s worth is a difficult task. Value can be based on assets, earnings and income, potential earnings and even the goodwill associated with the company name.

Business owners often struggle when trying to make a value assessment and find that their normal accountant or lawyer simply doesn’t have enough experience to properly assist, as a result it’s becoming more common than ever before to enlist the help of a business valuator.

Jeffery Chapman is a Director at BDO Transaction Advisory Services Inc, who specializes in valuation services and assists BDO’s transaction advisory team in M&A advisory and due diligence services.

Bruce Bingham is an executive director and national practice leader for valuation services at Capstone Advisory Group, LLC. Christopher Geier is Partner-in-Charge of Sikich Investment Banking and Chief Executive Officer of Sikich Corporate Finance, who specializes in business valuation, dispute advisory and investment banking services.

fund managers, public company CFO’s, controllers and tax leaders, bankers and transaction and bankruptcy attorneys.

History has proven that the type of assignments and who are clients are tend to be directly related to where we are in an economic cycle.

Fund managers need valuations throughout a cycle. If the markets are humming and transactions are numerous, we will see requests for transaction-related and strategic planning enterprise valuations and purchase price allocation reports. As the cycle heads downward, bankers may need collateral values and Chapter 11 bankruptcies may become valuation fights between the senior secureds and the mezz lenders.”

What are the most common reasons to enlist a business valuation specialist?

Bruce Bingham : The reasons can be put into the following “buckets”: transactions, financial reporting and litigation. The Transaction Bucket would include strategic planning valuations to help determine a price to ask for or to pay, tax-related valuations, fairness opinions and solvency opinions for transactions such as spinoffs. The Financial Reporting Bucket includes purchase price allocations and goodwill impairment tests and the Litigation Bucket includes expert reports and testimony on valuations, solvency opinions and fresh-start accounting.”

Christopher Geier : “Sikich is engaged by buyers, sellers and those seeking capital, as well as transactional attorneys and capital providers.”

Who normally engages your services– i.e. SMEs/large multinationals?

Jeffrey Chapman: “At BDO we service a broad range of companies. My group has worked with large multinational public companies with market capitalization that exceeds $2 billion (CND) as well as small and medium sized enterprises with equity values in excess of $5.0 million (CND). The majority of our clients generally have revenues in the range of $10.0 (CND) million to $200.0 million (CND).”

What are the most common reasons to enlist a business valuation specialist?

Christopher Geier : “Business valuers are frequently engaged for compliance reasons in taxation or proof of collateral.

Litigation also creates a need to prove damages. But the most frequent reason is corporate planning when a business needs genuine advice on its value today and what it might be tomorrow in a sale or a transfer to the next generation.”

Bruce Bingham : “Capstone is engaged by entrepreneurs, small business owners,

Why is determining a company’s worth such a difficult task?

Thirty Six

Bruce Bingham : “To folks who do this for a living, it isn’t that difficult. The approaches to value enable a valuer to determine indications of value from three different perspectives: the Cost Approach affords a value based primarily on the hard assets of the target business; the Market Approach looks to historical performance measured against the performance of comparable publicly traded companies; and the Income Approach reflects the value based on anticipated future performance. These approaches, when applied in compliance with professional standards such as those promulgated by the International Valuation Standards Council (IVSC) or the Uniform Standards of Professional Appraisal Practice of the Appraisal Foundation (USPAP), should lead to a reasoned, well documented opinion of value.

“There are, however, difficult aspects of each approach that can challenge even the most experienced valuer: getting appraisals of separate “hard” assets can be costly and difficult; selecting the right comparable companies and determining what “haircuts” should be given to the performance multiples is challenging; and vetting management’s forecasts and determining an appropriate weighted average cost of capital make the Income Approach particularly difficult.”

What is the best way to determine the value of tangible and intangible assets?

Intellectual Property, Due Diligence, etc.

Bruce Bingham: “The approaches to value I have mentioned above apply to the valuation of each of the items you cite. My best advice to user and preparer of valuations is “Stay in your Lane.” When I have a valuation involving real estate or machinery and equipment, I team with experienced valuers accredited in those asset types, and I incorporate their opinions as needed in my business valuation conclusions. Even though I have worked in many real estate projects and am familiar with how an M&E appraisal is done, it is dangerous and unprofessional to try to opine on values of those assets.”

Christopher Geier : “Many valuers are

Maximising Business Value in 2012 trained to apply a few rules of calculation and fail to recognize the big picture. Valuation is challenging because it requires an in-depth knowledge of the economy, investor sentiment for a particular industry, knowledge of the relevant business cycle, current and evolving technology – and ultimately where the subject company fits in the interplay of these forces.

and managing those expectations throughout the sale process is generally the advisor’s most challenging task. “

How does a business owner create maximum buyer interest and generate multiple offers?

Christopher Geier: “This is the role of the investment banker who identifies and contacts relevant financial and strategic “In this economy, once staid industries buyers and positions the company in such a have booming growth potential while the way to drive a highly competitive sale forecast for former hard chargers is bleak. dynamic.

Seeing beyond the conventional wisdom in a highly volatile environment is the art of “A recent example in the State of Illinois, valuation that keeps a valuer from concluding now a particularly strong market for the wrong answer and doing a disservice to agricultural businesses, especially grain the client. While the world economy is stuck handling and agricultural technology, proves in the doldrums, agricultural businesses in that the right investment banker can make all the Midwest region of the United States are the difference. Traditionally a low multiple enjoying a boom. A simple calculation of arena, the seller’s expectations were low given value based upon past profits or blind past history and a poor economy in the rest allegiance to past market multiples would of the nation. The advisor recognized the miss this opportunity.” boom in this market and assembled an auction of potential domestic and How does the business owner’s price international buyers, driving the ultimate expectations affect value and the price much higher than anticipated.” eventual sale of the company?

Jeffrey Chapman: “A carefully crafted Jeff Chapman : “A carefully crafted and and professionally run competitive auction professionally run competitive auction process is critical. Only then, when all process is critical. Only then, when all options are before them, can owners decide options are before them, can owners decide what the best avenue is, and only then can what the best avenue is, and only then can they have any degree of certainty that the best they have any degree of certainty that the best price has been obtained. In addition, this price has been obtained. In addition, this proven methodology generates a vendor- proven methodology generates a vendorcontrolled process where interested buyers controlled process where interested buyers are prompted to move ahead at the risk of are prompted to move ahead at the risk of losing the opportunity. This should avoid losing the opportunity. This should avoid costly loss of time, energy and focus for costly loss of time, energy and focus for owners, all of which could erode business owners, all of which could erode business value. At the important stage of mapping out value. At the important stage of mapping out the potential buyer universe, creative the potential buyer universe, creative outside–the-box thinking is key: all potential outside–the-box thinking is key: all potential strategic fits with various types of buyers strategic fits with various types of buyers should be explored.” should be explored.

“Financial buyers (private equity firms) should also be considered as a credible source of potential purchasers. A significant portion of the deals we close are with private equity firms. Also, while engaged with prospective buyers, the information conveyed should be properly presented and key investment considerations should be highlighted; professional drafting of the marketing documents is important. In summary, approaching a wide range of potential buyers and compelling communication will clearly help drive interest and value.”

Financial buyers (private equity firms) should also be considered as a credible source of potential purchasers. A significant portion of the deals we close are with private equity firms. Also, while engaged with prospective buyers, the information conveyed should be properly presented and key investment considerations should be highlighted; professional drafting of the marketing documents is important. In summary, approaching a wide range of potential buyers and compelling communication will clearly help drive interest and value.

Christopher Geier: “A business owner’s expectations seldom affect value; however these expectations always affect the sale of the company. The number one reason why transactions fail to find the finish line is the tension created when seller expectations collide with reality. Setting expectations early

What are your predictions regarding deal flow in 2012?

Jeff Chapman: “We are currently experiencing strong appetite for quality assets from both strategic and financial buyers.

On the sell side, we are seeing a growing

number of owner-managers contemplating going to market and educating themselves about the sale process. We believe these individuals will start making the decision to go to market in the next 12 to 18 months.

With recent economic recovery from the last two calendar years, we are seeing stabilization or growth of revenue and higher profits from our clients. Given the strong economic fundamentals in Canada, there is significant liquidity for Canadian companies.

Many owner-managers that are part of the baby boomer generation have started to recognize that succession is a very serious issue. I believe this generation is starting to believe they cannot wait forever for a market recovery that mirrors the pre-2007 levels. We feel this should result in increased M&A activity for 2012.”

Jeff Chapman jtchapman@bdo.ca www.bdo.ca Tel: 001 416 369 6122 123 Front Street, Toronto, Ontario, Canada

Bruce B. Bingham, FRICS, FASA bbingham@capstoneag.com www.capstoneag.com Tel: 212-782-1410 104 West 40th Street, New York, NY 10018

Christopher Geier cgeier@sikich.com www.sikich.com Tel: 312.648.6660 123 North Wacker Drive, Suite 1500, Chicago, Illinois USA 60606

Thirty Seven

Germany, a Location for International Arbitration

Germany a Location for International Arbitration

W

ith the last 2 years reaching record highs in cross-border M&A activity, international arbitration has never been hotter. It’s a constantly evolving and dynamic field and it is essential for arbitrators keep up with regional, technological and cultural developments within all of the areas they operate. Businesses all over the world are increasingly turning towards ADR mechanisms such as arbitration to settle disputes, moving away from the traditional approach of litigation via the courts.

Arbitration is time-saving, confidential and cost-effective; it has become a vital means of protecting commercial interests.

In a country with such a broad international reach, the German business community has always been—and remains among the primary users of arbitration. The country is an ideal location for settling international business disputes; German arbitration law provides a modern procedural framework and is based on an international recognized standard. As a worldwide leader in the international finance sector, Germany is home to a wide range of highly skilled practitioners, who are suitable to act as arbitrators in international arbitrations. Experts for all sectors of the economy are able to provide professional support for arbitral tribunals and parties.

Peter Homberg is Partner and Head of the Frankfurt office of Raupach & WollertElmendorff Rechtsanwalksgesellschaft mbH. Didier Matray is the Managing Partner of Matray, Matray & Hallet, an independednt Belgian law firm with offices in Liège, Brussels, Antwerp, Cologne and Paris.

Pease give a brief synopsis of your experience dispute resolution history.

Peter Homberg: “Various proceedings under ICC and AAA rules in the Life Sciences Sector”.

Thirty Eight

Didier Matray: “I am regularly appointed as arbitrator in ICC arbitrations.

I have as well a significant experience in DIS, CEPANI, OHADA, and ad hoc arbitrations. Matray, Matray & Hallet also acts as counsel for parties in arbitration proceedings, with a special focus on international disputes.”

Who normally engages your services– i.e. large multinationals/government etc?

Peter Homberg: “Companies of all sizes in the Life Sciences field” Didier Matray: “The Mittelstand forms the base of our clientele. However, in fields of activity where our excellence is particularly recognized – which is the case for our international arbitration practice – we often represent large companies as well.”

Why has the German business community always been and remains among the primary users of arbitration?

Peter Homberg: “It is the understanding of the German business community that arbitration is an efficient and competent way to settle complex disputes of all kinds.”

Didier Matray: “In my view, one of the reasons is that German companies occupy the first role on the scene of international trade. German companies receive orders from all the other countries in the world. In such an international setting, arbitration comes in handy. When you compare the risks and possibly the costs of initiating or defending a lawsuit in a foreign country (especially in some developing countries), an arbitration clause is almost always a prerequisite for the conclusion of a contract.”

Germany is an ideal location for settling international business disputes; can you please explain what factors have contributed to this?

Please use examples to illustrate your answer.

Peter Homberg phomberg@raupach.de www.raupach.de T: +49 69 7191884 0 Franklinstrasse 48, 60486 Frankfurt/Main

Didier Matray didier.matray@matray.be www.matray.be T: +32/4.252.70.68 Rue des Fories, 2 B – 4020 LIEGE, Belgium Peter Homberg: “Great number of legal experts in various fields who apply procedural rules in an efficient way, excellent infrastructure and highly sophisticated system regarding the recognition and enforcement of arbitration awards.”

Didier Matray: “The first factor is undoubtedly the reform of the law on arbitration in 1998.

Germany has incorporated almost all the provisions of the UNCITRAL Model Law in its Code of Civil Procedure.”

“The UNCITRAL Model Law reflects a worldwide consensus on the principles and important issues of international arbitration practice and is tailored to enhance the reliability and efficiency of arbitration as a mode of dispute resolution.

As a result foreign parties can trust the arbitration friendliness of the German law without the need to review it in depth.”

“Other factors such as the quality of German lawyers, the efficiency of the German courts supervising the arbitration proceedings and assisting the parties, as well as the excellence of Germany’s general infrastructures, have contributed to the success of Germany as a location for settling international business dispute.”

Can you please define Germany’s modern procedural framework regarding arbitration?

Please illustrate how it is based on

Germany, a Location for International Arbitration

international recognized standards within your answer.

Peter Homberg: “Arbitration in Germany, in particular under the DIS rules, is short in comparison to AAA proceedings. Legal experts and the respective infrastructure are sophisticated, and arbitration awards are usually rendered demonstrating significant expertise in various fields, in particular in technology disputes.”

Didier Matray: “Germany’s law on arbitration features all generally admitted principles of international arbitration, with one notable exception: multiparty arbitrations.”

“Arbitrators must remain independent and impartial (§ 1036 ZPO). Parties are entitled to a fair hearing and benefit from the right to be heard (§ 1042 ZPO). The separability of the arbitration clause and the principle of kompetenz-kompetenz are endorsed (§ 1040 ZPO). The parties can apply before the arbitral tribunal or before the courts for interim relief (§§ 1033 and 1041 ZPO). Appeal against an award is in principle prohibited and the award can only be set aside for limited reasons (§ 1059 ZPO).”

How has cross-border M&A activity affected demand for international arbitration in Germany?

Peter Homberg: “Cross-border M&A activities have indeed increased the demand for international arbitration.”

Didier Matray: “It is difficult to assess precisely. It is true that today, arbitration clauses are quite regularly encountered in merger transactions. Some reports assert that between 30 % and 40 % of the deals now contain an arbitration clause. Arbitration often deploys its advantages in international disputes and it can therefore be inferred that the growth of cross-border mergers will coincide with a higher demand for arbitration.”

significant impact on the turnaround time of documentations and information in general. It has also led to higher efficiency.”

Didier Matray: “In the field of arbitration, new technology has notably developed the means of communication. It is acutely felt in the manner the submissions and exhibits are gathered, exchanged, and consulted.”

How do you keep up with the ever changing regulation to ensure that you client is best informed?

Peter Homberg: “Using advanced information technologies significantly helps to receive competent information on changing regulations in our clients’ field of expertise.”

Didier Matray: “It is true that regulations can change quickly.

However these constant changes are paired with ever growing sources of information available. We regard our clients as partners.

We try therefore our best to alert them of any development that could be of interest to them.”

Although still considered a less expensive means of dispute resolution, there is growing concern that arbitration proceedings are becoming more costly both in time and money, what are your thoughts?

Peter Homberg: “Today, there is a tendency that arbitration proceedings, in particular under the rules of the AAA and ICC, are becoming more costly and less efficient than civil law procedures in some of the European countries, in particular in Germany.

Arbitrators have to apply respective measures in order to keep costs of arbitration proceedings on a reasonable level.”

Didier Matray: “It is a fact that Germany is one of the countries that has best overcome the global downturn. Germany is the locomotive of the European Union.”

Didier Matray: “Costs in arbitration proceedings have become a sensitive issue. Reports have been published in the recent past to illustrate this growing concern (e.g. recently the report published by the Chartered Institute of Arbitrators).

The Court of International Arbitration of the ICC is particularly keen to tackle the issue. In 2007, it published a report detailing the techniques for controlling time and costs in arbitration. Moreover, the new ICC rules of arbitration, which will enter into force in 2012, were drafted with the intent of enhancing the efficiency of the arbitration proceeding.”

How have advances in technology changed the way you work?

Peter Homberg: “Advanced information technology has a

“Companies have also evolved. More and more of them now insert multi-tiered arbitration clauses or rely on mediation in an attempt to reduce the costs associated with arbitration.”

How has the global downturn impacted both the type and the volume of work in Germany?

Peter Homberg: “The global downturn has no significant impact on the type and volume of dispute resolutions in Germany.”

Thirty Nine

Germany, a Location for International Arbitration

CASE STUDY EINTRAG

The Law Firm is specialised in • Cross border disputes between Companies involving German law and European law • Aviation law • Legal matters in connection with civil engineering/construction/ insurance Our clients are largely civil engineering Consultants operating worldwide, airlines from Arab and Asian countries and export driven companies International arbitration / mediation / adjudication Bertrand Prell has 25 years of experience in cross border dispute including arbitration and mediation. He is a qualified German Rechtsanwalt and English Solicitor specialising in international arbitration / mediation / adjudication.

English language. The process is intended to be shorter and less antagonising.

• An arbitration decision usually replaces a state court ruling and is final, i.e. not subject to an appeal.

• Mediation is chosen as a formalised attempt to settle a dispute out of court. Statistically 70% of disputes are finally settled in such way without the need of subsequent state court litigation.

• Adjudication is increasingly adopted by parties as a fast track dispute resolution process for disputes arising during long term complex projects driven by the time factor, often in large construction projects.

Such adjudication settlements resolve the dispute temporarily but does not affect the right of each party to refer the matter to a state court or arbitration tribunal after completion of the project.

Bertrand Prell

The benefits of alternative dispute resolutions are evident: The resolution process can be held “ad hoc” and at a preferred location. It is confidential. The panel of arbitrators / mediators / adjudicators is impartial, usually very professional and internationally experienced with proficiency in the required language, usually the

A

cquisition International speaks to Prof.

Dr. Hanns-Christian Salger, LL.M.the founding partner of SALGER about German Arbitration…

“Since 1983, I have been acting as party representative in arbitration proceedings as well as co-arbitrator, sole arbitrator, chairman, expert witness on German law and mediator.

Those arbitration proceedings were conducted under the auspices of ICC, DIS, LCIA, AAA, Swiss Rules and hoc. Most of the arbitration cases involved M&A transactions, construction and other commercial contracts. A few cases were IP related.

“The application of the Arbitration Act by the German courts has on the whole been supportive of arbitration.

One area where litigation practice is significantly different between Germany and England is the role of the judge in the context of settlement. Under the civil procedure rules, a judge has a duty to endeavour to achieve settlement between the parties. This commonly takes the form of the judge addressing both parties at the first procedural hearing, warning them of the risks and costs of litigation and indicating particular weaknesses in their cases.

“This duty has not been carried forward into the German Arbitration Act, although it does feature in § 32.1 of the DIS Arbitration Rules. It will be evident perhaps in a greater

Forty

willingness on the part of a German tribunal to become involved in settlement, and in particular to indicate an initial view of the strengths and weaknesses of the parties' positions. This will only ever be done with the express consent of the parties but, contrary to English experience, a tribunal's offer to do this would be regarded as a normal and acceptable part of its function and there may therefore be a greater cultural pressure to accept it. Again, this may be said to conform to a general tendency of judicial encouragement to settlement even in common law jurisdictions.

“While in particular with respect to smaller deals, M&A transactions often provide for decisions of German state courts in case of disputes, larger deals and deals where foreign parties are involved are mostly providing for arbitration, in particular with English as the language for the procedure. This may change to some degree when certain German courts will be allowed to hold proceedings (including witness statements etc. as well as judgements) in the English language as pending legislation provides for.

“In both litigation as well as arbitration, domestic and international, we do not see any decrease over the last ten years, and while M&A activities have sometimes almost come to a halt, parties have become even more prepared to go into litigation and arbitration to solve disputes and collect monies.

“Much less than with respect to transaction work (virtual data rooms etc.), arbitration has been effected by newer technological developments. However, it has become almost customary to ask the parties to provide their submissions not only in written form but also as a searchable "word" file. Also, witnesses are increasingly heard and examined by video conference (Skype), in particular when they live in great distance from the place of arbitration and their testimony is limited to a few facts that are not of a complex nature.

“In arbitration, the change in regulation, i.e. the change of German law or the rules of the major arbitration institutions is rather limited.

The new ICC Rules have been widely and thoroughly explained both in conferences as well as in several publications. As members of DIS (Deutsche Institution für Schiedsgerichtsbarkeit, German Institution of Arbitration), we are always kept informed about the newest developments.”

Prof. Dr. Hanns-Christian salger@salger.com www.salger.com T: +49-69-6640880 Darmstädter Landstr. 125, 60598 Frankfurt am Main, Germany.

Competition and Antitrust Risks in M&A Transactions

Competition and Antitrust Risks in M&A Transactions

A

ntitrust and competition issues are an important aspect to be considered when negotiating M&A transactions, especially in cross-border deals. It is important for prospective acquirers to be aware of any issues which may arise early on in a transaction in order to avoid any delay or complication further on in the acquisition process.

Acquisition International speaks to Sayenko Kharenko is one of the leading law firms in Ukraine.

Sayenko Kharenko's excellent reputation has been recognized by all major local and international legal directories and publications (The Lawyer European Awards, the Chambers Europe Award for Excellence, the International Tax Review European Tax Awards, Legal Awards for M&A, Corporate, Antitrust, Finance and Real estate by Yuridicheskaya Practika).

Please give a brief synopsis of the firm’s experience advising on Competition & Antitrust in Cross-Border M&A. “The firm excels in advising on competition/antitrust in cross-border M&A matters and is widely acclaimed for its innovative approach. Sayenko Kharenko is named the "Competition Law Firm of the Year" in Ukraine by the Legal Awards 2011 and is now the largest antitrust/competition practice in the country. We annually handle over 40 merger clearances, the vast majority of which have cross-border elements.

“According to Thomson Reuters and Mergermarket, the firm is No.1 by the number of completed M&A deals in Ukraine in 2010.

For the last five years the firm has been No.1 by the number of high-profile transactions according to Yuridicheskaya Practika (the largest Ukrainian legal publishing house), having handled 22 out of 50 major transactions in 2010.

“Among other unique highlights, the firm has handled the only merger clearance in Ukraine where the combined market share of the parties exceeded 35 per cent (the legal threshold for presumed dominance).”

Please describe a typical client?

“With respect to cross-border M&A transactions, we differentiate between two categories of ‘typical’ clients, depending on the form and the type of transactions. In the first category fall major multinational and local corporations whose main priorities are to swiftly receive merger clearance as well as

simplify the procedure itself by reducing the volume of documents and information required by the regulators. International law firms fall in the second category, with our lawyers working with all ‘magic circle’ and other major law firms from five continents in connection with M&A transactions handled by these law firms for their clients. Very often, the corporations that initially worked with us through a multinational law firm, engage us directly thereafter on any Ukrainian law matters. Both categories of clients put a strong emphasis on confidentiality and anti-bribery compliance.”

What does an antitrust legal adviser bring to the deal table? And how do you assist your clients in minimizing risks in M&A and in particular in cross-border deals?

“An antitrust legal advisor is crucial in analysing whether cross-border transactions require a merger clearance and, if yes, ensuring that the timing of regulatory approvals is reflected in the transaction documents so that there is no gun-jumping or the painful necessity to resort to carve-outs.

“Our team analyses a variety of risks – those of detection, investigation as well as prosecution risks – in case the merging parties do not want to file before the Ukrainian regulators or if their concentrations have to be consummated before the regulatory approval is given by the Antimonopoly Committee of Ukraine. Our team’s analysis is crucial to enable the management to make business decisions in the best interests of their corporations with respect to the M&A transaction at hand.

“Our expertise is also vital for defining correctly the relevant market (both product and geographic) especially in cases where clients have insufficient indicators of how large their market shares are in Ukraine.”

Have there been any notable deals that you have been involved in recently?

What challenges were presented to you in terms of antitrust risks?

“One particular transaction in the pharmaceutical sector really stood out for its complexity and the speed at which the merger clearance had to be obtained. Matters were further complicated by the fact that this particular industry is subject to intense scrutiny given its commercial significance and social importance. In fact, pharmaceuticals are on the regulators’ ‘top-priority list’ and are prone to

regular investigations. We were able to personally approach the officials of the Antimonopoly Committee of Ukraine and take other steps to ensure that a smooth merger clearance was obtained on an expedite basis.

“Another notable and quite challenging transaction involved a merger between the suppliers of raw materials to multinational tobacco companies resulting in the market share of over 60 per cent. We were able to persuade the regulator that the geographic boundaries of the market extended beyond the territory of Ukraine, thereby allowing the merger to be approved since there was no actual monopolisation of the market. Thus far, it is the only transaction cleared by the Ukrainian authorities where the combined market share of the parties exceeded 35 per cent (the legal threshold for presumed dominance).

“Finally, a good example of successful cooperation with the Antimonopoly Committee of Ukraine was the merger clearance for the acquisition of one major European airline, which was secured within eight days in view of the need to avoid pending bankruptcy proceedings.”

Have there been any notable changes in regulations within the field of antitrust/competition law? Do you have any predictions for 2012 in terms of this area of expertise?

“The regulators have introduced an electronic data system requiring merging parties to submit the required data on a CD. This enables the regulators to automatically compare businesses’ corporate structures, allowing them to uncover any unreported changes to control shareholdings between manifold mergers and acquisitions. The practical effect of this is that one should be more prudent to ensure that all concentrations which meet/exceed the Ukrainian financial thresholds are timely and duly approved by the Antimonopoly Committee of Ukraine.”

Dmitry Taranyk DTaranyk@sk.ua www.sk.ua T: +380 44 499 6000 10 Muzeyny Provulok, 01001 Kyiv, Ukraine

Forty One

France, a Location for International Arbitration

France, a Location for

International Arbitration W

ith the last 2 years reaching record highs in cross-border M&A activity, international arbitration has never been hotter. It’s a constantly evolving and dynamic field and it is essential for arbitrators keep up with regional, technological and cultural developments within all of the areas they operate.

Businesses all over the world are increasingly turning towards ADR mechanisms such as arbitration to settle disputes, moving away from the traditional approach of litigation via the courts. Arbitration is time-saving, confidential and cost-effective; it has become a vital means of protecting commercial interests.

France is recognised as one of the most arbitration-friendly jurisdictions in the world and the process has long been favoured as a method to settle both domestic and international disputes.

With such a large share of international arbitrations being conducted in France the arbitration process has taken on a very international flavour, making it an ideal location for settling international business disputes. The country introduced what was one of the first modern arbitration laws in 1981; however it still remains more progressive than some of the legislation introduced around the world since.

Kamal Sefrioui is Partner at Sefrioui Law Firm.

Please give a brief synopsis of your experience dispute resolution history.

Kamal Sefrioui: “Sefrioui Law Firm has been a leading Paris-based arbitration practice from its beginnings in 1969. We have acted in

dozens of international commercial arbitrations and developed a very specific expertise in the fields of construction, aviation, maritime law, investments and project finance.”

Who normally engages your services – i.e. large multinationals/government etc?

Kamal Sefrioui: “Our law firm has represented several Arab governments and public entities in their international disputes, relative to both their sovereign and commercial activities.

We also assist on a regular basis numerous companies, notably from North Africa, the Middle East and the Arab Gulf, including major industries, banks, airlines, in litigations involving their relations with Europe, North America and Asia.”

Why is France recognised as one of the most arbitration-friendly jurisdictions in the world?

Kamal Sefrioui: “France has historically granted a very high level of security to the arbitral process, providing both for an unlimited parties’ autonomy to organize the resolution of their dispute and for a reinforced protection of the independence of the arbitral institution. Statutory provisions, as well as a long-established case law, have produced a very supportive framework, notably as regards the critical issue of the enforcement of awards, that shall only be annulled on limited grounds and by a specialized court, the First Chamber of Paris Court of Appeal.”

France is an ideal location for settling

CASE STUDY ALAIN LE FEVRE

Allan Smith, is a former senior judge at Paris Court of appeal, retired since July 1st 2011. “ I was specialised in commercial law and have dealt with a lot of cases, mainly disputes between companies, involving the implementation of French law, but also EU law, and sometimes other laws of different countries, including UK, in various matters.

“The arbitration process is reputed to be shorter in duration than a process before courts, mainly because there is no right to appeal from the decision delivered by the arbitration tribunal in first instance, except if the parties decide so, which is rare, and because it is more flexible, the parties determining freely the rules of procedure, though frequently referring to existing rules for instance those of the International chamber of commerce ICC. Another factor of flexibility is the fact that the arbitrators are not strictly obliged to enforce the law as interpreted by the courts, acting as "amiable compositeur" ,i.e. resolving litigation in an amicable way.

Forty Two

Kamal Sefrioui contact@cabinetsefrioui.com www.cabinetsefrioui.com T: +33 1.47.66.11.00 72 boulevard de Courcelles, 75017 Paris, France international business disputes; can you please explain what factors have contributed to this? Please use examples to illustrate your answer.

Kamal Sefrioui: “The establishment of the ICC for almost ninety years, has also distinguished Paris as one the few places of arbitration with unlimited international vocation and the practical ability to host any cross-border arbitration, far beyond the regional scope. The international character of the institution is also very suitable for arbitrations implicating sovereign interests.”

Although still considered a less expensive means of dispute resolution, there is growing concern that arbitration proceedings are becoming more costly both in time and money, what are your thoughts?

Kamal Sefrioui: “Time should not be seen as negative, but rather than an asset in the field of international arbitration. The demand for a higher quality of justice, which is one of the parties’ main expectations when submitting a dispute to arbitration, is often satisfied through the introduction of some time-flexibility, in order to allow in-depth legal and technical researches that can materially alter the outcome of the arbitral process. Time is also highly favourable to the conclusion of consensual agreements, when parallel negotiations are being pursued. Time and costs are however closely related to the complexity of disputes, and parties often value the benefits of a specialized and confidential mean of settlement.”

“The French legislation is very favourable to arbitration because it recognises that the arbitration tribunal is master of all procedural disputes which may arouse during the process including those concerning its own "competence" or jurisdiction, also that the decisions of the arbitrators are immediately binding, and that the control of the courts over these decisions is limited to their validity in consideration of large principles such as the impartiality of the arbitrators and the fairness of the process. Therefore, the arbitration process is less uncertain than the process before the courts.

“Nevertheless, it is not necessarily less expensive. In fact, it is often very expensive. This matter depends on the parties' agreements.

“Other reasons for the choice of an arbitration process may be of diplomatic nature, when states or large companies of different states are involved.

“Laws change frequently but many publications deal with that matter, so it is not a very difficult problem.”

Kenya, a Location for International Arbitration

Kenya

A Location for International Arbitration

O

ver the last seven years, Christopher Kyania Nzili has been managing partner of C.K.NZILI & CO. ADVOCATES, a middle level law firm based in Kitui County. In Kenya, his main role has been to manage and undertake both litigation and commercial work for and on behalf of the law firm.

“Kenya established a law governing local and foreign arbitration in 1995 . The aim was to bring Kenya’s arbitral law and practice in tandem with international commercial arbitration norms and principles. These principles include an arbitration agreement, arbitrability , restriction as to right of appeal, public policy .

“The Kenyan law has also undergone some recent amendments. These amendments affect issues touching on parties to arbitration whether or not incorporated in Kenya, manner of exchanging documents electronically, manner of exchanging pleadings, power to include an extra arbitrator, election of a chairman to the arbitral panel, powers of the High court to intervene in setting a side any orders , powers

P

eter Scott is the Chairman and CEO of Britech Ltd., Consulting Engineers, based in Nairobi, Kenya.

“I joined the Chartered Institute of Arbitrators some twenty-five years ago and became a Member in 1999, Membership Number 13750. I have been involved in numerous Arbitrations, Adjudications and Mediations over the years as Arbitrator, Adjudicator, Mediator and Expert Witness.

I am a Registered Tutor of the Kenya Branch of the Chartered Institute of Arbitrators and often act as a tutor and occasionally as Course Director on a number of Alternative Dispute Resolution courses run by the Branch each year.

“I have been involved in many Adjudications most specifically during the implementation of the Kenya Urban Transport Infrastructure Project financed in part by the World Bank. I was also a

W

ith the last 2 years reaching record highs in crossborder M&A activity, international arbitration has never been hotter. It’s a constantly evolving and dynamic field and it is essential for arbitrators to keep up with regional, technological and cultural developments within all of the areas they operate. Businesses all over the world are increasingly turning towards ADR mechanisms such as arbitration to settle disputes, moving away from the traditional approach of litigation via the courts. Arbitration is time-saving, confidential and costeffective; it has become a vital means of protecting commercial interests. Acquisition International speaks to the experts.

of the High court upon challenge of the arbitral decision, circumstances in which there could be withdrawal of an arbitral, immunity of an arbitrator, issuance of interim orders to preserve the subject matter , fair hearing to parties, role of parties in expediting arbitral proceedings, powers of the arbitral panel to control the proceedings, clarification on the seat on arbitration, issuance of peremptory orders by the tribunal, the finality of the award, powers of the arbitral tribunal to award costs and expenses of the parties and the arbitral tribunal, computation of interest by the arbitral tribunal, clarification of ambiguities in the arbitral award, applicable law, recognition and enforcement of both local and foreign arbitration awards in accordance with the provisions of the New York convention, issues of fraud, bribery, corruption or undue influence and its impact on the arbitral award, intervention by the court of Appeal on points of law .

“The provisions of the Arbitration Act and the amendments thereof clearly show that Kenya’s arbitration law passes the test as uncitral model law compliant. It incorporates the two underlying principles of modern

member of the very successful Disputes Review Board for the multi-million dollar Ol Karia Geothermal Power Project in the Rift Valley of Kenya implemented by International Construction Contractors and Consultants for the Kenya Power Company.

Kenya has a well developed Arbitration Law which has recently been updated and improved with new legislation. The New Constitution of Kenya recognises the important role of Arbitration in the resolution of disputes outside of the Courts and makes specific reference to it. The Chartered Institute of Arbitrators, Kenya Branch has developed its own Arbitration Rules which are both comprehensive and highly respected.

They relate specifically to the terms of the Kenya Arbitration Act. Kenya's Arbitration Law complies with the UNCITRAL model and does not expire until 2016. Over the last five years Kenya has

international commercial arbitration namely; restrictive court interference with arbitral processes and two; the championing of party autonomy.

See section, 3See section, 4See section, 5See section, 6See

2

Arbitration Amended Act 2009, 7See section 3 (2), 8See section 5 and 9, 9See section 6, 10See section 11 (2), 11See section 12 (2), 12See section 12 (3), (4) & (5), 13See section 14 (3), (4), (5), (6), (7) & (8), 14See section 16 A, 15See section 16

B, 16See section 18, 17See section 19, 18See section 19 A, 19See

section 20, 20See section 21, 21See section 32 A, 22See section

32 B, 23See section 32 C, 24See section 34, 25 See section 35 (a) (ii), 26See section 36, 27See section 39.

As a result of the law reforms since 1996 and the recognition of commercial arbitration awards by the Kenyan courts , the caseload of arbitral awards has continued to grow.

Christopher Kyania Nzili c.knzili@yahoo.com T: 0722412502 P.O.Box 520-90400, Mwingi, Kenya

become a prime location for arbitration and dispute settlements in Africa with the registration of a Centre for International Dispute Resolution by the Chartered Institute of Arbitrators in Nairobi, the increase in the membership of the Kenya Branch and the improved competence of it's members through numerous in-depth training courses held regularly throughout the year.”

Peter F. Scott mdsurtech@swiftkenya.com www.surtech-aces.com Tel: + 254 733 618641 P.O. Box 15130, Langata, Nairobi, 00509, Kenya.

Forty Three

Pension Issues in M&A transactions’

M&A transactions’ Pension Issues in

P

Diane Dygert ddygert@seyfarth.com www.seyfarth.com Tel: 312.460.5941 131 S. Dearborn Street, Suite 2400 Chicago, IL 60603

ension issues can be of significant concern in mergers and acquisitions, and must be taken into account at an early stage as they may affect decisions as to both the price and the structure of the transaction. As pension liabilities increase and regulations have become more complex over recent years, this is likely to remain the case for the foreseeable future.

Prospective acquirers should be aware of the various complexities which can arise with any related pension arrangements. It is therefore imperative that the correct advice is sought from the offset in order to reduce the risk of a potential liability being disclosed post the Sale & Purchase Agreement.

Diane V. Dygert is a Partner in the Employee Benefits & Executive Compensation department of Seyfarth Shaw LLP. She has over 24 years of experience in the employee benefits area.

Mark Smith is Head of Pensions at Taylor Wessing LLP.

Mark Smith m.smith@taylorwessing.com www.taylorwessing.com Tel: 0207 300 4090 5 New Street Square London EC4A 3TW

Cynthia Chung is a partner at Deacons and the Head of Human Resources and Pensions Practice. She has been advising on pension issues in Hong Kong for over 15 years.

Please give a brief synopsis of your personal, and your firm’s experience advising on pension’s issues which may arise in M&A transactions.

Diane V. Dygert: “We represent our clients on the benefit aspects of their corporate transactions, often acting as special counsel in mergers and acquisitions, divestments, and joint ventures, partnering with legal, consulting, and other professionals.”

Mark Smith: “I have advised on pensions issues affecting M&A transactions for 15 years and my firm has done so for longer. We have advised on many significant transactions, including in 2011 for the buyer of Waterstone's from HMV and the Spanish buyer of the European and Chinese Auto Metals businesses of ThyssenKrupp.”

Cynthia Chung hongkong@deacons.com.hk www.deacons.com.hk Tel: +852 2825 9211 5th Floor, Alexandra House 18 Chater Road Central, Hong Kong 香港中環遮打道18號歷山大廈五樓

Forty Four

Cynthia Chung: “Our Human Resources and Pensions Practice comprises of one partner, three associates and a paralegal. We work very closely with our Corporate/M&A colleagues in M&A deals where employee/pension matters are involved.”

Please describe a typical client?

Diane V. Dygert: “Our typical client is a multinational or

Pension Issues in M&A transactions’ domestic corporation, varying in size from mid-sized private companies to multinational Fortune companies in key industry sectors such as manufacturing, retail, healthcare, insurance and financial services.”

Mark Smith: “We act for private equity and trade buyers and sellers, companies being bought and sold, and trustees of affected pension plans. Therefore, we have experience of advising on pensions issues from all sides.”

Cynthia Chung: “A typical client would be either party of an M&A transaction.”

How does your firm stand out from local competitors in terms of the services you offer?

Diane V. Dygert: “Seyfarth has one of the largest and most experienced Employee Benefits & Executive Compensation Departments in the country. Our size is unique and allows us to be efficient and responsive in a way that a small benefits practice can’t be.”

Mark Smith: “We provide a responsive, pragmatic, partner-led service that brings knowledge, innovation and experience to any M&A transaction.”

Cynthia Chung: “In terms of the services we offer, our team cover both employment and pension advice. Within our team, we have a combination of local and foreign experience.”

What does a pension adviser bring to the deal table?

Diane V. Dygert: “While due diligence is a necessary component of any transaction, a pension adviser can delve past the numbers or words on the sheet and efficiently identify how the deal will impact a company’s bottom line, as well as employee relations considerations.”

Mark Smith: “UK pensions law is very complicated and making a mistake can prove very costly. A good pensions legal adviser will understand the issues and apply them pragmatically and commercially, so the parties can manage resulting costs.”

Cynthia Chung: “A pension adviser would be able to bring to the deal table not only the regulatory advice, it also brings in knowledge of how to structure the employees' remuneration package, how to retain them in an M&A transaction and also in some cases contribute to discussion on the purchase price.”

How are you able to assist clients in minimizing risks in M&A related to pensions?

Diane V. Dygert: “Corporate acquisitions, divestitures or joint-venture transactions are part and parcel of today’s competitive economy. However, all carry a host of complex—and sensitive— employee benefit issues. Our attorneys are highly skilled at managing those issues in a manner that protects companies’ financial interests, employee relations, and public image.”

Mark Smith: “We identify the legal issues that have cost implications. If a reduction in price is not an option, we come up with creative solutions, such as indemnities, guarantees, and using technical pensions law options to apportion liabilities where appropriate.”

Cynthia Chung: “The best way to assist client in minimizing risks in an M&A transaction in relation to pensions is for us to understand the client's needs, the pension scheme and the relevant regulations and financial implications.”

Can you please define the key pension issues that must be addressed at the beginning of a transaction and how these issues can affect the price and the structure of the deal?

Diane V. Dygert: “Due diligence assessments of compensation and benefit plans assist the company in minimizing its legal risks in foreign jurisdictions and highlight areas that may become problematic in the future. Funding liability issues under benefit arrangements, contractual contribution requirements and flexibility in plan design or maintenance must be identified early on.”

Mark Smith: “The key is to identify whether any company subject to a

transaction, or those connected or associated with it, has ever operated a defined benefit pension plan. If it has, it will be important to assess the funding position of the plan, how any deficit will be made good and whether payment of any deficit will be crystallised by the transaction as early as possible. Also, the Pensions Regulator has power to intervene and require parties to make payments into the plan, so the risks in that regard need to be understood and managed.”

Cynthia Chung: “Some of the key pension issues that must be addressed at the beginning of a transaction are the type of the pension scheme and the benefits that it provides; how it interacts with the other employment issues; its financial position; whether or not there is any surplus or deficit in the scheme; the regulatory requirements for employee transfer.”

Have there been any notable deals that you have been involved in recently? What challenges were presented to you in terms of pension issues?

Diane V. Dygert: “Recently, a U.S. subsidiary of a French parent entered into an arrangement with multiple parties under which the U.S. subsidiary would manage the operations of a target company. We assisted in reviewing the proposed structure of the resulting arrangement to avoid pension liability.”

Mark Smith: “The challenges included apportionment of responsibility for funding the pension deficit that crystallised on the transaction, which was achieved using technical pensions techniques in a manner that brought results satisfactory to all parties.”

Cynthia Chung: “We have dealt with a number of transactions in the last 12 months but no particularly difficult issue was encountered.”

What makes you a leading player in this field of law?

Diane V. Dygert: “Seyfarth has a substantial team of approximately 50 dedicated, full-time lawyers specializing in

Forty Five

Pension Issues in M&A transactions’

employee benefits and executive compensation. This makes us comfortably one of the largest and most comprehensive such departments in the country.”

Mark Smith: “As well the deals mentioned above, I have recently advised three companies in the Lehman group, successfully defending them against action by the Regulator to provide funding for the group's defined benefit plan.”

Cynthia Chung: “My knowledge and dedication to this area of the law make me one of the leading players in this field of law.”

How have pension liabilities and regulations within your jurisdiction changed over the last 12 months? And how have these affected your role as an adviser?

Diane V. Dygert: “The Pension Protection Act has been in place for several years now, but implementing regulations are continually being issued. We continually educate, advise and counsel our clients on the most effective way to handle those evolving changes.”

Mark Smith: “Increased use by the Regulator of its powers, which

CASE STUDY ICHINO BRUGNATELLI Carlo Fossati is an attorney at law, admitted to bar since 1995, partner of Studio Legale Ichino Brugnatelli e Associati since 2006.

“When I joined the firm in 2003, I had already gained ten years’ experience with two domestic Law Firms, specializing in corporate law and labour law respectively.

“I regularly advise domestic and multinational companies on labour law issues related to mergers and acquisitions, restructuring and reorganisations, redundancies and downsizing. Company clients span from the banking and financial sectors to fashion, telecommunication, chemical and industrial sectors.

“National security issues arise with increasing frequency in crossborder transactions. In Italy, where strict law regulations leave little room to negotiations on pension issues, an advisor has to make aware the parties of what can be worked on and what not: it may be surprising to them , since in certain foreign Countries there are more different ways to deal with them than in Italy. I was involved in a deal recently, and my advice was to structure it as a sale and purchase of going concern. In such transaction, the purchaser can choose the Labour National Agreement to be applied, taking also into account its provisions on pension plans.

“My advice is focused on the awareness of advantages and

Forty Six

has brought that risk back to the forefront of M&A transactions.”

Cynthia Chung: “There has not been any notable changes in liabilities and regulations in Hong Kong on pension over the last 12 months.”

Do you have any predictions for 2012 in terms of this area of expertise?

Diane V. Dygert: “2012 is a presidential election year in the United States. As a result we do not expect to see any major new benefits or executive compensation legislation until after the election in November 2012.”

Mark Smith: “I would expect the Regulator to continue with its approach in 2012, which should also see the Supreme Court hearing an important point on the scope of the Regulator's powers, in the context of the Nortel and Lehman pension plans.”

Cynthia Chung: “We expect a steady flow of work in 2012. As we do not expect marked changes in this area of the law, we do not expect any substantial changes to our current practice.”

drawbacks that my clients are going to face, following up to that, we can work on price and structure of the deal accordingly.

“As regards the global crisis and my forecast for the next future, I believe that a reform strategy could stimulate productivity in Italy, all the more so in the current scenario, if the high regulatory burdens affecting the private sector can be cut.

“My forecasts for 2012 are not optimistic as far as global economy is concerned, but I still believe that every player in the market can become a winner despite all. Planning accurately the most detailed and realistic strategy is key, and if until few years ago the utmost effort used to secure a leading position in the market, now striving for perfection is just satisfactory to survive.”

Carlo Fossati tel. +39 02.4819.3249 fax +39 02.4810.0102 www.ichinobrugnatelli.it carlo.fossati@ichinobrugnatelli.it

Doing Business in Colombia Adriana Zapata De Arbeláez adrianazapata@cavelier.com www.cavelier.com T: (57-1) 347 3611 ext. 2225 Carrera 4 No. 72 – 35 Bogota 8, Colombia

A

ccording to the World Bank, Colombia ranks as the third most business friendly country in Latin America and first for investor protection. The country’s diversified economy and sophisticated local institutional investor network have propelled the country forward, capturing the attention of both global and regional fund managers. In October announced by Colombia’s Central Bank that foreign direct investment reached $11.54 billion for 2011 so far – most of which had been directed towards petroleum and mining sectors and it’s currently one of the hottest markets for savvy investors looking to tap into the region’s growing middle class, consumer market and rich natural resources.

Acquisition International speaks to Adriana Zapata, Director and partner of CAVELIER ABOGADOS. Established in 1953, CAVELIER ABOGADOS is a multi-specialty law firm that combines experience and innovation to stand out as a leading advisor in Latin America in every area of practice, including intellectual property, Corporate/M&A, Banking and Finance, Capital Markets, Contracts, Labor and Immigration, Tax and Exchange, Antitrust, Foreign Investments, Mining, Energy and Litigation and Dispute Resolution. The firm represents local and foreign clients from diverse sectors and industries, providing professional and comprehensive legal advice, as well as an optimal service, throughout all clients’ businesses cycles.

What factors are attracting companies and wealthy individuals to do business in Colombia? What are the key benefits?

“Some of the factors are of permanent character and some others are caused by juncture. Among the former are the development potential of new businesses; natural resources; geographical location; being one of the most important markets of Latin America; the orthodox and serious management of the economy; the stability of its political institutions; the respect to the “rule of law”. Among the factors of juncture we can mention: the projection of the emerging economies; the growth boom of the Colombian economy; the situation of the economy in the developed nations and the launching of the main free trade agreements.”

Doing Business in Colombia How does Colombia compare to other Latin American countries? Please highlight within your answer the pros ad cons of doing business in your jurisdiction.

“Among the regional economies, Colombia distinguishes itself for its richness and resources that are quite attractive for the investors. Uncultivated lands, hydrological resources; electric power generation, mining; biodiversity and a huge potential in fossil fuels. Legal stability is another of the positive aspects highlighted. In addition, although the country has made efforts to modernize the functions of the branches of public power, some sectors are a little backwards, for example in respect to the lengthy delays of the processes. Another aspect to underscore is that this country must implement in the future two structural reforms of utmost importance, namely a more efficient design of tax regulations and a reformation of the pensions regime.”

What steps over recent years has Colombia taken to actively diversify its economy to ensure continuing prosperity and growth?

“The diversification policy is a response to the adverse effects caused to our country by the dependence on a few export products such as coffee. For this reason, incentives were applied to sectors such as mining, power generation and an important space was given to the investment in agro industry. However, the growth and prosperity of the country will greatly depend on the ability of the government to implement the plan for modernizing its port infrastructure, which shows a delay of several decades.”

What are the key benefits of implementing a sophisticated local institutional investor network and how has it propelled Colombia forward capturing the attention of both global and regional fund managers?

“The existence of a network of local institutional investors has permitted the development of large projects, which because of the quantity of the investments, would not be feasible by other methods.

“This has attracted the attention of the administrators of funds and professional investors both local and foreign, for implementing in Colombia structures of private capital permitting the development of large scale projects in different fields, such as infrastructure, industry, commerce of goods and services, agro industry, among others, with the participation of institutional investors.”

What steps has Colombia taken to rank third as the most business friendly country in Latin America and first for investor protection?

“One of the pillars of the recent governments has been the so called “investors trust”, that consists on the offer of legal framework that incorporates high standards of protection to local and foreign investments. The growth of investments is greatly owing to this effort.”

In October it was announced by Colombia’s Central Bank that foreign direct investment reached $11.54 billion for 2011 so far, which sectors are currently attracting the most attention from foreign investors?

“Foreign investors are currently detecting opportunities in ample sectors of the Colombian economy. There is great interest in investment opportunities in infrastructure projects, hydrocarbons, forest industry and merchandising of goods and services.”

What are your predictions regarding foreign investment in Colombia over the next 12 months?

“In our opinion foreign investors will maintain the trend to consider Colombia as an important alternative in the field of investments. Consequently, we consider that in the next twelve months the rate of growth of foreign investments in Colombia will maintain or increase because of the large investment opportunities that have been arising in the different sectors of the Colombian economy, combined with factors such as the economic and political stability of the country, the existence of legal provisions affording stability to foreign investment, and the constant trend of Colombia in the improvement of competitive standards.”

Forty Seven

Turkey: Defeating the Odds

Turkey:

Defeating the Odds

S

ome of the main economic objections to Turkey joining the EU centred on the relative underdevelopment of Turkey's economy compared to the economies of other EU members. However, Turkey has reported a strong start to 2011 and is recovering from the global economic crisis quicker than some of its neighbouring countries. Turkey is said to have achieved the second-highest number of M&A transactions in the first half of 2011 among Central and Southeast European countries.

130 M&A transactions were reported to have been completed during the first six months of the year worth $6.5 billion and representing a 117% increase when compared with the same period in 2010.

The outlook for the remainder of 2011 for the Turkish M&A market remains overwhelmingly positive. Will this trend continue into 2012? Will Turkey continue to enjoy economic stability and growth or is the economy overheating? Acquisition International speaks to the experts..

Tunç Lokmanhekim is one of the founding partners of EL G Attorneys-atLaw (“EL G”), an Istanbul based firm that is best known for its M&A, corporate law and anti-trust practices. ELIG currently has 30 lawyers on board and is continuing to grow.

Please provide a brief history of your firm and outline your past experience in your specialist area?

Tunç Lokmanhekim: “The firm was established in 2002 and was renamed as ELiG in 2005. Since 2oo2 I’m the head of the firm’s M&A and corporate practices.

Throughout the years ELiG’s M&A team has advised many foreign and local clients, foreigners generally being on the buy side of the table. ELIG attorneys have also been involved in a significant number of

Forty Eight

restructurings and “divorces” in joint ventures. ELIG’s corporate law team is wellestablished and experienced in advising the Turkish subsidiaries of many multinationals on their corporate house keeping needs and almost on all Turkish law related issues.”

What gives you an advantage over local and global competitors in your areas of expertise?

Tunç Lokmanhekim : “Members of ELiG’s M&A team always bear in mind that persons sitting on the other side of the table are also working for the same goal and we are not representing clients in a dispute. I believe that this understanding gives the ELiG attorneys a more solution oriented and practical approach.”

Have there been any notable deals (size, complexity, duration, etc.) that you’ve been involved in recently?

Tunç Lokmanhekim : “The most recent sizeable M&A transaction ELiG was involved was advising Energo-Pro in their acquisition of five hydro power plants / projects in different parts of Turkey for Euro 307 million.”

Which Turkish sectors are attracting foreign investors?

Tunç Lokmanhekim : “Currently the energy sector is receiving the utmost attention from foreign investors as there are many projects / licenses for sale. A large number of projects had been licensed in the past to local investors however it turned out that not all of those local investors had the means to build and operate those projects and now they seek foreign investors with both the financial capability and the knowhow.”

What factors have driven Turkey to

achieve the second-highest number of M&A transactions in the first half of 2011 among Central and Southeast European countries?

Tunç Lokmanhekim : “As opposed to most of the countries in the Central and Southeast Europe, Turkey has survived with much less injuries from the recent financial crisis. This combined with its large potential for investment Turkey has become a safe harbour for investors looking into the region.

With Turkish economy strengthening day by day do you feel that this is the right time for the country to join the EU? Tunç Lokmanhekim : “I believe that both EU and Turkey must continue making their cost-benefit analysis. Turkey being outside the EU might have helped the Turkish economy during the recent crisis plus as things stand Turkey may remain as a more attractive market or even a safe harbour for investors those are unwilling to make investments in the EU.” On a lighter note, what is the best piece of advice ever given to you?

Tunç Lokmanhekim : “Always remind yourself to take a step back to look and remember what the client wants the big picture to look like.”

Mergers and Acquisitions Tunç Lokmanhekim tunc.lokmanhekim@elig.com www.elig.com T: +90 212 327 17 24 Citlenbik Sokak No:12 Yildiz Mah. 34349, Besiktas, Istanbul - Turkey

International Corporate Tax Analysis 2011 Giannos Ioannou Georgia.papa@eurofast.eu www.eurofast.eu T: +357 226 99222 5 Chytron Str. P.C. 1075 P.O.Box 24707 Nicosia Cyprus

I

n the last year, the global average corporate tax rate has dropped from 35% to 26%; with most international governments trying to encourage both domestic and international investment, we have witnessed many new measures imposed by tax authorities attempting to create a competitive tax environment. Corporate tax rates and rules change so frequently that they can pose quite a challenge to business operating in more than one territory.

When it comes to choosing where to do business, local corporate tax rates have quite a big sway and the various different regulatory environments around the world can be mapped in terms of how they benefit or hinder business growth and foreign investment. Acquisition International speaks to Georgia Papa, Tax and Legal Advisor at EurofastTaxand.

Please provide a brief history of your firm. What areas/sectors does Eurofast Taxand specialise in?

EurofastTaxand provides comprehensive tax advisory services in Cyprus and across the world since 1987. We work with a wide spectrum of clients including multinational and locally listed companies, mid-market companies and large private entities. Our portfolio includes a number of high net-worth individuals and clients engaged in every sector of the economy.

International Corporate Tax Analysis 2011 EurofastTaxand is part of Eurofast Global, a 220-strong international boutique professional services Group with its roots going back to over 30 years, delivering a range of professional services in South Eastern Europe and East Mediterranean through its fully fledged offices in Lefkosia, Athens, Thessaloniki Sofia, Bucharest, Belgrade, Podgorica, Tirana, Skopje, Zagreb, Pristina, BanjaLuca, Sarajevo, Cairo and Alexandria.

Eurofast is Taxand Cyprus. Taxand provides high quality, integrated tax advice worldwide.

Our taxprofessionals, nearly 400 tax partners and over 2,000 tax advisors in nearly 50 countries – grasp both the fine points of tax and the broader strategic implications, helping you mitigate risk, manage your tax burden and drive the performance of your business.

What gives you an advantage over local and global competitors in your areas of expertise?

“Eurofast understands that globalisation and the complexity of the business environment demandssophisticated and customised tax advice that meets the highest standards, delivered byexperienced professionals who put their clients’ best interest first. This is why we remain largeenough to offer a full range of technical services, but small enough to deliver a partner led personal service and advice with

Eurofast’s achievements 2011

Eurofast in recent years has achieved worldwide market recognition for its exceptional

tax advice, capabilities and innovation in the area of international tax planning.

In 2011 Eurofast has been voted:

• “Cyprus Tax Firm of the year 2011” International Tax Review (ITR) • “Tier One Tax Transactional Practice in Cyprus” by ITR In 2010 Eurofast has been voted:

• “Best Tax Practice in Cyprus 2010” by the European CEO Magazine • “Tier One Tax Transactional Practice in Cyprus” by ITR In 2009 Eurofast has been voted:

• “Cyprus Tax Firm of the year 2009” by ITR

• “Best International Tax Team in Cyprus” by World Finance Magazine • “Tier One Tax Transactional Practice in Cyprus” by ITR

a mission to delight our clients, not just satisfy!”

Have there been any notable deals in complexity and structuring that you’ve been involved in recently?

“We have been involved in a number of deals in the past year. A large project we were involved was for Certified Emission Reductions (CER) which was of significant value. We have used a lot of innovation in designing the tax structure to reach the ultimate goal which was that the CER was publicly traded in the Energy market. It was complicated to meet all the requirements and aims of the project and thus used legal entities from 6 different jurisdictions.

Another project we were involved was for implementing the EU Merger Directive. The value was significant. It was a long process that took 3 years to complete. The design was innovative as we had thought to apply the EU Merger Directive with a number of cross-border applications. The work entailed the complete legal restructuring and setup of new entities in France, Poland, Netherlands and Luxembourg.”

How common are tax disputes within your jurisdiction and how are they settled?

“Tax disputes are not very common in Cyprus. They are usually settled through negotiations with the Inland Revenue Department. If an agreement is not reached, they go to the Tax Tribunal and if not settled then the cases end up to the Courts, which have the final saying.”

How does your jurisdiction address and prevents tax avoidance?

“Cyprus has proceeded with the amendment of the Assessment and Collection of Taxes law in order to enclose the provisions of Article 26 OECD Model Tax Convention of 2005 in Double Taxation Treaties. The new legislative obligations of the Republic of Cyprus regards the disclosure of information and transparency [Law 72(I) of 2008] as far as Double Tax Treaties are concerned. Usually the Inland Revenue Department conducts tax audits as a measure to check that the relevant laws and rules are followed by the Companies.”

Forty Nine

Protecting Intellectual Property in M&A transactions

Protecting Intellectual Property in M&A transactions

D

ealmakers facing an M&A transaction should know all about what is often the company's most valuable asset: its intellectual property. Understanding how intellectual property rights are involved with M&A is essential given how M&A activity in the intellectual property field has come to dominate these transactions generally. It is key for prospective dealmakers to take every precaution in protecting their IP assets. As such it is of the upmost importance that companies seek professional and comprehensive advice specific to their needs.

William Mulholland is the Principle of william mulholland + co lawyers.; a boutique law firm based in Melbourne.

Alistair Gay is a UK and European Trade Mark Attorney and a Partner at Keltie LLP. He coheads the firm’s trade mark practice.

Masaki Ishioroshi is the representative partner of Ishioroshi & Associates.

number of IP licensing agreements including domestic ones and international ones.”

Who is a typical client?

William Mulholland: “Medium to large enterprises, individuals, partnerships, joint ventures, private and publicly listed companies, theatrical producers, entertainers, film producers, start-ups looking at commercialization strategies, industry associations, professional organizations and notfor-profit charitable organisations.”

Level 10, 160 Queen Street, Melbourne, Victoria, Australia

Alistair Gay alistair.gay@keltie.com www.keltie.com Tel: 020 7329 8888 Fleet Place House 2 Fleet Place, London EC4M 7ET

Alistair Gay: “There is no “typical” client as such. Our clients range from individuals, including celebrities, to SMEs and multi-national corporations, many being household names.”

Masaki Ishioroshi info@ishioroshi.com www.ishioroshi.com/english/indexe.html Tel: +81-45-444-2455

Masaki Ishioroshi: “Business areas of our corporate clients are manufacturers of many kinds of products (electronic devices, mobile phones, and foods), software houses, technology developing companies, international fashion brand houses, chain-style franchise businesses, restaurants, confectionery stores, e-commerce, record company, publishers, or retailers.”

Yokohama Higashiguchi Bldg. 4F, 2-10-13, Takashima, Nishi-Ku, Yokohama, Japan

Please give a brief synopsis of your personal, and your firm’s experience advising on IP law.

William Mulholland: “william mulholland + co lawyers has advised a number of clients on IP law for a range of individuals and commercial entities alike. We have assisted companies in dealing with key executive service agreements and confidentiality/restraint documentation to protect proprietary IP from ‘walking out the door’ as well as dealing with a host of IP issues arising under master service agreements and arrangements with independent contractors.”

What area(s) of Intellectual Property law do you specialise in; and what industry sector(s) do you focus on?

William Mulholland: “Copyright, trademarks, designs, confidential information, restraint deeds and minimizing IP theft, licensing and franchising. Industry sectors include arts, entertainment & media, light industrial, events industry, not-for-profit, transportation, IT, services sector including education, professional services and related services.”

Alistair Gay: “Keltie LLP is a top-tier London firm of UK and European patent and trade mark attorneys, based in the City of London. We work with a diverse range of organisations globally, in all fields of commerce and technology, providing comprehensive IP services and IP-related consulting services.”

Alistair Gay: “The core focus of our business is in the clearance of IP for use (freedom to operate opinions); filing, prosecution, registration and maintenance services; opposition and cancellation proceedings; portfolio management; IP audits and due diligence services; and litigation support.”

Masaki Ishioroshi: “We have provided advice regarding IP law including patents, trademarks, copyrights, and Unfair Competition Prevention Act for many corporate clients inside and outside Japan. We have drafted quite a

Masaki Ishioroshi: “Recently one of the areas where I especially have had acquired professional experiences is related to mobile telecommunication business, including providing advice regarding many aspects of legal

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William Mulholland info@wmulholland.com.au www.wmulholland.com.au Tel: +61 3 8676 5104

matters with respect to some mobile phone patent pools, cross licenses, technology standardizations.”

How does your firm stand out from competitors?

William Mulholland: “Our firm has a specialized, highly personalized and commercially focused approach with the ability to leverage external expertise and counsel as and when required. We have experience in IP law from deal structuring and transactional work to commercial litigation and dispute resolution. We take pride in offering a complete IP law service offering.”

Alistair Gay: “We are widely recognised for our no-nonsense, commercial approach to IP matters and our ability to handle international IP projects under extreme time pressure, presenting reports and advice in a concise manner that can be digested easily by other professional advisers and clients alike. In particular, clients have said that we are “professional, commercially astute and knowledgeable” and have “a breadth of sectorial expertise”.”

Masaki Ishioroshi: “Our firm is a small firm consisted of 6 attorneys and some paralegal

Protecting Intellectual Property in M&A transactions staff. We, therefore, can provide professional advice regarding IP not only for big international businesses but also for small companies that do not afford to retain a big law firm.”

What does an IP adviser bring to the deal table? How important is their role? Please draw upon examples to highlight your answer.

William Mulholland: “Whether a client is looking to conduct a due diligence on the value of a proposed target (such as a web start-up), entering into a license agreement to expand the territorial reach of an untapped market for goods or services, or looking to enter into a full-blown franchising structure to storm a domestic and then global market (e.g. the successful ‘Gloria Jeans’ franchise), an IP advisor is essential to navigate and advise on key aspects of any deal and transactional documentation.”

Alistair Gay: “We can perform various tasks for organisations wishing to acquire IP or to invest in businesses with IP assets, such as venture capitalists. We also work with organisations wishing to attract investment, helping to ensure that their IP assets will withstand the scrutiny of due diligence by potential investors.”

Masaki Ishioroshi: “There are a lot of things that an IP adviser should and can do. First he/she needs to assess ownership, validity, duration, and other factors of the related intellectual property rights. It is also necessary to review which portions or areas of the relevant business are covered by relevant intellectual property rights. If the main business of the targeted company is related to licensing of IP (whether such company is a granter or a grantee), review of license agreements is also important. Concerning an agreement, the term, exclusivity, geographical areas and business areas covered by the agreement, validity of such agreement (including conflict with antitrust laws), and other factors need to be checked.”

Why is a company’s intellectual property such a valuable asset? What steps should a company take in protecting their IP? William Mulholland: “A company’s IP is one of its most important assets because it can be the basis for driving the company’s value proposition, asset base and its brand equity ranking. The very first thing a company should do is to conduct an IP Audit so that it can methodically identify the IP assets it has on hand.

Such an audit needs to be comprehensive and include registrable rights (eg trade marks), nonregistrable rights (eg copyright) and equitable

rights (eg confidential information, trade secrets etc). Once an audit has been conducted then a company can seek the necessary advice from an IP advisor in prioritizing and developing a strategy for the protection and commercial exploitation of its IP asset base.”

Alistair Gay: “The success of many businesses, particularly in the technology sectors, is underpinned by their innovative products and services. Unless that IP is cleared for use, to ensure that third party rights are not infringed, and subsequently protected where the IP is clear for use and registrable, the investment of the company in its research, development, marketing and promotion of its products and services may be lost, or used by competitors to their advantage. Our specialists clear IP for use and deal with the filing and prosecution of IP for registration on a daily basis. We also advise on IP management issues including reviewing internal IP policy, IP disclosure and review processes and competitor analysis.”

Masaki Ishioroshi: “There are many reasons one if which is; If such company’s intellectual property is a patent or patents that cover the entire area or the core of its business, such company would be able to exclusively carry on such business in a market. A company should do many things to protect their IP. First it has to identify intellectual property that it has or possibly has. Of course as to registerable property such as a patent, if it is applied or registered, it is easily identified. But taking a closer look at the business that the company currently conducts, other intellectual property could be found. It should be considered how such intellectual property could be protected. For some filing an application for a patent, a trademark or other registerable right could be proper or effective.

Some could be more effective if it is kept confidential as a trade secret than if it goes public e.g., by applying for a patent.”

Companies involved in M&A often overlook the intrinsic value of their own IP? Why is this? How are you able to assist prospective clients in this way?

William Mulholland: “During an M&A process some companies in a flurry of excitement overlook the value of an intangible asset base, which on occasion is not as easily valued or measured, in favour of tangible and realizable assets. For other companies, it can be simply an oversight or basic failure to grasp the value of an IP asset base and how extensive it can be.”

Masaki Ishioroshi: “There are many reasons. For example, in a Japanese company,

in principle, intellectual property rights are not recorded as assets in its balance sheet unless such IP is bought from others. Another reason seems to be that some important portion of their own IP is limited to know-how of their business so even their top management does not recognize the value of such IP. One of the way in which we can assist our clients is to help them make clear what IP they currently have whether it is registered or not, and also is to help them find out their unnoticed but valuable IP worth protecting by means of interviewing them from a professional legal viewpoint and reviewing in detail their business.”

What are your predictions for IP law in your jurisdiction over the coming months?

William Mulholland: “In Australia we will start to see the effect of the Personal Property Securities Act 2010 (Cth) (PPSA) and the introduction of the Personal Property Securities Register (PPSR) having an impact on business including those businesses that license, commercialise or deal in IP. Personal property includes intangible assets such as designs, patents, plant breeder’s rights, circuit layouts, copyright and any right under the law of a foreign country that corresponds to the rights previously mentioned.

Any business engaged in licensing/franchising or looking at corporate structuring for the commercial exploitation of IP will need to take advice on the impact of the PPSA and any registration requirements under the PPSR.” Alistair Gay: “The recent changes in procedure and resulting success of the Patents County Court (“PCC”), which can handle claims relating to intellectual property (trademarks, designs and copyright – not just patents), has given IP owners a cheaper and more streamlined forum for litigation than litigation before the High Court. With greater choice of forum/procedure and the availability of cheaper litigation, it is more important than ever that those companies have their IP in good order: cleared for use and, where appropriate, registered.”

Masaki Ishioroshi: “Japanese Patent Act was amended on May 31, 2011 and is expected to enter into effect in 2012. The amendment this time will enable a licensee of a licensed patent to assert their license against the subsequent owner of such licensed patent without the said registration. We believe that this amendment could further contribute to promoting technology innovation, exploitation of patents.”

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A Location for International Arbitration

A Location for

International Arbitration A

s our global economies have become increasingly intertwined the number of international commercial disputes has mushroomed and in the wake of the global economic crisis these disputes are more complex than ever.

We’re all by now aware of the effectiveness of arbitration to resolve international conflicts and why it is favoured over alternative methods of dispute resolution; but what is becoming increasingly important, particularly for multinational companies is the effect of a particular location and how its arbitration framework can impact upon the ability to reach a resolution.

Paul Friedland is Head of International Arbitration Practice Group for White and Case LLP. Arnoldo Wald is the founding partner of Wald e Associados Advogados.

Mitchell L. Lathrop is Member (Partner) at Mintz, Levin, Cohn, Ferris, Glovsky, & Popeo, P.C. Gagan Anand Esq. is Senior Partner of Legacy Law Offices.

Richard Chalk is Partner at Freshfields Bruckhaus Deringer.

Ulf Hårdeman is Partner of Advokatfirman Dephi and also head of Delphi’s desk for Eastern Europe and the CIS. Robert Neron is founder, president and CEO of Simner Corporation, an international arbitration firm located in Ottawa, Canada.

Please give a brief synopsis of your experience dispute resolution history.

Paul Friedland: “I have served as counsel or arbitrator in numerous international arbitrations, both commercial and investor/state. I hold leadership positions at the American Arbitration Association and the International Bar Association, and formerly at the LCIA.” Arnoldo Wald: “For the past 50 years I have

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acted as a litigator and legal expert in litigation cases, and in the last 30 years also as an arbitrator, counsel and legal expert in domestic and international arbitrations.”

Mitchell L. Lathrop: “I have served as a mediator, sole arbitrator, party arbitrator or counsel in over 150 mediations and arbitrations in the United States and abroad over the past 30 years. I am admitted to the practice of law in California, New York, the District of Columbia, and before the U.S. Supreme Court.”

Gagan Anand: “In my current role as Senior Partner of Legacy Law Offices, the dispute resolution work handled by the team of lawyers led by me pertains to infrastructure projects implemented through the Engineering, Procurement & Construction (EPC) Contracts as well as in the Public Private Partnership (PPP) formats. Quick resolution of disputes is the key to timely implementation of infrastructure projects.

The other segment of the dispute resolution work executed by the Team Legacy pertains to disputes between Joint Venture Partners, one of whom is mostly a foreign company.”

Richard Chalk: “I head the Asia dispute resolution practice of Freshfields Bruckhaus Deringer, based in the Hong Kong office. My specialist areas include international arbitration and I have acted in institutional and ad hoc international arbitrations in a variety of venues both as counsel and as arbitrator.”

Paul Friedland pfriedland@whitecase.com www.whitecase.com/pfriedland Tel: + 1-212-819-8917 1155 Avenue of the Americas New York, NY 10036-2787

Arnoldo Wald aw@wald.com.br www.wald.com.br Tel: + 55 11 30 74 60 00 Av. Brigadeiro Faria Lima, 3729, 7th floor, Itaim Bibi, São Paulo-SP, Brazil.

Mitchell L. Lathrop mllathrop@mintz.com www.Mintz.com Tel: 1.212.692.6707 or 1.619.985.8262 Chrysler Center, 666 Third Avenue, New York, New York 10017, USA

Gagan Anand Esq. anand@legacylawoffices.com www.legacylawoffices.com Tel: 0091-9988198262 1207, 12th Floor, Chiranjiv Tower, Nehru Place, New Delhi- 110019, India

Richard Chalk richard.chalk@freshfields.com www.freshfields.com Tel: +852 2846 3400 11th Floor Two Exchange Square, Hong Kong

Ulf Hårdeman ulf.hardeman@delphi.se www.delphi.se Tel: +46 8 677 54 00

Ulf Hårdeman: “My experience includes more than 15 years of practice as counsel and arbitrator in domestic and international arbitrations, with particular emphasis on eastwest disputes and disputes within the oil & gas and energy sector, including pricing disputes.”

P.O Box 1432, 111 84 Stockholm, Sweden

Robert Neron: “I am a senior lawyer and arbitrator with over eleven years’ experience in arbitrating cases. In 2000, the Parliament of Canada appointed me, at age 34, a full-time adjudicator of the Immigration and Refugee Board of Canada, and I subsequently became Assistant Deputy Chairperson.”

Robert Neron info@simnerimmigration.com www.simnerimmigration.com Tel: (613) 686-3002

Who normally engages your services – i.e. large multinationals/ government etc?

1807-200 Rideau Street, Ottawa Ontario K1N 5Y1, Canada

A Location for International Arbitration

Paul Friedland: “Our clientele comprises large multinationals and State/State-entities across a wide spectrum of industry sectors, particularly in the construction, energy, investment and commercial fields.”

Arnoldo Wald: “Wald e Associados Advogados is recognised for providing highquality legal services to most of Brazil’s major corporations and to numerous multinational companies.”

Mitchell L. Lathrop: “I have served as a mediator, arbitrator and counsel for a wide variety of U.S. domestic and large multinational companies.”

Gagan Anand: “Our services are normally engaged by large multinational and domestic companies as well as by various departments of Central and State Governments in India.”

Richard Chalk: “Large multi-national corporations, global financial institutions and governments.”

Ulf Hårdeman: “Frequent clients are Swedish as well as multinational corporations.”

What makes you the right arbitrator for your clients?

Arnoldo Wald: “I have 30 years of experience in international and domestic arbitration acting as arbitrator, counsel and legal expert. I have also acted in various state-court proceedings related to arbitration. I am a member of the ICC International Court of Arbitration, the editor-in-chief of “Revista de Arbitragem e Mediação”, have given talks in conferences, and written several books and articles on the subject.”

Mitchell L. Lathrop: “I have a background of over 40 years as a lawyer and a litigator of complex business and securities matters, I bring a broad range of skills to my arbitration practice.”

Gagan Anand: “In depth understanding of the arbitration laws and practical knowledge of the prevailing arbitral procedures in India, positions me well as the right arbitrator for clients.”

Richard Chalk: “I have a long history of experience in the region which, combined with my previous experience in the UK, gives me an international perspective with an appreciation of local nuances.”

Richard Neron: “My expertise and experience as arbitrator, my abilities to listen and to narrow down issues and, my ability to render fair and well-reasoned decisions in a timely manner make me the right arbitrator for my clients.”

What is your current arbitration caseload and where is the source? Please highlight

your answer with examples.

Paul Friedland: “Our Group currently handles some 180 international arbitrations with a total value in dispute of over US$50 billion.

These cases are a mix of commercial, investment, construction and insurance arbitrations. Most of our cases are confidential and cannot be disclosed. The investor-state cases before ICSID are a matter of public record. We are currently counsel in more than 30 such cases.”

Arnoldo Wald: “Currently I act as counsel in 20 arbitrations administered by the main international and local institutions, such as the ICC, ICDR, CCBC, CMA, CAMARB and FGV. I also act as counsel in state-court proceedings related to arbitration.”

Mitchell L. Lathrop: “I am currently serving in one arbitration in Singapore, two in Tokyo, and one in London.”

Gagan Anand: “Currently, Legacy Law Offices is handling over 50 arbitration cases, out of which 38 pertain to the disputes arising out of contracts for the development of infrastructure projects and the remaining pertain to disputes arisen during the course of commercial trade including import-export and valuation disputes between the joint venture partners, shareholders etc.. I also acted as the Sole Arbitrator in a couple of cases.”

Richard Chalk: “Our cases are primarily based on investment and joint venture disputes, including shareholder disputes relating to joint ventures. These cases are both China-related and from the wider region. We handle cases throughout Asia, with the majority of cases seated in Hong Kong and Singapore.”

Can you please explain the regulatory frameworks in place within your jurisdiction that allows you to attract international cases?

Paul Friedland: “New York is the main arbitration centre in North America. It has long been an established place of arbitration for commercial and financial disputes, as well as disputes in the maritime and insurance sectors.

New York is also emerging as one of the preferred seats of arbitration for disputes with a Latin America nexus. New York is an arbitrationfriendly jurisdiction. The courts of New York consistently interpret the legislative framework governing arbitration in a liberal way and as articulating a strong pro-arbitration policy, especially in international transactions.”

Arnoldo Wald: “Brazilian courts have taken a clear position in favour of arbitration, rendering important decisions regarding various matters, such as flexibility in the enforcement of arbitration agreements and arbitral awards, the extension of arbitration agreements to nonsignatory parties, the arbitrability of disputes involving state entities and insolvent parties.

Further, legal and economic changes have given

rise to a new scenario which may encourage Brazil to engage in investment treaty arbitration.”

Mitchell L. Lathrop: “I have served in arbitrations under the rules of most of the major arbitral providers, including the International Chamber of Commerce, the London Court of International Arbitration, the Singapore International Arbitration Centre, the International Centre for Dispute Resolution, and the American Arbitration Association.”

Gagan Anand: “The Arbitration & Conciliation Act, 1996 is the legislation which regulates the conduct of arbitration proceedings in India. The legislation is largely modeled on the UNCITRAL Model Law on international commercial arbitration. The dominant features of the aforesaid legislation are that it recognizes the autonomy of the parties in the conduct of arbitral proceedings. The legislation promotes transparency in the matter of decision making by the arbitral tribunal by providing that the arbitral tribunal shall give reasons for its arbitral award.”

Richard Chalk: “The new Arbitration Ordinance came into effect on 1 June 2011, abolishing the dual regime for ‘international’ and ‘domestic’ arbitrations, with the Model Law applying throughout. The new regime is designed to reduce judicial intervention, and permits more effective use of interim measures, which will all add to the attraction of Hong Kong as an international seat.”

Ulf Hårdeman: “Sweden is not a model law country, but the Swedish Arbitration Act of 1999 reflects generally the main concepts of the model law and is seen as modern and efficient legislation. Sweden is a party to the 1958 New York Convention. Proceedings are to some extent influenced by Swedish procedural law and an important role is also played by the institutional rules that may apply, such as the ICC Rules or the Rules of the Arbitration Institute of the Stockholm Chamber of Commerce (“SCC Institute”).”

Richard Neron: “Canada has a long history of neutrality, diversity, multiculturalism, bilingualism, and a bijudicial system of common and civil law. It is also a party to the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards.”

How has the global economic crisis affected the nature and volume of disputes? And how have you responded?

Paul Friedland: “The global economic crisis created a surge in international disputes, however the “tidal wave” which some were predicting did not eventuate. We saw an increase in financial-related disputes, investment claims, as well as commercial actions involving parties searching for imaginative ways to escape their (no-longer attractive) long-term contractual obligations.”

Fifty Three

A Location for International Arbitration

Arnoldo Wald: “The global economic crisis of 2008 triggered the increase of arbitrations in Brazil, especially regarding corporate disputes.

According to the data provided by the main arbitral institutions in Brazil, approximately 200 commercial arbitral proceedings commenced in 2009 and in 2010. Moreover, according to ICC caseload statistics, as far as the nationality of the parties involved in arbitration is concerned, Brazil ranked first in Latin America in 2006, 2007, 2008 and 2009 and fourth in the world in 2009.”

Mitchell L. Lathrop: “The global economic crisis has resulted in a significant increase in commercial disputes which involve international arbitration. Disagreements which would have been settled promptly and amicably between the parties are now being referred to arbitration.”

Gagan Anand: “The adverse impact of global economic crises has not been much on the Indian economy and particularly on the dispute resolution practice in India, except on account of disputes pertaining to cancellation of few goods import orders from Europe & Americas.”

Richard Chalk: “The global economic crisis has resulted in an increase in the number of Crisis-related disputes, and we have seen a number of cases commenced simply to put pressure on the counterparty to pay up, rather than because there is a genuine dispute between the parties on the merits of the claim. We have also seen an increase in regulatory matters, and in response, we have expanded our contentious regulatory practice.”

How does your jurisdiction stand out as a location in which to conduct international arbitration? Can you please define the socio-economic/political environment within your answer?

Arnoldo Wald: “Brazilian courts have taken a pro-arbitration position. In 2011, the Third Chamber of the Superior Court of Justice (STJ) decided unanimously to reverse a lower court decision which mistakenly considered an ICC arbitral award rendered in Rio de Janeiro as a “foreign award”. The decision clarifies that arbitral awards rendered by arbitral tribunals seated in Brazil are domestic, irrespective of whether the applicable arbitration rules belong to an institution seated abroad, and that such awards need not be confirmed by the STJ.”

community and proactively takes steps for fine tuning its laws to address the requirements of international investors. The amendments to the Arbitration & Conciliation Act, 1996 which are in pipeline, would be a landmark step for positioning India as a preferred location for conducting international arbitration.”

Richard Chalk: “Hong Kong has very good infrastructure, specialist arbitration judges, an excellent range of arbitrators to choose from and is pro-arbitration. Hong Kong is undoubtedly one of the leading international seats, especially when it comes to complex, high-value disputes.”

Ulf Hårdeman: “Stockholm has since long been a popular place for east-west disputes.

Despite the changes in the political environment following the ending of the cold war, Stockholm has maintained its attractive position. The statistics kept by the SCC Institute show a steady increase of international cases of which many are related to Russia and the CIS as well as to China.

The number of BIT and ECT investment disputes is also increasing. ” Over the next 12 months, are there any impending amendments to the law which will maintain your jurisdiction as a leading international arbitration venue?

Paul Friedland: “I know of no impending amendments to the law in the next 12 months, but the New York City Bar Association recently endorsed a proposal to establish a permanent hearing centre dedicated to international arbitrations in New York.”

Arnoldo Wald: “There are no impending amendments to the Brazilian Arbitration Act (Law No. 9307/96). Currently, the Brazilian Chamber of Representatives is discussing a legislative bill of a New Code of Civil Procedure.”

Mitchell L. Lathrop: “The U.S. Supreme Court has consistently enforced international arbitration agreements and awards. No change is foreseen in that position.”

Gagan Anand: “Yes, the Arbitration & Conciliation Act, 1996 is likely to be amended in the near future which would provide an entirely new face and impetus to the concept of arbitration in India.”

Mitchell L. Lathrop: “Both jurisdictions of New York and California have a variety of qualified arbitrators with varying educational and experience background, as well as excellent facilities for holding arbitration proceedings.

Access to the courts is readily available when needed, and the United States has a strong public policy in favour of arbitration.”

Richard Chalk: “As mentioned, the new Arbitration Ordinance has come into effect. It is intended to bring into place a unitary system for arbitrations, compared to the previous regime which was bifurcated into domestic and international arbitrations. This will increase the overall volume of Hong Kong arbitrations conducted under the Model Law regime, contributing positively to the overall development of international arbitration in Hong Kong.”

Gagan Anand: “The Government of India is responsive to the needs of international business

Although still considered a less expensive means of dispute resolution, there is

Fifty Four

growing concern that arbitration proceedings are becoming more costly both in time and money, what are your thoughts?

Paul Friedland: “International arbitration has many benefits as a means of dispute resolution, but time and costs are often no longer among them. Various task-forces, including at the leading arbitration institutions, have been set up to look into these issues. This trend can be reversed. This does not mean, however, that international arbitration is more costly or longer than comparable commercial litigation. Beyond time and cost considerations, the key advantage of international arbitration is that it offers an alternative to the national courts that contracting parties wish to avoid, or cannot agree upon.”

Arnoldo Wald: “For a long time, arbitration has been considered an elitist solution for greater disputes due to its high costs and few experts in the market. However, this scenario is changing, and arbitration is becoming a democratic mechanism for dispute resolution. Currently, the number of arbitrations involving labour issues, leasing agreements, commercial representation agreements and consumer contracts has increased.”

Mitchell L. Lathrop: “The concerns are well-founded. Arbitration panels have been far too lax in permitting US-style discovery, which slows up the process and frequently makes it almost as expensive as litigation. The key is in the selection of arbitrators who will act promptly, limit discovery to that which is essential, and make rulings quickly. Oversight organizations must also act promptly to review and approve awards.”

Gagan Anand: “While I agree that arbitration proceedings are becoming more costly both in time and money, these are stills much cheaper as compared to various other places such as Singapore, Paris, London etc.”

Richard Chalk: “Some institutions have amended their rules and procedures to deal more effectively with case management, with penalties imposed on recalcitrant participants in terms of costs orders. Overall, there is certainly greater awareness among both arbitrators and counsel of the need to be alive to the major concerns of the users of arbitration and to address these concerns.”

Ulf Hårdeman: In general, arbitrators in Sweden are well aware of the need for cost efficient proceedings. It is really a matter of balancing the need for expedient proceeedings with the requirement of ensuring due process and in most cases this is done well by Swedish tribunals. Compared to court proceedings, arbitration is in fact often a more efficient way of resolving disputes, both with regard to time and cost. ”

A Location for International Arbitration

CASE STUDY VANCOUVER, BRITISH COLUMBIA – INTERNATIONAL ARBITRATION Vancouver, British Columbia has always been at the forefront of International arbitration.

In 1986, the British Columbia International Commercial Arbitration Centre (“B.C.I.C.A.C.”) was founded in an idyllic Vancouver setting overlooking the Pacific Ocean and the coastal mountain ranges of British Columbia. Since that time, the Centre has continued to attract arbitration work from around the world and has continued to develop Vancouver’s reputation for excellence in the field of alternative dispute resolution.

Singleton Urquhart LLP has had a long standing relationship with B.C.I.C.A.C. and was instrumental in establishing the centre and promoting the use of arbitration and mediation throughout Canada and Internationally. Recognized as one of Western Canada’s leading law firms in construction and insurance disputes, the firm counts amongst its senior counsel four Chartered Arbitrators, John Singleton, Q.C., Glenn Urquhart, Q.C., Barb Cornish, and Jeffrey Hand.

Singleton Urquhart is regularly retained by multi-national construction companies, insurers, local, Provincial, and Federal Government agencies and the Sports Resolution Centre of Canada to arbitrate a wide range of disputes.

to choose procedural rules, governing laws, language, place of the arbitration, and the makeup of the tribunal. Except in the case of jurisdictional errors, an arbitral award under this Act is final and may not be challenged in the Courts.

The Act also provides a relatively streamline process for recognizing and enforcing foreign arbitral awards.

The attractiveness of arbitration for disputes that arise between parties in different States has always been the ability to stipulate a predictable and reliable forum for dispute resolution and to be able to resolve disputes in a cost effective manner. The arbitral process can be tailor made for the dispute in question so that the dispute resolution process can be as simplified as the parties wish it to be.

Complex disputes may require more complex resolution procedures but that is the beauty of arbitration – it can respond to the needs of the parties.

In the coming years Vancouver will continue to be the seat of International arbitrations and Singleton Urquhart will continue to be part of delivering that process to the world.

In 1986 Canada ratified the UN Convention on the Recognition and Enforcement of Foreign Arbitral Awards. Combined with its own local legislation, the British Columbia International Commercial Arbitration Act, British Columbia is a leader in the global trend for the recognition and enforcement of foreign arbitral awards. The British Columbia legislation was enacted in particular recognition of Vancouver’s growth in becoming an International financial and commercial centre and the demands of parties to International commercial agreements to resolve disputes by means of arbitration.

The Act provides an excellent framework for the conduct of arbitral proceedings, granting the parties the freedom, amongst other rights,

Jeffrey Hand

CASE STUDY BIANCHI RUBINO-SAMMARTANO & ASSOCIATI Mauro Rubino-Sammartano is a member of the Italian Bar since 1961 and of Paris Bar since 1986. And a door tenant of Littleton Chambers, London, as an international arbitrator. He has acted as

Recorder at the County Court, Desio, from 1964 to 1969 and as a Deputy Judge of the High Court, Monza, from 1967 to 1969. He has been involved in dispute resolutions since 1980 and has acted over the years as chairman of an arbitral tribunal, as sole arbitrator and as party appointed arbitrator.

He is frequently instructed to appear in challenges of awards.

All this in international as well as in domestic arbitration. Frequently, the disputes in which he acts as arbitrator or counsel involve joint ventures, construction contracts, construction sub-contracts and license agreements.

He serves with a great spirit of service and he is much dedicated to try to understand the position of the parties and to apply the law with humanity, construing it as much as possible in order that it be close to natural justice.

He has been teaching arbitration at the University of Padua (1987-1989, 2003-2004, 2005-2006) and of Milan (1997-1998).

He has written and writes textbooks and articles on International Arbitration (2 nd edition), Domestic Arbitration (6 th edition), Construction Contracts (2 nd edition), Sale of Goods and Distributorship, Procedural Law and Public Policy.

He presides since 1994 the European Centre of Arbitration and Mediation (which was found in 1959 in Strasbourg under the patronage of the Council of Europe and of several Chambers of Commerce and professional bodies). The European Centre contributes to creating a culture of arbitration and mediation, and administers such proceedings respectively through the European Court of Arbitration and the Mediation Centre for Europe, the Mediterranean and the Middle East. It has national Chapters in many European and Arab countries in the Mediterranean and the Middle East.

On his proposal, in addition to the Mediation Centre, the International School of Arbitration and Mediation of the Mediterranean and Middle East has been formed. Its first training course in arbitration has taken place on December 9 and 10, 2011 with the University of Nice (France). The European Court operates in several countries. Its arbitration rules have the following main points, which are quite different form the majority of the other sets of rules.

• Preliminary meeting to help the parties choose the sole arbitrator; • Constructive dialogue between the arbitrator and the parties;

• Respect for each party’s right to prove its case without having to disclose in advance the intended questions for witnesses, without interference by the arbitrator in selecting witnesses, and without interfering with the parties’ right to examine and cross-examine witnesses; • Mandatory creation of a calendar for the proceedings;

• Concentration of hearings, final argument, and award in a short timeframe;

• Specialized arbitral divisions for disputes in real estate, construction contracts, commercial law, and consumer law;

• Provision (in the legal systems which allow it) for a full rehearing on the merits of the dispute by a three-member appellate arbitral tribunal that will render a decision within twelve months.

• Acceptance by each party of the right of the other party to apply for an ex parte summary judgment, concerning the share of costs and fees of the arbitration proceedings, which had to be advanced by the former and that, because of its lack of payment, had to be paid by the other one.

• Recommendation to the arbitrator to issue a partial award for amounts which are not disputed or which are manifestly due.

• Commitment of each party to avoid to raise useless or totally ungrounded oppositions and motions and not to behave in a delaying or obstructive manner, and its acceptance of the related sanctions in the costs award.

• A request to the Arbitral Tribunal to identify and decide at the outset, by Order or, if more effective, by an interim award, any legal or factual issues which may narrow the dispute.

Mauro Rubino-Sammartano

• Hearing and decision by a sole arbitrator, with a two-thirds reduction of the arbitration fees;

• Limit of 9 months for filing the award (a period attentively controlled by the Court extendable only on exceptional grounds);

Fifty Five

Acquisition International Magazine's 2011 Financial Review

Acquisition International Magazine's 2011

Financial Review

T

he global economy was set for a broad recovery over the course of 2011 and in January the outlook for the year ahead was the most positive we've seen since the crisis began in 2007. We have certainly witnessed some encouraging signs from the Q1-Q3 period with global M&A up 21.5% and private equity buyouts being the strongest since 2008. Now in the final quarter and just in time for our bumper year-end issue, AI is casting an eye back to examine how true the predictions were and we're interested to get your thoughts and hear how the year has been for the leading experts…

Jesús Humberto Medina-Alva, Presiding partner and Head of the Banking and Corporate Team at Abogados Medina, Rosenthal & Asociados (CENTRAL LAW Honduras).

“CENTRAL LAW Honduras Medina, Rosenthal & Asociados focuses on the regional and international business community with 11 offices in 7 countries Guatemala, El Salvador, Honduras, Nicaragua, Costa Rica, Panama and Dominican Republic. In Honduras our offices are located in San Pedro Sula and Tegucigalpa covering all our client´s needs from one single point.

“Within the structure of the National

jhmedina@central-law.com http://honduras.central-law.com Tel: +(504) 2550-2800 +(504) 2235-7473 San Pedro Sula - Tegucigalpa, Honduras

Dr. Vinzenz Bödeker v.boedeker@heuking.de www.heuking.de Tel. +49 - 69 - 97 561 414 Rechtsanwalt Grüneburgweg 102 D-60323 Frankfurt am Main

Fifty Six

Investment Promotion Program, Honduras has defined a new Legal and Institutional framework to attract and protect investments.

“By means of this program the country offers to domestic and foreign investors a package of laws among which we find The Law for the Promotion and Protection of Investment and the PPP´s Law. These laws have been announced at the international forum "Honduras is Open for Business" launched by the Government and held in San Pedro Sula in May 2011. The event has detailed some opportunities in renewable energy, tourism, forestry, agribusiness and infrastructure. Currently the Honduran Government is studying some PPP projects in the area of renewable energy and public infrastructure in which the firm has been hired as legal counsel.”

“Regarding the banking sector this year the firm acting as legal counsel to Banco Continental, obtained $46 million in loans from the Honduran Bank of Production & Housing.

“In respect with infrastructure the firm won three cases acting as legal counsel of Condelta.

Soptravi (Secretariate of Public Works, Transportation and Housing) owed our client almost 5.5 million dollars due to the construction of roads in the Departments of Copan, Choluteca and El Progreso. These contracts were suspended due to political crisis in 2009 but we claimed for the payments and the client will be paid by Soptravi.

“Regarding expropriation the firm dealt with the Honduran Government the value of expropriation of a client´s company building which has been expropriated for the construction of a new highway at the north (Tegucigalpa - San Pedro Sula). The expropriation offer was of 100,000 dollars but our firm asked for a new appraisal. Now the expropriation will be of 200,000 dollars, favourable to our client.”

office@achourhajek.com www.achourhajek.com Tel.: +420 270 006 111 Letenská 526/2 118 00 Praha 1 – Malá Strana Česká republika

Ms. Wang Jihong is the managing partner and Mr. Zhu Yongchun is the partner of V&T Law Firm. The professional competence, effective solutions, and deep understanding of various practice areas of V&T Law firm distinguish itself from competitors, and make it a reliable and long-term partner for its clients.

This year, the global economy is slightly recovering from the 2008 recession. Our firm continues to make remarkable progress in the field of infrastructure, merger and acquisition, foreign direct investment and capital market, winning several well-known awards of 2011. Although US debts default, Euro crisis get on the global stage one by one, which will definitely cast some negative effect on China’s economic growth; nevertheless, we are just slightly affected.

In the year of 2011, one of the most significant events is that the regulation on real estate in China is becoming so tight that it is and will continue to be in 2012, a cold winter for many players -- developers, middlemen and so on. However, we foresee a wave of restructure, merger and acquisition in this field in the future.

Moreover, the financing problem of the developers will seek new solutions, e.g. private fund and the like. Therefore, we predict the M&A activities in the real estate sector in China would be particularly active in the next 12-24 months.

With deeper implementation of the “economic transforming” as put forward in the “12th five-year plan”, the year of 2012 would be a year of adjustment, during which the emphasis may gradually be shifted from traditional sectors, i.e. energy, manufacture, real estate, to new sectors, especially culture and creativity industry. The new establishments thereof and M&A activities therein in the next five years are foreseeable.

In the upcoming 2012, our goal is to continue expanding our traditional areas of strength, and exploring M&A in new areas, trying our best to help our clients sail to their destination safe and sound.

Wang Jihong wangjihong@vtlaw.cn www.vtlaw.cn Tel：86-10-82255610 F3,Tower A,HUAYE International Center, Fourth East Ring Middle Road, No.39,Beijing

Acquisition International Magazine's 2011 Financial Review

Jacob Arko Saah is managing partner of Saah Partners, a firm of

is valued at US$220 million.

“Saah Partners is a forward-looking and client focused firm of

region. As an investment destination it offers several advantages and

environment with knowledge of international best practice.

politically and economically stable, Ghana is richly endowed with

gained in the public and private sectors. They also have a multi-

Beyond the obvious attraction of opportunities in the petroleum

business lawyers based in Accra, Ghana. business lawyers.

We combine an awareness of the local

Members of the firm bring to the practice several years of experience disciplinary background. Our good network in the public sector means that we can constantly dialogue with the regulatory agencies

Ghana is one of the destinations of choice for investment in the

ranks high in Africa in the ease of doing business. In addition to being natural resources and has a well educated human resource base.

sector, Ghana offers opportunities in other sectors such as services,

infrastructure, hospitality, agro-processing, mining and many more.

to anticipate challenges and deal with them effectively and in a timely

During the second quarter of 2011, the Ghana Investment Promotion

with clients to achieve the results they desire.

sectors) having a combined value of US$600 million representing a

manner when they arise. We believe in teamwork and work closely On 27 July 2011, Tullow Oil plc was listed on the Ghana Stock

Centre recorded 127 new projects (outside the petroleum and mining 21% increase over the same quarter in 2010.

Exchange (GSE). Tullow’s listing raised the market capitalisation of

the GSE from about US$17 billion to about US$30 billion making

the GSE the third largest bourse in sub-Saharan Africa after South

Africa and Nigeria, A further increase in the market capitalisation of

the GSE is expected with the listing of Kosmos Energy in the first or

second quarter of 2012. Tullow Oil and Kosmos Energy are the two main operators of the Jubilee fields from which commercial

production of oil commenced in December 2010.

The banking regulator, Bank of Ghana, has recently approved the

merger of Ecobank Ghana Limited and The Trust Bank Limited. TTB

Making a Move in 2012 “As we come to the end of the year many people will be thinking about leaving the organisation they worked with in 2011. A lot of senior people have a book of business and a team that they want to take with them.

They are afraid that the longer they are put on garden leave or held to their notice period, the more their business will melt away or be taken from them.

If you are in this position here are some simple tips which may help you plan your departure.

Read your partnership agreement You obviously need to check your contract for clauses which deal with notice, garden leave and which impose restrictions on what you can do after you leave. The style and clarity of the agreement will give you clues about how the process will be handled. A well-drafted agreement suggests that the procedure has been thought through and the organisation is clear about what it will do. With a well-drafted agreement and a smooth process the procedure is likely to take less time and the outcome is likely to be more predictable sooner in the process. A badlydrafted agreement suggests that this is not the case. The people involved may have to re-evaluate their response at each stage in the process.

Do your communication planning You have the initiative before you give notice. Your exit will be much easier if you can keep the initiative.

Think through carefully how and when you will give notice? Will you have told some of your team before you do? Will you agree to keep the fact that you are leaving confidential if management ask for this? When will you tell your clients? What about the media? Will there be a joint press release? In short, prepare a communications plan before you give notice.

Work out who will make the decisions?

Think about who will negotiate your exit with you and put yourself in their shoes. Senior terminations have to be dealt with by senior people,

Jacob Saah jsaah@saahpartners.com www.saahpartners.com Tel: 233 (302) 232008 2 Birim Street, Asylum Down, P O Box CT2728, Accra, Ghana people who have a lot of other things to do. Dealing with unwanted terminations can be very unproductive for them.

If they have been through all this before they may be more willing to be pragmatic and do a deal. If they are emotional you may need to allow them more time to adjust to what you are saying. Plan accordingly.

Plan the conversations Establishing rapport with decision makers early in the negotiations can help you when it comes to sticking points and judgment calls late in the process.

Before you have significant conversations write down the points you want to be settled by the end of the meeting. When you come out of the meeting check that you have achieved what you wanted to achieve.

Keep a note of what is said Ending relationships can be very painful. It helps not to polarise issues when they arise. A good lawyer will know this. Both sides need to be firm but fair – to look forwards and not backwards. (In this situation these clichés are a good guide!).

However, in many cases disputes are inevitable. If matters become contentious it will help enormously if you have taken care in drafting your emails and made a note of what was said in meetings. It is sometimes difficult to find the time to do this but it is by far the most important thing you can do to make your exit as painless as possible.

Tim Johnson tim.johnson@timjohnson-law.com www.timjohnson-law.com Tel: +44 (0) 207 036 9120 7 Ludgate Broadway, London EC4V 6DX

Fifty Seven

Acquisition International Magazine's 2011 Financial Review

Anna Babych is a Counsel at the leading Ukrainian law firms Vasil Kisil & Partners as a counsel advising, among other, on the complex trans-border M&A transactions and various transaction-related matters.

Ukrainian assets. We suppose this is to do with the recent impact of the 2008 recession and the fact that the market is waiting and adjusting to the economic situation in Europe. We are approaching the 2012 with cautious optimism expecting certain mergers to take place.

“Vasil Kisil & Partners is one of the top and long-established law firms in Ukraine that has impeccable reputation and unique expertise. The firm provides legal support to both Ukrainian companies operating abroad as well as foreign and international corporations doing business in Ukraine. We have long standing relationships with most of our clients and they are based on mutual respect and individual approach.

“We expect Ukrainian M&A market to mirror certain key trends in the European M&A market. The agriculture, food and retail sectors will be the main players in 2012, with many prospective investors coming from Russia. We also expect the business groups to continue the processes of restructuring their assets portfolio in order to optimize the group structures and cut down on unprofitable businesses.

“The firm has been involved in some significant mandates of late.

Vasil Kisil & Partners advised the Danone group with respect to the establishment of a €2.5 billion joint venture on the basis of Ukrainian assets in the dairy sector with Unimilk, a major CIS player. This deal was one of the most important mergers in Europe last year and has been hailed for its precedent setting significance for the Ukrainian and Russian antitrust administrative practices.

“However, we are also aware that the next year can potentially be decisive in the M&A market, as it can either escalate or collapse entirely.”

“VKP has been recently involved in major joint venture projects in media sector as well as the ongoing negotiations regarding the potential sale of the businesses in the food manufacturing industry and the retail.

The 2011 has started well with many potential projects coming in; however as the Eurozone crisis deepened the potential investors have approached more cautious towards any potential deals involving The history of Sayat Zholshy and Partners began on 25 December 1998 in Almaty.

“To render legal services in timely manner and most efficiently, we have an office in the key city of Almaty. Our team is very mobile and has opportunity to visit the country where the project is lead. For instance, our team has experience visiting Russia, Kyrgyzstan and Georgia during work with project.

“The Sayat Zholshy & Partners team consists of 20 Associates, including 6 Partners, graduates of universities of Kazakhstan, Russia, the USA, Germany and Poland.

“Over the years, our professional work has been many times recognized by leading international publications such as The Chambers, The Legal 500, Who’s Who Legal, and AsiaLaw Profiles.

“Currently, the Forum of Corporate Lawyers is the only in the country most reputable annual platform for sharing professional opinions among representatives of leading Kazakhstan law firms and heads of legal departments of companies operating in Kazakhstan. Each year, since it was first held three years ago, Sayat Zholshy & Partners wins the biggest number of awards thus earning the Best Law of the Year award (in this year, we shared our success with GRATA law firm).”

“Our team represented a major world manufacturer of consumer electronics in connection with the client's claim to recover from the counterparty a party of the contractual default interest for the amount of over USD 7 mln. The dispute involved several different claims and counterclaims and was resolved successfully in favor of the client.

We also assisted a major CIS bank in Kazakhstan in connection with its lending activities for the total amount of over USD 200 mln.

Fifty Eight

Anna Babych www.kisilandpartners.com Tel: +380 44 581 7777 Fax: +380 44 581 7770 17/52-A B. Khmelnitskogo St. Kyiv 01030 Ukraine We represented a major owner of a filling stations network in connection with alleged abuse of its dominant position. In the opinion of the Kazakhstan antitrust authority, the amount of the monopolistic income reached approximately USD 70 mln.

Sayat Zholshy and Partners , also prepared a legal opinion on the matters related to compliance with the applicable legislation and charges made by the antitrust authority in connection for alleged abuse of a dominant position against a dominant company – a mobile network operator. The charges amounted to approximately USD 80 mln.

“We also provided advice, choice of structure and recommendations on ensuring tax efficiency (including assistance on matters related to international tax planning) of a transaction involving spin-off of assets and sale of business related to development of an uranium deposit in the Republic of Kazakhstan, assistance in restructuring of the ownership of these assets and their sale. Amount of the transaction: over $142 mln.”

What are the firm’s goals for the rest of the year?

“By now, we have already established partner relationships with a number of international (both European (inc. the Magic Circle) and US as well as Russian law firms. We are going to continue our friendly partnership policy and to maintain our position on the market.”

Mr. Vitaly Vodolazkin info@szp.kz www.szp.kz 3rd Floor, Building 2A, , Nurly Tau Business Center, 5.

Al-Farabi Ave., Almaty, Republic of Kazakhstan, 050059

Switzerland, a Location for International Arbitration

Switzerland

a Location for International Arbitration

W

ith the last 2 years reaching record highs in cross-border M&A activity, international arbitration has never been hotter. It’s a constantly evolving and dynamic field and it is essential for arbitrators keep up with regional, technological and cultural developments within all of the areas they operate.

Businesses all over the world are increasingly turning towards ADR mechanisms such as arbitration to settle disputes, moving away from the traditional approach of litigation via the courts.

Arbitration is time-saving, confidential and cost-effective; it has become a vital means of protecting commercial interests.

In a country with such a broad international reach, the Swiss business community has always been—and remains among the primary users and locations for international arbitration. The country is an ideal location for settling international business disputes; it’s politically neutral, has a well-developed legal system, is conveniently located and perhaps most importantly, has what is the most open mind of all in the arbitration community – making it very easy for foreign parties with different values, cultures and perceptions to come and settle disputes.

Acquisition International speaks Daniel Peregrina, Principal, Baker & McKenzie Geneva and Luca Beffa, Senior Associate, Baker & McKenzie Geneva about Swiss Arbitration.

Who normally engages your services– i.e. large multinationals/government etc?

“We regularly represent large multinational companies, as well as state-owned entities and state agencies. In Geneva, we are both an international and a prominent local Firm. Most of our lawyers are Swiss and/or have a Swiss educational background. Therefore, we also have a large number of Swiss and Geneva-based clients, both multinational companies and more local companies and individuals.”

Where do most international cases in Switzerland come from and why?

“In arbitration, most international cases held in Switzerland come from Western Europe.

According to the latest statistics of the Swiss Chambers of Commerce, 53% of the parties

involved in arbitrations initiated in 2010 before the Chambers were from Western Europe, 20% from Switzerland, 13% from Asia/Middle East, 3% from Northern America and 2% from Eastern Europe and Russia.

“Switzerland is perceived as a neutral country with a very good and efficient legal system by its neighbours. Furthermore, the main business partners of Swiss companies are Western European companies. Switzerland also has an outstanding reputation in Asia and in Middle East, and the business between Swiss companies and companies coming from those regions is flourishing.”

Why has the Swiss business community always been and remains among the primary users of arbitration?

“Switzerland has always been arbitrationfriendly. This is reflected not only in the law and attitude of Swiss courts, but also in the habits of the Swiss business community. When entering into contracts with foreign companies, Swiss companies often prefer, and are advised by Swiss lawyers to choose arbitration instead of taking the risk of having to sue the foreign contractual party before the courts of its domicile. By doing so, Swiss companies are certain that their dispute is heard in a neutral forum, by competent people, in proceedings conducted in accordance with the parties’ interests and will, and according to internationally recognized principles and standards.

“Swiss companies are certainly influenced in their choice by the efficient way in which arbitrations are held in Switzerland and by the fact that Swiss lawyers are well-versed in arbitration.

Furthermore, there are very good Swiss arbitrators Swiss companies can choose in order to have someone of the same legal background, culture and mentality in the panel. This is often perceived as an advantage by Swiss companies.

Can you please define regulatory framework that governs Swiss arbitration?

“International arbitrations in Switzerland are governed by Chapter 12 of the Swiss Federal Private International Law Statute, in force since January 1, 1989. The key features of the Swiss international arbitration act are the following: any dispute involving a business interest is arbitrable in Switzerland; the will of the parties prevail in all

respects; agreements to arbitrate and choice of law agreements are separable from the main contract, which ensures their enforceability; an arbitral tribunal has jurisdiction to decide on its own jurisdiction; the procedure before the arbitral tribunal may be freely determined, without any presumption that local state court procedures apply; arbitral tribunals have the power to order provisional and conservatory measures and to ask for the assistance of local courts to enforce such measures; setting aside procedures go straight to the Swiss Federal Supreme Court, whose decision is final; grounds for setting aside an award are limited and foreign parties may even exclude any setting aside in advance.”

How has the global downturn impacted both the type and the volume of work in Switzerland?

“As any other country, Switzerland has also suffered from the global downturn. The legal areas that have been impacted the most are the mergers and acquisitions and the real estate sectors. We have seen a decrease in transactions in these two areas, both in terms of quantity and importance of the amounts at stake.

“It does not seem to us that dispute resolution and arbitration have been significantly impacted by the global downturn. On the contrary, the problems that have arisen due to the financial crisis have been and are still originating dispute resolution and arbitration proceedings in many areas.”

Daniel Peregrina and Luca Beffa Daniel.peregrina@bakermckenzie.com luca.beffa@bakermckenzie.com www.bakermckenzie.com T: +41 22 707 98 00 Rue Pedro-Meylan 5, CH-1208 Geneva

Fifty Nine

How to Attract Foreign Investment

Doing Business in the Seychelles

Azanne Kofi Akainyah akainyah@aalawconsult.com www.aalawconsult.com T: + 233 302 760 164

Joel Camille T: 00248 4325118 j.camille@alpha-offshore.com

Villa Almaz, 7A, Roman Road, Roman Ridge, Accra, Ghana

Suite No 1 Floor 2 Sound & Vision House Francis Rachel Street Victoria Mahe

How to Attract Foreign Investment

Doing Business in Mauritius

Goce Adamceski, Darko Janevski T: +38923224131 g.adamceski@act.com.mk d.janevski@act.com.mk www.act.com.mk Crvena Voda Str. 7/13, 1000 Skopje, Republic of Macedonia

Citilaw T: 00230 2137373 asha.proag@citilaw.org 5th Floor, Belmont House, Intendance Street Port Louis

How to Attract Foreign Investment Dafe C. Akpeneye Rahul Chadha T:+234 (1) 271 1700 Ext 3114 M: +234 (0) 706 401 9522 rchadha@chadha-co.com dafe.akpeneye@ng.pwc.com PricewaterhouseCoopers Nigeria 252E Muri Okunola Street, Victoria Island, Lagos

AndrĂŠs L. Halvorssen T: +58-212-9520995 ahalvorssen@rdhoo.com www.rdhoo.com Torre Forum, Piso 11, Calle Guaicaipuro, El Rosal, Caracas 1060 Venezuela

How to Attract Foreign Investment

How to Attract Foreign Investment

Amira Musa amira.musa@alliedauditors.sd www.alliedauditors.sd

Suresh R.I.Perera T: +94 115 390 320 sperera@kpmg.com lk.kpmg.com 32 A, Sir Mohamed Macan Markar Mawathe, Colombo 03, Sri Lanka

Azmi Mohd Ali azmi@azmilaw.com www.azmilaw.com www.azmiandassociates.sg 14th Floor, Menara Keck Seng, 203, Jalan Bukit Bintang, 55100 Kuala Lumpur, Malaysia.

Sixty

Vo Ha Duyen T: (84-8) 3827 7300 duyen@vilaf.com.vn www.vilaf.com.vn Kumho Asiana Plaza, Unit 404-406, 39 Le Duan Street, District 1, Ho Chi Minh City, Vietnam

Adviser Map

Tel: , +1(284)494 3659 www.grantlawbvi.com 2nd Floor, Iris DeCastro Building, Slaney Drakes Highway P.O Box 4591, Road Town, Tortola British Virgin Islands VG 1110

Tel: + 44 (0)1733 841 211 Web: www.grantlawbvi.com Flint’s House, Eldernell, Peterborough Cambridgeshire PE7 2DD

Teshome Gabre-Mariam Bokan Law Office T: 00230 2137373 asha.proag@citilaw.org Wello Sefer Kirkos Subcity Kebele 2 House no 171 Addis Ababa

Delphine AMBROSINI delphine.ambrosini@bakermckenzie.com www.bakermckenzie.com T : +352 26 18 44 235 12, rue Eugène Ruppert L-2453 Luxembourg

K. B. Andah or Kobby Andah Tel: +233 - 21-252372 info@andahandandah.com andah@4u.com.gh C645/3, 4th Crescent Asylum Down, Accra P. O. Box CT 6076 Cantonments, Accra.

T + 52 55 5279 2900 Edificio Scotiabank Inverlat, Piso 12 Blvd. M. Avila Camacho 1 México, D.F. 11009 Mexico

Sixty One

Deal Diary

A

nnual totals for UK M&A deals have been stable for a couple of years (with £81bn-worth announced in 2009 and £81.7bn in 2010) and 2011 is on course to continue this, with £60.7bnworth of deals announced so far. This figure accounts for 17.7% of all European M&A value for Q1-Q3 2011.

Inbound foreign investments (£46.6bn) represent 76.8% of all UK M&A activity so far this year, the highest proportion on mergermarket record (2001). UK cross-border outbound activity amounted to £56bn in Q1-Q3 2011, a drop of 13.7% compared to the same period the last year (£64.9bn). British investors have yet to recover confidence.

The fastest growing sector in the region since last year is Technology, with the value of deals announced trebling from £2.5bn in Q1-Q3 2010 to $7.7bn in Q1-Q3 2011.

Goldman Sachs took the lead in the financial adviser league table by value with 41 deals worth £48.8bn. Rothschild retained its leading position by deal count (58 deals).

Freshfields Bruckhaus Deringer gained one place to top the legal advisor league table by value, advising on 52 deals with a total deal value of £40.8bn. DLA Piper, with 67 deals worth £5.2bn, retained its top position in the table ranked by volume.

Sixty Three

Deal Diary

DEAL INDEX 4 WHEELS Service + Logistik GmbH ABI Tracker Albumprinter Alterra Merges Irish Companies Ambulancias Reus Australian vet clinics BiscuitManufacturerinBrazil(Mabel) Brazil Pharma SA acquires Drogarias Big Ben Brioni CallPoint New Europe Cameroon Holdings Clark Builders CTS Eldorado group EuroDough Feldmeier

Sixty Four

68 68 68 69 69 69 70 70 70 71 71 71 72 72 72 73 73

FEP Fahzeugelektrik Pirna 73 Frankfurt Silver Tower 65 IRISUnifiedTechnologyPrivateLimited 74 ISS 74 Makhteshim Agan and ChemChina Merger 66 Marchegay Technologies 75 Mendix 75 Metalind 75 Milliken Woollen Speciality Products 76 Portables Unlimited 76 Red de Banda Ancha de Andalucia 67 smartclip 77 Teknikmagasinet 77 Tinubu Square 77 William Blair and BDA Strategic Alliance 78

Deal Diary

German IVG-led consortium Acquisition Of Frankfurt Silver Tower A consortium of investors led by Germany's largest listed real estate company IVG has raised over €200m equity and concluded a purchase agreement for Frankfurt's Silver Tower skyscraper from Commerzbank. IVG CEO Wolfgang Schäfers, who has taken over the post only this month, commented: "We successfully raised over €200m in equity for this outstanding investment within a short space of time."

Some 90% of the equity was contributed by third-party institutional investors, and a 10-year debt financing was provided by a major German pension scheme, said IVG. The 166m., 36-storey Silver Tower, located in Frankfurt's banking district, has been undergoing extensive refurbishment since 2009, now almost complete, and is expected to receive German Sustainable Building Council DGNB Silver certification next year. It was the headquarters of the Dresdner Bank until its takeover by Commerzbank amid the global crisis, and offers 72,000 sq.m. office space which is on a long-term lease to German railway company Deutsche Bahn.

Bonn-based IVG holds €22bn AUM, manages inter alia on balance properties worth some €4.1bn and funds and mandates amounting to €15.4bn. pie.

German IVG-led consortium Acquisition Of Frankfurt Silver Tower

The Luther team, headed by the Frankfurter finance partner, Andreas Naujoks and assisted by Associate Karsten Fink, advised IVG Institutional Funds GmbH on the financing of the Silver Tower in an amount of about EUR 200m. It was the first time that Luther acted for IVG, however, Andreas Naujoks and Karsten Fink have known IVG from several previous transactions where they have acted on the lenders side.

The team at GSK Stockmann + Kollegen was led

by Sascha Zentis (partner). They advised IVG Institutional Funds GmbH on regulatory questions on German Investment Act and on the German Insurance Supervisory Act in the structuring of the transaction. The challenges of the deal consisted on the regulatory side mainly in the necessary alignment of the interests of several investors with the regulatory requirements.

“As the transaction was to be concluded prior to completion of the refurbishment works and handover of the Silver Tower to the tenant, Deutsche Bahn AG, THP conducted an intensive analysis and evaluation of construction progress, lease requirements and permit stipulations. The knowledge gained and risks identified during this process flowed directly into the acquisition negotiations and assisted IVG in achieving optimal conclusion.”

THP and IVG have a long-standing working relationship in the fields of transaction consulting, project management and sustainability reporting. The team was led by company principal, Dr. Thomas Herr, THProjektmanagement GmbH provided advisory services for the purchaser in a structured bidder process.

Legal Adviser to the Purchaser

FPS Legal Adviser to the Vendor Financial Due Diligence Provider Vendor Due Diligence Provider Property Valuer Technical Adviser to the Purchaser

Sixty Five

Deal Diary

Makhteshim Agan and ChemChina Complete Merger

M

akhteshim Agan Group (MAI) (formerly TASE:MAIN), the world leader in branded offpatent crop protection solutions, have announced that 60% of its shares have been acquired by China National Agrochemical Corporation, a full subsidiary of China National Chemical Corporation (ChemChina).

The merger between MAI and ChemChina is the largest transaction ever concluded between a Chinese and an Israeli company, and represents a significant milestone in MAI's 66year history. The transaction process was led by Mr. Ren Jianxin chairman of ChemChina and Mr. Nochi Dankner chairman of IDB Group. The merger will create a platform that is optimally suited to the changes in the global agrochemical industry, while positioning MAI to tap the opportunities inherent in these changes.

“

”

The transaction was very unusual – a partial reverse triangular merger. In the classic form of a reverse triangular merger, the purchaser forms a wholly-owned subsidiary, which merges into the target company.

HFN advised Makhteshim-Agan Industries Ltd. ("MAI") on the deal, with the Ehud Sol and Ilanit Landesman

“

Yogev, heads of Capital Markets and Securities

department. The department has special expertise in transactions involving

Israeli public companies, covering all aspects of the Israeli Securities Law issues.

This cross-border multi-billion dollar transaction, comprised of the merger with Makhteshim-Agan as well as a 960 million dollar finance loan provided to Koor Industries, necessitated GKH's strong and skilled proficiency both in the Israeli merger & acquisition law and in the international common practices, in order to "build a bridge" between China and Israel and to design the optimal transaction structure for all parties.

Together with their Chinese colleagues, GKH team led the drafting and negotiation of major parts of the transaction, including vis-a-vis the Israeli Bank and authorities.

”

GKH Law Firm was the Israeli legal counsel of China

National Chemical Corporation, one of China's largest

chemical corporations. The team consisted of Adv. David

Hodak, head of the firm, Adv. (and CPA) Esther Koren, head of the firm's M&A, Corporate department, Adv.

Moshe Ganot and Adv. Yoav Friedman.

China National Agrochemical Corporation Acquisition Of A Stake In Makhteshim Agan Group Legal Adviser to MAI

Legal Adviser to Koor

Legal Adviser to ChemChina

Debt Providers

Sixty Six

Antin Infrastructure acquires Spain’s Axión Paris-based Antin Infrastructure Partners, the infrastructure investor backed by French banking giant BNP Paribas, has acquired a 100 per cent stake in Spanish company Axión from the TDF group for an undisclosed sum.

Axión is currently Spain’s second largest operator of terrestrial infrastructures for broadcasting digital television and radio signals, while also providing services to telecommunications operators. Boasting a grand total of 575 sites, the company is the market leader in Andalusia, where close to 70 per cent of its centres can be found.

“

Deal Diary

The principal challenges were the pressure of time, the high number of installations (hundreds) and the different applicable las, provided that such installations were place in different Autonomous Communities and towns, with their own rules. We attached a special team to work day and night under two partners. Deadlines were duly completed.

”

ALTIUS provided highly specialized legal due

diligence works of all the telecom installations of the

“

target in the Spanish territory, as well as legal analyse

of the potential risks and possible solutions. Sofia

Acuna, ALTIUS partner for Public Law led the team.

”

Our detailed knowledge of the Spanish market allowed us to better evaluate for Antin IP the position of a regional tower operator, as opposed to that of traditional European incumbent operators.

Analysys Mason helped Antin Infrastructure Partners in the acquisition process of Axión. We acted as an expert adviser and carried out the commercial and

technical review of the company. Lluís Borrell

(Partner) was the Project Director and overall co-ordinator of the project. Ignacio Gómez (Senior Manager) was the overall Project Manager and focused on the commercial aspects while Patrick Kidney (Senior Manager) conducted the

technical review of the company.

Ashurst LLP advised TDF and the minority shareholders in the sale of 100% of

Antin Infrastructure Acquisition Of Axión

Financial Advisers to Antin IP

Axion to Antin IP. Ashurst LLP acted as legal advisors to the sellers throughout the entire sale process, including vendor's due diligence, due diligence

management, SPA negotiations and advice up to the closing.The team was led by

Jorge Vázquez, a partner in the corporate and M&A department, assisted by

associates Marta Soto-Yárritu and Sixto de la Calle, among others.

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Sixty Seven

Deal Diary

Acquisition of majority stake in 4WHEELS Hamburg-based investor CAPCELLENCE has acquired a majority of the shares in 4WHEELS Service + Logistik GmbH, Düsseldorf. Heinz and Robin Vogl, the founders of 4Wheels Service + Logistik GmbH, and family office OBROSI GmbH & Co. KG retain an equity interest. The previous private equity investor has sold its 38% stake in the company and is no longer a shareholder. The undisclosed purchase price was raised exclusively through equity capital.

A multi-location team led by lead partner Dr Tobias Schneider advised CAPCELLENCE on all aspects of the transaction.

Established in 2000, 4Wheels Service + Logistik GmbH is the market leader for services relating to the storage of wheels.

CAPCELLENCE is an independent private equity firm with a partnership-oriented approach and medium to long-term outlook. With its evergreen structure, CAPCELLENCE takes a medium to longterm investment view without any shortterm exit pressure.

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Barclays Corporate provide £30m funding for LGV backed MBO of ABI

Barclays Corporate in East Yorkshire has provided combined senior debt and working capital facilities of £30m for Beverley-based ABI (UK) Group Limited (“ABI”) to support their continuing growth plans. LGV Capital has invested a majority stake in the business from Barclays Ventures.

Jon Hunter, Barclays Corporate Relationship Director said: “Barclays is delighted to continue its support of ABI during an important time for manufacturing in the UK. This is a great example of a strong management team driving their business forward in challenging times, supported throughout by a strong bank.”

Wayne Hiley, Head of Debt Finance, North at Barclays Corporate commented: " We are very pleased to back our existing relationships with both ABI and LGV through the provision of a thoughtfully structured financing package."

The transaction sees Remgro dispose of its interest in Tracker to Actis while FirstRand restructures its investment to include RMB. The Mineworkers Investment Company (‘MIC’) increases its stake in the business, thereby improving the BEE credentials of the business.

“NLA played an important role in many aspects of the transaction, with the most notable aspects being valuing Tracker, negotiating an agreed price with Remgro, advising on and coordinating the detailed due diligence process and advising the consortium on obtaining preferable funding terms from the financing banks.”

The CIL team, led by Alex Marshall (Director), provided Commercial Due Diligence to LGV Capital in this transaction.

LGV Capital backed ABI Management Buy Out

Actis Backs US$434m Buy-Out of Tracker

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Sixty Eight

Actis has led a consortium in the US$434m, 100% management buy-out of Tracker, South Africa’s largest vehicle tracking company.

NLA acted as transaction adviser to the Actis-led consortium (including RMB Ventures, the Mineworkers Investment Company and Tracker management) on its buy-out of Tracker.NLA’s team was led by co-founder directors, Jan Newman and Ben Lowther, with strong support from senior banker, Sam Kramer, and the rest of the NLA advisory team.

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Deal Diary

Acquisition Of Albumprinter

Alterra Merges Irish Companies

Vistaprint N.V. (Nasdaq: VPRT), a leading online provider of professional marketing products and services to micro businesses and the home has completed its acquisition of Albumprinter, a privately held Dutch photo book and photo product company. The purchase price was €60 million, with an agreement to pay up to an additional €5 million based on a performance based earn-out. The final purchase price is subject to customary, post-closing balance sheet adjustments.

Alterra Capital Holdings Limited has announced the merger of its Irish underwriting companies, Alterra Europe plc and Alterra Reinsurance Europe plc. Alterra Europe, the surviving entity, will underwrite business from its head office in Dublin, as well as from its branch offices in London and Zurich.

This acquisition combines Vistaprint’s strengths of a pan-European customer base with Albumprinter’s specialized expertise and technology for the design and production of photo books. Vistaprint currently plans to promote the Albumprinter offering across the European market. The acquisition will also enable Albumprinter’s customers to benefit from a much expanded product offering of personalized products that Vistaprint produces.

Ernst Teunissen, executive vice president and chief financial officer, commented: “As discussed during the prepared remarks for our first quarter fiscal 2012 earnings announcement last week, we expect this acquisition to add about $37 million to $39 million of revenue for the remainder of our fiscal year ending June 30, 2012. We expect the acquisition to be dilutive to GAAP earnings per share by $0.09 to $0.11, but accretive to our non-GAAP earnings excluding acquisition-related amortization of intangible assets and share-based compensation and related expenses. Our updated guidance below adds our Albumprinter expectations to the guidance we established for our core business on October 27, 2011.”

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W. Marston Becker, President and Chief Executive Officer of Alterra, commented: "We are pleased to have been able to merge our Irish underwriting companies in order to operate our insurance and reinsurance businesses as a single platform. The new structure of Alterra Europe provides a stronger consolidated balance sheet for our Dublin insurance and reinsurance platform, allowing for greater operational efficiencies, and simplifying the implementation of Solvency II." Brian Daly, FS Tax Partner and Head of Clients & Markets led the tax team at KPMG, who represented Alterra Europe PLC. When asked what challenges faced them KPMG responded; “We approached the Irish tax authorities and successfully obtained a ruling that relief would apply to the transaction.”

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Grupo Ambuibérica acquires Ambulancias Reus.

Grupo Ambuibérica, owned by ProA Capital, has acquired 90% of Ambulancias Reus in November 2011.

Both the purchaser and the target are ambulance businesses.

“We started analysing the Spanish sanitary transfer industry in first quarter 2011. It is a stable business with recurrent revenues and solid margins and cash-flows.”

Next Corporate acted as financial advisors to ProA Capital in the Acquisition of Ambulancias Reus through Grupo Ambuiberica. . The company has three partners: Sergio Berenguer, Jorge Olano and César Prado. The team accounts for more than 30 years of experience in the M&A and Private Equity industry.

SOCIOS advised on all aspects of this transaction. Specifically, responsible for assisting ProA in raising finance, being able to attract a number of international institutional funds to coinvest alongside ProA in the deal. Mark Parson, José Antonio Martín de los Santos (Partners) and Jaime Pérez de Laborda (Manager).

M. Rosa Perez, Partner, and M. Ana Puchol, Senior Lawyer lead the team of Ros Petit.

Grupo Ambuibérica Acquisition Of Ambulancias Reus.

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Sixty Nine

Deal Diary

Three Australian Vet Clinics Acquired for A$2.56 million

Greencross (ASX: GXL) has recently settled the acquisition of three veterinary clinics for a total cash consideration of A$2,561,914, adding to its growing veterinary services business. Greencross, Australia’s largest veterinary group. Greencross has just added: Animal Clinic Morwell and Pakenham Animal Health Clinic in Victoria; and Barolin Veterinary Hospital in Queensland to its portfolio of assets.

The new clinics are well established businesses that have been in operation for over 15 years and the company expects the practices to deliver annualised revenue of A$3.865 million and EBIT of A$0.649 million. The acquisitions are expected to be earnings per share accretive in the 2012 fiscal year.

Greencross is poised to continue its expansion with a goal of five acquisitions of this type and size each quarter moving forward. “We represented Greencross Vets on the deal ,after working closely with their acquisitions manager – Jason Dacey for many years. Greencross is a well placed, enthusiastic company made up of industry experts who genuinely love what they do. It is a privilege to work with companies of this stature.”

Gavin McInnes – Group Head, Commercial & Property Groups at Rostron Carlyle led the team.

Gavin specialises in acquisitions such as those above as well as other sectors such as mining & resources, dental & orthodontic, optometry and hospitality. Gavin also specialises in all aspects of property transactions including property development, commercial leasing and commercial property acquisitions and sales.

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PepsiCo Acquires Biscuit Manufacturer in Brazil

Grupo Brazil Pharma acquires Big Ben Drugstore

PepsiCo, Inc. (NYSE: PEP) has acquired Mabel, a leading producer of cookies, crackers and snacks in Brazil.

The acquisition is expected to further strengthen PepsiCo's business in a key emerging growth market.

Grupo Brazil Pharma has acquired the Big Ben chain of stores for 453.6 million reais ($260 million), the latest in a string of mergers and acquisitions in the local pharmaceutical sector.

With the acquisition, PepsiCo will employ approximately 12,000 people in Brazil and operate 19 food and beverage manufacturing facilities across the country.

A holding of investment bank BTG Pactual focused on Brazilian companies, Brazil Pharma will pay 274 million reais in cash and the rest with its common stock at 15 reais a share.

The transaction is subject to a postclosing review by Brazil's Council for Economic Defense. Financial terms were not disclosed.

Big Ben has 146 stores spread across Brazil's north and northeast in the states of Para, Amapa, Maranhao, Piaui, Paraiba and Pernambuco, with annual revenues of 800 million in the fast-growing region.

UBS acted as sole financial adviser to PepsiCo on its acquisition of Mabel, which further strengthens PepsiCo’s footprint in Brazil.

Led by Eduardo Centola, CEO of UBS Investment Bank in Brazil, and Guy Phillips, Global Head of the Consumer Products & Retail Group, UBS leveraged its on-the-ground presence and global relationship with PepsiCo to ensure a smooth transaction in a competitive auction process. The deal represents UBS’s 2nd transaction with PepsiCo in as many weeks, alongside the strategic alliance with Tingyi in China, and demonstrates the strength of UBS's global franchise and leadership in executing cross-border transactions.

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Led by the partners Cristina Hae Soh and Ronaldo Xavier, Deloitte advised Pharma Brazil during the acquisition of Big Ben Drugstore.

Cristina Hae Soh commented; “The key aspect of the deal was working closely with the client and supporting the team with key information on timely basis.”

In Brazil, Deloitte has a strong experience in supporting mergers and acquisitions practices in consolidating industries, especially pharmaceuticals and education.

Grupo Brazil Pharma Acquisition Of Big Ben Drugstore

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Seventy

Deal Diary

PPR Acquires Brioni

The French luxury goods group PPR has reached a decision to buy the Italian men’s fashion brand Brioni for an undisclosed price.

PPR, whose brands include Gucci and Yves Saint Laurent, said the acquisition would help build its market share in luxury menswear.

“Brioni boasts top quality craftsmanship and is synonymous with Italian masculine elegance,” Mr. Pinault said in a statement. “We have great ambitions for this fashion house.

We will give it access to our expertise and know-how, so that it can write a new page in its history while continuing to preserve its identity.”

PPR plans to finance the acquisition using cash raised through recent disposals.

Jérôme Pottier, Merrill DataSite’s regional director in France, supported execution of this acquisition through provision of a premium virtual data room solution. Jérôme was introduced to Brioni to help create a secure, online, fully searchable document repository to load thousands of confidential corporate documents. This allowed the PPR group to ease and accelerate the buying process.

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EBRD Acquires Minority Stake in CallPoint New Europe

With an investment to the amount of €3.0 million the European Bank for Reconstruction and Development (EBRD) acquired a minority stake in CallPoint New Europe. The call center and BPO company has delivery sites in Romania (Bucharest) and Bulgaria (Sofia and Plovdiv).

The capital will be utilised for expanding the operational capacities of the Company and increasing its competitiveness in the call center and BPO field in Eastern Europe, via investments in technology, human resource and sustainable development of the business. The company target is to reach a scale of 4000 employees (FTE’s) across the region by 2013.

In 2008, Global Finance already invested €1 million in the Company through its Growth Fund. In 2010 CallPoint New Europe marked 64% growth in turnover and appointed 200 new employees versus previous year.

CallPoint is one of the biggest independent outsourcing companies in Eastern Europe.

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Victoria Oil & Gas Acquires Cameroon Holdings Limited

Victoria Oil & Gas Acquisition of Cameroon Holdings Limited (‘CHL’) from PR Marriott Drilling Limited (‘PRM’).

Victoria Oil & Gas Plc, the AIM quoted oil and gas exploration and development company with assets in Cameroon and the FSU has completed the acquisition of one third of a 6.8 per cent royalty interest in its 95 per cent owned Logbaba gas and condensate project in Cameroon by making a final cash payment of US$2.5 million.

The royalty interest has been acquired from PR Marriott Drilling Limited ('PRM'), by the purchase of their one third interest in Cameroon Holdings Limited ('CHL.'), the company entitled to the royalty.

Kevin Foo, Chairman of VOG, commented; "I am delighted that we have been able to reduce the long term cost of the royalty in this way.

Independent analysts who have looked at the transaction believe it will prove to be worth several times the consideration paid."

Victoria Oil & Gas Acquisition Of Cameroon Holdings Limited

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Seventy One

Deal Diary

Turner Construction Co acquires Clark Builders Through its U.S. subsidiary Turner, Hochtief is purchasing the majority (51 per cent) of Canadian construction company Clark Builders of Edmonton.

Specializing in the construction of institutional, recreational, preengineered infrastructural buildings, multi-unit residential commercial and industrial projects in western and northern Canada, Clark Builders is expanding. The agreement will take effect on November 2, 2011. The value of the agreement is EUR 49.91 million (CAD 68 million), plus performancebased payments earned over the next five years.

"Clark Builders is excellently positioned in Canada and expanding. In partnership with Turner, we can accelerate this expansion," says Dr. Frank Stieler, Chairman of the Executive Board of Hochtief.

The Canadian economy is growing robustly and construction is booming: Investments of up to EUR 15 billion (CAD 20 billion) are slated for new public and private-sector projects over the next three years. Public-private partnerships have already become an established business model. Such rapid growth is being met by only a handful of qualified construction companies.

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Seventy Two

Management of CTS teams up with Parcom Capital

Parcom Capital and the management team of CTS have acquired CTS International Holding B.V. including its subsidiaries (“CTS”), from the current shareholders. CTS is a leading company specialized in the design, supply, installation and maintenance of systems and products for storage tanks.

CTS is a fast growing company and currently has a turnover in excess of EUR 40m and operates from 10 offices around the world.

Gert van Meijeren, CEO of CTS comments: “We are very pleased with our new shareholder Parcom Capital and look forward to further develop our position with current customers and build up our international network with their support.”

Parcom Capital adds that the acquisition of CTS fits very well with its fund strategy to assist established midsized companies with their successful international expansion and CTS appears to be a good platform for autonomous growth as well as add-on acquisitions, as demonstrated by the Walex acquisition.

PPF Group N.V. Acquisition Of Eldorado Group

PPF Group N.V. acquires a stake in Eldorado Group, Russia's largest consumer electronics retailer. PPF acquired the remaining stake from their joint venture partner, Igor Yakovlev, the founder of the Eldorado Group, after it acquired a controlling stake in Eldorado back in 2009 in a $300 million debt-for-equity swap.

The team of the lawyers in this transaction was led by Jiří Štěrba, Managing Partner of BBH Moscow office and Vladimir Uhde, partner of BBH Prague. “We were representing PPF group. BBH and PPF have been cooperating on a long-term basis. The biggest challenges of the deal were a complex settlement and release of the claims among the large number of companies and the fact that transaction involved more than ten different jurisdictions.”

Parcom Capital and CTS Management Acquisition Of CTS International Holding B.V.

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Deal Diary

Sagard Acquires EuroDough from Sara Lee

Sara Lee, the US corporation behind brands such as Douwe Egberts coffee, is continuing to retrench from Europe by agreeing to sell EuroDough to Sagard Private Equity Partners for €115m.

EuroDough, a chilled dough subsidiary headquartered in France, employs 430 staff and in fiscal 2011 made net sales of $184m (€134.5m).

The agreement follows Sara Lee's decision to sell its European branded clothing business, including Playtex and Wonderbra, to private equity firm Sun European Partners in 2006.

Jan Bennink, executive chairman of the board at Sara Lee, said the latest deal will allow the NYSE-listed corporation to “focus on its core coffee and tea activities.

Wilfrid Lauriano do Rego , Partner at KPMG Transaction Services, commented ; “We have performed the vendor due diligence for Sara Lee Corp on this transaction.”

Sagard Acquisition Of EuroDough

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Ludwig Beck am Rathauseck Textilhaus AG Acquires Feldmeier

Ludwig Beck am Rathauseck Textilhaus AG (Ludwig Beck) has announced that it has acquired all shares in Feldmeier GmbH through its 100% subsidiary Ludwig Beck Beteiligungs GmbH. Feldmeier GmbH holds a 17.57 % interest in Feldmeier GmbH & Co. Betriebs KG (Feldmeier KG).

Together with the 50.1 % share in Feldmeier KG acquired in the year 2001, Ludwig Beck now owns 67.67 % of the real estate company. The price for the shares amounted to EUR 10.1 million. The remaining minority shareholders of Feldmeier KG have already determined within the scope of their estate planning that their shares in Feldmeier KG totaling 32.33 % shall pass to Ludwig Beck Beteiligungs GmbH after their demise. Hence, 100 % of the real estate at Marienplatz in Munich will be under the umbrella of Ludwig Beck in the future.

The team of BTU TREUHAND GmbH (BTU) representing “Ludwig Beck am Rathauseck-Textilhaus Feldmeier AG” was led by Ulrich Schneider, equity partner, and Wirtschaftsprüfer Florian Bendel, associate partner, within BTU GROUP.

Ludwig Beck am Rathauseck Textilhaus AG Acquisition Of Feldmeier GmbH

“FEP is a truly extraordinary company with an exceptional management team. We are very proud to have been able to support the company’s highly successful development over the past five years”, reflects Clemens Busch, Managing Partner of Steadfast Capital.

When Steadfast Capital acquired its participation in FEP in December 2006 it was attracted by the impressive development of this Eastern-German company into a leading international producer of electric connectors and oil pressure switches for the automotive Steadfast Capital assisted industry. management in the continuation of its growth strategy, which included the construction of a new production facility in Pirna and the establishment of a fully owned subsidiary in China, one of its major growth markets.

Steadfast Capital also supported management in guiding the company successfully through the automotive crisis of 2008/9.

“After positive development as an independent company FEP will now have better growth opportunities as part of a larger more diversified global organisation,” explains Dr. Markus Geiger, an Investment Principal at Steadfast Capital who coordinated the sale process, “expansion in the Americas and Asia will be accelerated alongside further penetration of existing customers with a wider product and service offering”.

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Steadfast Capital has sold its majority share in FEP Fahrzeugelektrik Pirna GmbH (FEP) to an American strategic investor for an undisclosed amount. The transaction resulted in an investment multiple of x4.2 and an IRR of 33% for the funds advised by Steadfast Capital.

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Seventy Three

Deal Diary

AXA Private Equity acquires Photonis AXA Private Equity, the leading European diversified private equity firm, signed an agreement to acquire a majority stake in Photonis from Astorg Partners.

The acquisition has the full support of Photonis’ existing management team, headed by its CEO, Goossen Boers.

The challenges have been the ones generally faced in similar acquisitions of international groups where several foreign jurisdictions are involved. In addition, the acquisition was made through a double-luxco structure which has become the standard structure for LBOs of this size in the French market.

Both the complex structure of the acquisition and the international character of the transaction render the completion of the financing of the acquisition a challenging matter and require a very good knowledge of the legal issues that arise under doubleluxco structures and an on-going coordination with the different international offices of the firm.

Gide represented the lenders, namely, ING Bank NV (and their Belgium counterpart, ING Belgium SA), Société Générale and IKB Deutsche Industriebank AG, Paris Branch.

Fernand Arsanios led the team.

COMPAREX Acquisition Of IRIS Unified Technologies Pvt. Ltd.

The COMPAREX Group has taken another strategic step forward in pursuit of its international growth strategy by acquiring Indian software consulting and technology services specialist IRIS Unified Technologies Pvt. Ltd. The acquisition, closed on October 14th, follows the foundation by COMPAREX of an Indian subsidiary in Delhi earlier this year as part of its expansion in the Asia Pacific (APAC) region.

“Challenges we faced were in the Structuring the deal which included theShareholder’s Agreement, Share Valuation, Operational and Management hand over clauses and some other Compliance Issues.

“To overcome the same technical discussion were held and creative structuring solutions were agreed upon in consultation and to the satisfaction of the consultants of the acquirer keeping in mind the prime interest of the shareholders and the management of the acquired company.”

The Tax Team of Singhi Chugh & Kumar, Chartered Accountants, New Delhi (www.sckonline.net) acting onbehalf of IRIS Unified Technologies Limited assisted is a very effective tax friendly solutions for the deal.

AXA Private Equity Acquisition Of Photonis

COMPAREX Acquisition Of IRIS Unified Technologies Pvt. Ltd.

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Eastman Kodak Company (NYSE:EK) has completed the sale of its Image Sensor Solutions (ISS) business to Platinum Equity in a move that will sharpen Kodak’s operational focus and strengthen its financial position.

While the financial details were not disclosed, Kodak will have continuing access to the image sensor technology involved in this transaction for use in its own products.

“Image Sensor Solutions is a business that is well-positioned in the highperformance imaging markets in which it participates,” said Pradeep Jotwani, President, Consumer Digital Imaging Group, and Senior Vice President, Eastman Kodak Company.

“This is a great opportunity to acquire a business with an impressive record for delivering innovative solutions to customers around the world,” said Brian Wall, the partner at Platinum Equity who led the team pursuing the acquisition, “We are proud to have forged a unique divestiture solution in partnership with Kodak that serves the best interests of everyone involved.”

Platinum Equity Acquisition Of Kodak’s Image Sensor Business

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Seventy Four

Kodak Sells Image Sensor Business to Platinum Equity

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Deal Diary

Argos Soditic Acquires Marchegay Technologies Argos Soditic has acquired Marchegay Technologies by way of a majority MBO alongside the management team.

After 10 years within the Richel Group, Marchegay Technologies regains its autonomy through the MBO with Argos Soditic.

Franck Champain, CEO of Marchegay Technologies comments: “The conclusion of this MBO with Argos Soditic provides new impetus to consolidate the current positions and acquire a significant market share both in the renewable energies market and in low-energy buildings. “ Gilles Mougenot, Chairman of Argos Soditic France adds: “We are delighted to be able to accompany the management team in its ambitious development project. Marchegay Technologies has numerous advantages which will enable it to reinforce its position as leader in the glass building market and to continue its growth in the very promising renewable energy sector.”

Argos Soditic’s team consisted of: Gilles Mougenot, Karel Kroupa & Frédéric Quéru.

Marchegay Technologies’ team consisted of: Franck Champain, Gérard Parpaillon & Laurent Poissonnet.

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Mendix Closes $13 Million Series A Funding Round

Mendix (www.mendix.com), a leader in the PaaS (Platform-as-a-Service) market, has closed a $13 million Series A round of financing. The round was led by Prime Ventures, with HENQ Invest following on its earlier seed investment. The investment will support the company’s international expansion and fuel its global sales efforts, building upon its fast growing partner network and user community.

Mendix mandated LD&A at the end of 2010 to support an international process that led to this $13m fundraising. The competitive auction led to several offers, including American investors.

Marc Deschamps, Founding Partner of LD&A and Sandrine Vergnory-Mion, VicePresident at LD&A and Head of Software Practice drove this transaction to completion. Marc Deschamps commented: “The challenge was to demonstrate the very high impetuous for international growth in the PaaS model. LD&A leveraged Mendix’ excellent SaaS traction at the beginning of 2011. “

Norton Rose advised Prime Ventures on the deal. The Norton Rose team was led by Amsterdam based partner Marcel van de Vorst, assisted by junior associate Coen Barneveld Binkhuysen. Also the notarial team of Norton Rose Amsterdam was involved comprising Geert-Jan van Rijthoven (partner/notary) and associate Pauline Margry. Marcel van de Vorst: “Norton Rose drafted and negotiated the transaction documentation. The notarial deeds were executed by in-house notary Geert-Jan van Rijthoven. The founders were advised by Lexence”

ASSA ABLOY acquires Metalind ASSA ABLOY has acquired Metalind in Croatia, the market leader for fire rated, flame-retardant and firebreak doors for commercial applications and special closures.

"I am very pleased that Metalind is joining the ASSA ABLOY Group. The acquisition is another important step in our growth strategy on the emerging markets” says Johan Molin, President and CEO of ASSA ABLOY. "Metalind’s focus on customised fire doors, with its significant installation activity, along with its large customer base, will give us a great opportunity to accelerate the development in the Balkan region,” says Tzachi Wiesenfeld, Executive Vice President of ASSA ABLOY and Head of Division EMEA. ”We believe that ASSA ABLOY is an ideal partner to utilise Metalind’s potential further”.

Metalind was established in 1996, has 120 employees and is headquartered in Bjelvoar, Croatia.

Sales is expected to reach EUR9 M in 2011 (approx SEK 82 M) with a good EBIT margin and it will be accretive to EPS from start.

Mendix Closes $13 Million Series A Funding Round

ASSA ABLOY Acquisition Of Metalind

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Seventy Five

Deal Diary

Vespa Capital supports the management buyout of WSP Textiles

Vespa Capital has supported the management buyout of Milliken Woollen Speciality Products, which has been renamed WSP Textiles.

WSP is an acronym formed from the founding owners of the mill: Winterbotham, Strachan and Playne.

The company has been producing cloth since the 16th century. WSP returns to British ownership after it was acquired

by US group Milliken & Company 20 years ago.

The deal was led by chief executive David Smith, sales director Duncan Kettell and manufacturing director Malcolm Fallows. Michael Henderson, a former director of the textile conglomerate Coats Viyella, has joined the company as non-executive chairman.

“All 160 of the employees at the group will keep their jobs”, said chief executive David Smith.

The WSP Environment and Energy Team was led by Emma Farthing, Global Service Line Lead for Transactions Vespa Capital assembled an advisory team that was able to work together quickly and efficiently with them; WSP’s main interactions were with the legal team and Vespa.

ZOOM Acquires Portables Unlimited Zoom Technologies, Inc. today announced it has signed a definitive agreement to acquire a 55% share of Portables Unlimited LLC ("Portables").

This strategic acquisition is the first of its kind for a China-based handset manufacturer to join forces with a US cellular distributor.

"We are so excited about the opportunity to merge with a quality handset manufacturer that will enable Portables additional growth opportunities," said Raj Amar, CEO of Portables.

"We are looking forward to the opportunity to grow our business and the strength this combined entity partnership can deliver," said Jonathan Blood, Senior Director National Dealer Programs, T-Mobile USA. "This move is not only a fast track for us to enter the US market, but also will enable us to accurately target the right product at the right price, which is the key to a successful launch," stated Leo Gu, Chairman and CEO of Zoom Technologies.

Marks Paneth & Shron LLP is the independent auditor and tax advisor for Portables Unlimited LLC and advised them on this acquisition.

Vespa Capital Backs WSP Textiles MBO

ZOOM Acquisition Of Portables Unlimited

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Seventy Six

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Skyline Plaza shopping centre acquired Allianz has taken an 80pc shareholding in the Skyline Plaza – a new shopping mall due to open in Frankfurt/Main in autumn 2013. It’s been sold by CA Immo Deutschland GmbH and ECE, although they have each retained a 10pc stake in the property. The total investment volume is around €360 million.

“Allianz’s investment in the Skyline Plaza is another highlight of our investment activity in Germany,” declared Stefan Brendgen, CEO of Allianz Real Estate Germany.

Thanks to the presence of ECE and CA Immo, we will have two outstanding partners at our side during both construction and subsequent operation. This acquisition takes us a major step closer to our goal of increasing the retail share in our portfolio.

Jones Lang LaSalle has acted as buy-side advisor in

this transaction,performing a commercial due

diligence on behalf of Allianz.Anke Haverkamp

MRICS led the team, consisting of Thomas Wycislo

and Marius Ohlsen, led by myself.

Allianz Acquisition Of 80% Shareholding in Skyline Plaza Shopping Centre Buyside Commercial Due Dilligence

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Deal Diary

smartclip Acquisition

Adconion Media Group has affirmed its position as a market leader in online video advertising following has acquired smartclip, Europe’s leader for digital video advertising.

The impact on Adconion’s operations will be immediate, with smartclip’s global network of in-stream and connected TV distribution partners increasing the volume of exclusive inventory available across Adconion’s digital distribution platform.

This strategic acquisition will significantly strengthen Adconion’s position in online video in its existing markets and accelerate the deployment of its digital distribution platform into the emerging markets of Eastern and Central Europe and into the segment of Connected TV. The smartclip business with its expertise in digital video advertising will complement Adconion’s existing product range. The proprietary in-stream video and Connected TV technology of smartclip will be integrated with the Adconion platform, which is already delivering targeted ads and content across display, email, social and both in-banner and in-stream video.

Digital Capital Advisors LLC based out of NY and Dusseldorf sourced, fully managed and closed this transaction.

The deal team was led by firm CEO/Managing Partner, Jay MacDonald with assistance from Garrett Taylor, Brandon Quartararo and Michael Mizrahi.

Adconion Media Group Acquisition Of smartclip

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SEB invests in Teknikmagasinet with a 40 per cent share

The deal team of Magnus Ramström, Babak Etemad and Johan Wolf is impressed with Teknikmagasinet and excited about the continued growth possibilities.

Etemad, senior investment manager, says: “Teknikmagasinet’s success to date is based, to a large degree, on the company’s knowledgeable and dedicated staff, ability at all times to offer an exciting and affordable range and provide excellent service.”

Ramström, senior investment manager, continues: “We are looking forward to working with the company's other owners to develop the company through continued growth and improved profitability.”

Jannis Östlund, CEO of Teknikmagasinet, comments; “SEB’s venture capital business is a capitalstrong and long-term owner with lengthy experience of working with developing entrepreneur-driven companies. We look forward to benefiting from that experience, SEB’s financial knowledge and its network, which will contribute to our continued Nordic expansion.”

Swedbank were the debt provider for the deal. The Swedbank team consisted of Carl Wahlström, Anna Elvander and Carl-Axel Linder.

SEB Acquisition Of a 40% stake in Teknikmagasinet Debt Provider

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Tinubu Square Acquisition

Gimv divests the largest part of its minority stake in Tinubu Square, a provider of credit risk solutions, to the French sovereign wealth fund, Fonds Stratégique d’Investissements (FSI). The remaining stake is part of an arrangement between Gimv and the management of Tinubu Square allowing both parties to sell / purchase their stake within the coming 30 months.

“Our main challenge, in order to assess Tinubu Square growth potential, was to determine the competitiveness of Tinubu Square’s very specific and unique offers for its different type of clients (corporations and insurers). It required a strong understanding of trade credit insurance issues, complex cost-savings modeling and interviews with corporate CFOs and insurance companies top executives.”

Estin & Co’srole in the transaction was to assist FSI by providing a strategic duediligence report on Tinubu Square. The team was led by Marco Maeder (Vice-president) and Joachim Vallée (Manager).

GP Bullhound acted as exclusive financial adviser to both Gimv and Tinubu Square. GP Bullhound has a long-standing working relationship with Gimv including working on the private placement of Private Outlet.

Julien Oussadon (Vice President) led the transaction.

Steven Coppens, Partner at Gimv commented “GP Bullhound advice was instrumental to the success of the transaction. Their extensive relationships with leading financial sponsors around the world and strong knowledge of the SaaS sector has given us great support in this successful divestment process.”

Fonds Stratégique d’Investissements (FSI ) Acquisition Of Tinubu Square

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Deal Diary

William Blair and Business Development Asia Announce Global Strategic Alliance William Blair & Company has completed a growth capital investment in BDA by acquiring approximately 10% of BDA’s equity. Additional financial terms have not been disclosed.

With this partnership, William Blair’s investment banking group expands its international capability, in cooperation with BDA’s well-established teams in Tokyo, Seoul, Mumbai, Hong Kong, and Bahrain. William Blair also deepens its existing global presence through cooperation with BDA’s teams in Shanghai, London, and New York.

This partnership offers clients added confidence that William Blair can locate the best investors and strategic parties, no matter the location, and enhances BDA’s ability to serve its clients in transactions beyond Asia.

Douglas Hand, a founding partner of Hand Baldachin & Amburgey LLP, led the legal team for Business Development Asia, supported by HBA associates Andrew Lottman and Kelley Smith.

The legal documentation was prepared and negotiated opposite William Blair’s counsel Sidley Austin LLP.

William Blair & Company Acquires Approximately 10% of BDA’s equity

Unither Pharmaceuticals acquired

Barclays Private Equity (‘BPE’) has acquired a controlling stake in Unither Pharmaceuticals (‘Unither’ or the ‘Group’) in a buyout for an undisclosed sum. ING Parcom Private Equity (‘ING’), and the group’s long-standing shareholders, CM-CIC Investissement and Picardie Investissement, are reinvesting in Unither and will act as minority shareholders.

Completion of the transaction is subject to standard regulatory clearances.

This restructuring of the Group’s share capital is part of an ambitious strategy to pursue organic and external growth over the next five years.

Eric Goupil, President of Unither Pharmaceuticals commented: ‘Our financial partners, especially ING Parcom Private Equity, have enabled us to make a success of 2006-2011, which has been a significant period for the group’s development, marked in particular by the strategic acquisition of a site in Colomiers. The backing of Barclays Private Equity should enable us to continue this development and serve existing and future clients effectively in their specific markets.’

Challenges came from a more specific focus on key markets, outlined after we had completed the strategic planning exercise, and in a context of double-digit growth in those markets. We overcame theses challenges through in-depth market research and interviews in the relevant local markets.

Roland Berger acted on behalf of ING Parcom and Unither on the deal, reinforcing a long-standing relationship with ING Parcom and several experiences in the field of contract manufacturing. Patrick Biecheler Project Manager led the team.

Barclays Private Equity (‘BPE’) Acquisition Of Unither Pharmaceuticals

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Vetcare/ Rowe merger

Vetcare Limited (“Advanced Vetcare”) and Rowe Veterinary Group (“Rowe”) have merged created a veterinary services platform.

Advanced Vetcare is the largest veterinary group in the south west. The business consists of four separate first opinion brands, Bath Vet Group, Unicorn Vet Group, Natures Vet, Cat Clinic, a high quality 24 hour veterinary hospital with a veterinary referral service and a standalone high growth online pharmacy business, Pet Drugs On-Line, which offers prescription and non-prescription veterinary medicines direct to consumers.

Rowe, a leading veterinary group based in Bristol and South Gloucestershire, consists of four surgeries including a purpose built 24 hour veterinary hospital and established veterinary referral and out of hours emergency services. The business is very well established having been founded in 1948.

The management team will be joined by Terry Norris, Chairman and Amanda Davis, Financial Director.

Osborne Clarke acted for August Equity in three acquisitions of vets' practices as part of its buy and build strategy in this sector. The Osborne Clarke team was led by partner Paul Cooper and Amy Salmon.

Lockton Companies LLP acted for August Equity to carry out risk and insurance due diligence. Philip Dearn, Healthcare Practice Leader led the team.

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Seventy Eight

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