Acquisition International September 2011

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September Issue 2011

ACQUISITION INTERNATIONAL The Voice of Corporate Finance

Incitia Ventures partly exits Algeta at an 8x multiple

Also in this issue... • Latin America and the M&A Boom • Handling Collective Redundancies • Doing Business In Mauritius

www.acquisition-intl.com


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Doing Business in Mauritius

Editor’s comment

This month European firms have abandoned domestic markets and tangoed themselves in South America, setting up a total of 90 add-on transactions in the first quarter, which dipped slightly to 77 in the three months to June. South American deals including Colombian Grupo EMI by Nordic Capital-backed Falck as well as Brazilian Pentec Industrial’s sale to Industri Capital’s Schenck Process have constituted almost ten per cent of activity by volume. Hot on trend, AI digs into the market a little deeper on page 12. Carrying on the Latino theme, it has also been reported this month that Spanish private equity is back to 2007 levels driven by international firms such as CVC buying Capio, Blackstone backing Mivisa and Permira's investment in Opodo. With Latin America booming and Spanish M&A out of its siesta, it begs the question, who’s next on the M&A shopping list? According to Allen & Overy, the UK currently offers the best growth opportunities in Europe over the next two to three years, with China, the US and Brazil being key growth areas internationally. With the voting now closed for the “Acquisition International Magazine Legal Awards 2011” and nominations being counted, the AI team would like to take this opportunity to thank everyone who took time out their busy schedules to define today’s legal landscape – the response was truly overwhelming! The winners will soon be announced… Enjoy the issue! Charlotte Abbott, Editor charlotte.abbott@acquisition-intl.com

Contents

23

News

4

Deal Guru

6

Lead Mandate

10

Incitia Ventures partly exits Algeta at an 8x multiple

Sector Spotlight

Latin America and the M&A Boom Handling Collective Redundancies Romanian Fund Industry The New Era of Banking Regulation Doing Business in Mauritius The New Era of Custodian Services How to Attract Foreign Investment International Company Formations: Doing Business Around the World Managing Transfer Pricing Risks in M&A Transactions What's in a Name? Doing Business in the Isle of Man Employment Law issues in M&A Transactions Sustainable Finance in the Netherlands The Life Science Litigator Global Patterns of Project Finance The Greek Fund Industry

Deal Diary

12 14 19 20 23 28 30 35 47 51 52 53 58 60 62 63 66

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. For more information visit www.acquisition-intl.com Production by Grapevine Print & Marketing Ltd. 01903 531 531.

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News

Market volatility sparks fears over M&A debt sales There are rising concerns in the city that the current period of financial market volatility will make it harder to carry out the billions of dollars of pending debt sales needed to raise money for buy-outs and other deals struck this year. According to bankers there is as much as $20bn-$25bn in loan offerings and junk bond issues tabled over the coming months tied into M&A activity. Robin Johnson, city corporate partner at international law firm Eversheds, comments: “Long term structural debt, particularly so called private placements or high yield debt issue to the US institutional investors and commercial paper issues, are the life blood of multinationals generating as they do a steady flow of money. Yields and deal terms have been very favourable for insurers in recent times although rating agencies have been under pressure to review the procedures used to classify ratings. “Under current market conditions we may well see the cost of borrowing moving from record lows towards levels which are more historically normal, having the effect of potentially reducing M&A valuations. However, it is important not to over dramatise the severity of the situation. A strong cash flow issuer is still well placed to access the markets. Whilst it is true that highly leveraged situations could be adversely affected, M&A remains buoyant with a number of mid-market deals in process, which would imply that the market is not yet frozen as it was in 2008 / 2009.”

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Dee Stirling is to join The Miles Partnership, a leading boutique search firm, as a partner.

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ee began her career in executive search in the 1990s, at Whitehead Mann where she was a member of the Financial Services Group. In 2005, she established her own executive coaching business, Dee Stirling Executive Coaching, which specialised in developing the careers of senior business leaders who were at the top of their game, including senior bankers and captains of industry. Earlier this year, Dee helped launch The New Entrepreneurs Foundation with Lord Davies of Abersoch, Sir Nigel Rudd and Oliver Pawle. The aim of the Foundation is to create a new generation of outstanding entrepreneurs who will play a role in Britain’s future growth and create new market-leading businesses. Dee will remain a trustee of the Foundation. “I am delighted to be joining The Miles Partnership,” says Dee. “The Firm has a formidable reputation in the industry as a strong and growing tier 1 boutique search

organisation. Its partnership structure is particularly attractive and means that clients get the best possible support and advice from l e a d i n g i n d u s t r y specialists.” “Dee brings a wealth of experience in search as well as a whole host of complementary skills, such as her languages which will be of enormous value to The Miles Partnership,” adds Simon Bartholomew, Managing Partner. “She will be tasked with developing new business in the banking, and hedge fund sectors as well as the private equity community.”

The Carlyle Group Files Registration Statement for Proposed Initial Public Offering

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ashington, DC – Global alternative asset manager The Carlyle Group L.P. has filed a registration statement with the U.S. Securities and Exchange Commission (SEC) for a proposed initial public offering of its common units. The number of common units to be offered and the price range for the offering have not yet been determined. Carlyle intends to use the net proceeds from the offering to repay indebtedness and for general corporate purposes, including general operational needs, growth initiatives, acquisitions and strategic investments and to fund capital commitments to, and other investments in and alongside of, its funds. J.P. Morgan Securities LLC, Citigroup Global Markets Inc. and Credit Suisse Securities (USA) LLC will serve as joint bookrunning managers for this offering. When available, copies of the preliminary prospectus relating to the offering may be obtained from J.P. Morgan Securities LLC, Broadridge Financial Solutions, 1155 Long

Island Avenue, Edgewood, NY 11717, or by telephone at 1-866-803-9204; Citigroup Global Markets Inc., Brooklyn Army Terminal, 140 58th Street, 8th floor, Brooklyn, NY 11220, or by calling 1-800-8319146 or e-mailing a request to batprospectusdept@citi.com; Credit Suisse Securities (USA) LLC, Attention: Prospectus Department, One Madison Avenue, New York, NY 10010, or by telephone at 1-800221-1037. A registration statement relating to these securities has been filed with the SEC but has not yet become effective. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This news release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.


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News

CommScope Completes Acquisition of Argus Technologies

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ommScope, a global leader in infrastructure solutions for communications networks, has completed its acquisition of Argus Technologies, a leading producer of innovative antenna solutions for wireless applications. Terms of the agreement are not being disclosed. Argus, headquartered near Sydney, Australia, provides a wide array of high performance, high technology antennas for base stations, stadiums and venues, and other wireless applications. The acquisition

enables CommScope to broaden its antenna solutions portfolio, deepen its research and development capabilities, strengthen its global market presence and accelerate its growth in the wireless market. “We welcome the Argus team to CommScope and are excited about our future together as we help customers evolve their networks to new technologies and address challenges presented by today’s data hungry, on-the-go society,� said Randy Crenshaw, executive vice president and chief operating officer, CommScope.

Ten Group opens Miami office

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lobal lifestyle concierge provider, Ten Group, has opened the first of four new offices due to open within the next six months. The new office in Miami, which opened this month, will become the new regional hub for Ten’s corporate clients in Latin America. As well as adding depth and strength to Ten’s US business. It will also focus on helping global members of Ten’s Lifestyle Concierge service while they are in and around Miami, the broader US and Latin America Ten’s CEO, Alex Cheatle, said; “Miami is strategically important to Ten because it is an important financial and media centre for Latin America. Our services are of great value to high-networth individuals visiting the region for business and pleasure.�

ÇŻ ÇŻ Çż Čą Š Âœ Â? ÂŽ › Âœ Čą Â’ —ȹ Š ǯ ÇŻ Čą Â˜ÂĄČą ĹžĹ? Ĺš Ĺ– Ĺ– Ĺ— Ĺ– Ĺž Ĺ–Čą

Čą –œ Â? ÂŽ › Â?Š –

Çą Čą Ƹ Ĺ™ Ĺ— Čą Ĺ˜ Ĺ– Čą Ĺ™ Ĺ– Ĺ— Čą Ĺ› Ĺ› Čą śś Çą Čą Â’ —Â? Â˜Č“Â› žœ Âœ ÂŽ • • ÇŻ —•

   ǯ › žœ Âœ ÂŽ • • ÇŻ —•

The team on the ground will provide lifestyle concierge in English, Spanish and Portuguese 24/7 with support from Ten’s other international offices. The new Lifestyle Managers bring a wealth of experience in specialised regional travel, restaurants, ticketing and retail. As with all of Ten’s offices, the new Miami team uses Ten’s global integrated systems to ensure it delivers the same high level of customer service synonymous with the Ten brand. Across the business, Ten manages and delivers its personalised service to more than 800,000 private individuals on behalf of 70 organisations including Barclays, Citi and Lloyds. This makes Ten the most successful and fastest growing lifestyle management company in the world.

Ten is the only international concierge company to use a single global system to seamlessly manage the tens of thousands of requests it receives every month. This has the benefit of ensuring that members’ requests are worked on by the most appropriate person within Ten no matter which office they might be operating from. Further offices are planned in Sao Paulo, Singapore and Shanghai.

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The

The Deal Guru

DEAL

GURU Chris Tossell

From mind map to mindshare: realising your 100-day plan The relationship between the general partner and the portfolio company is one of balancing the needs of both parties. The private equity space has changed a great deal over the past few years with (GP) needing to ensure their acquisitions are up to speed as quickly as possible. Gone are the days when expanding price-earnings multiples could be solely relied upon to increase return on investment. Today there is much more intervention to drive operational performance. The creation and implementation of an initial 100day plan brings focus to the proceedings for the acquired company and for the GPs so that the two are working in tandem to meet the goals agreed between both parties and set the stage for future growth. Central to this process is the need to monitor and measure performance and this is where technology can play a huge part. Chris Tossell, Commercial Director for Access UK, discusses how technology can deliver the information required to keep investments on track. The sudden shift from the stress and euphoria of completing a management buyout (MBO) to the realisation that your organisation may be about to experience a significant change in emphasis and direction can come as quite a shock. You may have

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thought you had a well run, well thought out business but when the general partners (GPs) get involved alongside the non-executive directors (NEDs), suddenly the blinkers are off and the searchlight is probing every aspect of where, what and how you conduct your business. This is because these people bring wider experience and expertise to the table which provides invaluable insight as to where changes can be made. One of the most positive things within our own recent experience of this was discovering the GPs reaction on shining that searchlight and discovering suboptimal elements of the business, and let’s face it, we all have those in our imperfect world. The reason why it was such a positive experience for us is because every single one of these suboptimal elements is seen not as a problem, but as an opportunity. This realisation should form the foundation for building the 100-day plan in the first place. It may be a plan involving change, rethinking, reforecasting and reshaping, but it will be a plan that should lead to positive outcomes. As an organisation, we have embraced mind mapping as a tool for brainstorming in groups and generating ideas. There are some excellent software products available which streamline the process allowing the individuals to focus on the initial ‘100-day plan’ brainstorm. We also, on occasion,

employ Edward de Bono’s Six Thinking Hats to analyse and quickly accept or discard any idea. The gut feel ‘red hat’ is particularly useful in that initial brainstorming session and if you haven’t experienced the Six Thinking Hats I would recommend taking time to learn more about this process. This group activity, which can also involve the allocation of responsibility, priority and timing, guarantees significant mind share among the group to delivering on the 100-day plan. That mind map itself then needs to be turned into a project plan. The better mind mapping software tools completely automate this process allowing you to convert your mind map directly into a project plan. You can choose to use MS Project or one of the other software project planning tools. In our case, we considered MS project to be a sledgehammer to crack a nut and we fell back on the old faithful – an Excel spreadsheet. The spreadsheet itself was an automated output from the mind mapping tool. We continued to use the mind map to add files, links, notes and comments on progress and the output was done on a weekly basis to an Excel pivot table circulated to all the people involved in delivering the plan. Being a pivot table it could be filtered and searched for easy review. This was a necessity given that we had brainstormed over 200 tasks that had to be completed across six major areas. Some of these tasks were critical as they were legal


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The Deal Guru

requirements to fulfill conditions arising from the completion of the MBO. Software aside, as with any project, nothing gets done until someone does something, and the appointment of a good project manager to oversee the delivery is crucial. That person should, in an ideal situation, have that elusive capability to chase people without making them feel they are being chased and at the same time make the individual feel they really need to deliver on their task for the sake of both the project manager and the business. The final slice of technology is the sharing of the 100-day plan progression. Whether by way of SharePoint, file server allocation or by Dropbox (or one of its numerous equivalents), everyone involved needs easy access to the plan, related documents and

ongoing notes. Inability to access information in today’s cloud driven society would be inexcusable and it should be available on desktop, tablet, mobile and remote web browser. As the project manager finally wrestles the 100-day plan project to the ground (and being realistic, this will be some days after the 100 day plan date!), he/she should deliver their report to the Board on the successful outcome and the further initiatives that have been driven out of the entire process. Selection of the right tools will allow this report to be delivered in great part directly from the tools used (hence our reference above to continuing to add to the mind map to provide much of this automated output), with minimal additional input other than a neat and concise executive summary. Job Done!

Chris Tossell info@theaccessgroup.com www.theaccessgroup.com T: 0845 345 3300 The Old School Stratford St Mary, Colchester Essex, CO7 6LZ, UK.

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Sector Talk

Industrial Products F

rom the period 2006 to present, the most prominent industry sector for global private equity-backed deals has been the industrials sector. Of the 14,222 number of global deals made during this period, 4,229 (30%) of them were made in industrials accounting for USD 338.9 billion (17.3%) of aggregate capital. The number and aggregate value of industrials deals peaked in H1 2007 at 505 deals representing USD 62.2 billion. However, because of the global economic slow-down after this period deal flow activity steadily declined and deal volume and sizes reached a trough in H1 2009 at 198 deals, equating to just USD 4 billion. Deal-flow in the industrials sector has since then witnessed an upturn, in particular from the second half of 2010 onwards, with 351 deals valued at $31.7bn announced in the sector during H1 2011. When looking at deals by region, the majority of PE-backed industrials deals are made within North America, and from 2006-present this

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region has seen the largest amount of deal volume. Of all industrials deals made in 2011 YTD, 52% have been in North America. Europe and Asia & ROW accounted for 35% and 13%, respectively. Despite North America attracting the majority of deal volume, of the 5 largest PEbacked industrials deals made YTD, only one of them has been based in North America. France-based SPIE has been the largest industrials deal made in 2011 to date. AXA Private Equity, Clayton Dubilier & Rice and Caisse de depot et placement du Quebec all clubbed together to acquire SPIE for EUR 2.1 billion in August 2011 giving PAI Partners an exit in its investment in the company after it acquired SPIE in July 2006 for EUR 1.04 billion. Other notable industrials deals announced this year include the $2.1 billion acquisition of Husky Injection Molding Systems by Berkshire Partners and OMERS Private Equity, and the ÂŁ1 billion acquisition of RAC by Carlyle Group.


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Sector Talk

Number of Industrials Buyout Deals By Region: 2006 - 2011 YTD

Proportion of Industrials Buyout Deals By Region: 2006 - 2011 YTD

Aggregate Value of Industrials Buyout Deals By Region: 2006 - 2011 YTD ($bn)

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Lead Mandate

Incitia Ventures partly exits Algeta at an 8x multiple O

n the 7th of July 2011 Incitia Ventures announced that it has partly exited its investment in Algeta ASA (OSE: ALGETA) by selling 50% of its shareholdings at a total Algeta equity valuation of US$ 1, 4 billion. The transaction realizes a profit of NOK 112 million representing an 8x multiple for Incitia Ventures. Before the transaction Incitia Ventures was the third largest shareholder in Algeta ASA. Acquisition International speaks to, Dr Jens Petter Falck, partner in Incitia Ventures and former long time board member in Algeta about the rationale behind the disposal and about their plans for the capital raised. Incitia Ventures has through their first fund Selvaag Venture Capital been investor in Algeta since 2002 and was for many years the sole leading venture capital investor in the company. In 2003 Algeta engaged on a strategy with the aim of developing Algeta into a vertically integrated pharmaceutical company developing novel therapies against cancer based on its alpha-emitting radiopharmaceutical platform. Building of an international board was initiated in 2004; equity from international life science funds was raised first time in 2005. The company went public in 2007. In 2009 Algeta closed a USD 800 million partner agreement with Bayer Schering Pharma AG. In June this year Algeta announced a positive outcome for the pivotal phase III study for its lead product Alpharadin. What was your role in the company and specifically how long were you contemplating the sale before you started in earnest? How did you prepare the company for sale? “Incitia Ventures has been invested in Algeta since 2002 and we have followed the company since then. For five years from 2003 to 2008 I was a very active member of the board and in the later years also member of the remuneration and nomination committees. I left active board duty in 2008 and the nomination committee in 2009. From 2008 to 2010 I served as deputy board member. “Since 2010 we have focused solely on our role as the third largest shareholder. However, given our history with Algeta we have a very solid understanding of the company, the technology and its prospects. Thus

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no particular preparation was necessary except for following the company closely. Since Algeta is listed on the Oslo Stock Exchange the preparation included building a good relationship with the investment bankers that most actively followed the Algeta stock.” What was the decision process behind selling Algeta? How did you find the right buyer? “We have been investor in Algeta for nine years, being part of building a company from the seed stage through a successful phase III clinical trial. Algeta has great prospects going forward, but it was time for us to start securing our profit.


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Lead Mandate “Although we retained a 50% of our shareholding going forward, we ensured the best possible price was achieved by making the decision to not start selling our shares until after the results from the pivotal phase III clinical trials for Algeta’s lead product were made public. “For pharmaceutical companies this is the most important value driving event, driving both a significant surge in valuation as well as trading volume. It was of course a risk that the results from the clinical trial would be negative. However, given our deep understanding of the technology and the clinical trials we felt fully at ease with taking this risk. “ What was the most difficult element of doing the deal? “The most common exit route for venture capital funds is trade sales. Compared to all the trade sales we have done in the past, this transaction was smooth sailing. The single most important element in doing the deal was the detailed timing of the transaction with respect to mood in the stock market in general, the psychology in the Algeta stock in

particular and the entrance of new large international funds as Algeta shareholders ensuring a buy-side driven transaction. “ Was the process of selling as you expected? “The technicalities of the process were very much as expected. What I hadn’t expected was the psychological dimension driven by the very rapid transactional process compared to a traditional trade sale.” If you were starting the process again, what would you do differently? “We would have done the transaction the same way and used the same banker. As a stock market sale there are only so many ways to do a transaction and the process we followed worked out very well for us. Out of the advisers you used on the deal, who proved to be most valuable and why? “In selling shares over the stock market the only adviser we used was our investment banker DnB NOR Markets that proved to be very valuable in identifying a high quality

international buyer that had followed the stock for a long time and wanted to increase their exposure after the announcement of the successful clinical phase III data.” On a lighter note, what is the best piece of advice given to you? “Selling significant ownership stakes over the stock market is something totally different than driving a private trade sale as is the normal exit route for venture capital funds. One is much more exposed to changes in the general stock marked climate that influences not only the market value but also the liquidity in the stock trading. On the other hand, the process goes infinitely much faster. What proved successful for us was a very clear strategy for when to sell that allowed us to grab the opportunity when it arrived.”

Dr. Jens Petter Falck jpf@incitia.com www.incitia.com P.O. Box 544 Økern, 0512 Oslo, Norway

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Latin America and the M&A Boom

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Latin America and the M&A Boom

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ergers and acquisitions are currently booming in Latin America, a trend which is set to continue at full speed. In general, Latin American M&A activity this year has been overwhelmingly concentrated in telecoms, power, metal and mining, and materials. The significant increase in deal-making activity is being driven by a number of factors, including high currency values of acquirers, lower costs of capital, investment and financial reforms, improved bankruptcy laws, the sale of distressed assets, and the need to consolidate due to increased competition. Latin America has recovered well from the global economic crisis and is improving at a faster pace when compared with other regions. Acquisition International speaks to the experts… Camarena Abogados, S.C. was founded on 1995, as a Law Firm dedicated to the practice of law, providing our clients an integral service as natural persons and regarding their companies, to whom we add at their efforts and projects for their adequate development, over the principal basis of acting on the prevention of possible legal matters or contingencies, and in its case, to resolve them in a quickly manner and with the less cost to our clients. One of our goals has been to grant legal advice starting from the personal and commercial necessities and understanding of our clients. Gabriel Camarena is Managing / Partner at Camarena Abogados, S.C.

Gabriel Camarena gabriel.camarena@camarenaabogados.com www.camarenaabogados.com T: 011 (52) 55 50.81.33.70 Paseo de la Reforma 2654, Lomas Altas Fifth Floor Offices 503 y 504, Miguel Hidalgo C.P. 11930, México City, Mexico.

Alejandro Sainz Orantes asainz@cervantessainz.com www.cervantessainz.com T: (52)(55)91785047 Blvd. Manuel Avila Camacho 24, floor 6, Lomas de Chapultepec, 11000 Mexico City, Mexico.

Ronaldo Rayes rrayes@rfaa.com.br fazevedo@rfaa.com.br www.rayesfagundes.com.br T: 55 11 2165-2002 Rua Líbero Badaró, 425. 11º andar. Centro. São Paulo – SP – Brasil CEP 01009-905 to offer high quality and very personal legal services. The firm’s clients range from huge international corporations to local businesses and industries. Rayes & Fagundes is a full-service firm with a very significant Corporate, Litigation and Tax practices. Rayes & Fagundes has offices in São Paulo, Rio de Janeiro and Belo Horizonte. In addition, Rayes & Fagundes maintains alliances with renowned US and European law firms. Ronaldo Rayes is Partner of Tax Area at Rayes & Fagundes Advogados Associados

Cervantes Sainz is a full service law firm actively engaged in a dynamic and complex domestic and international practice. The Firm is composed of prestigious lawyers accumulating large years of experience, who ventured to form and achieve an innovative style of organization. Its rapid and constant growth reflects the dynamic nature of a vital and healthy developing law firm. Alejandro Sainz is the Co-Managing Partner, Chairman of the Insolvency & Restructurings Practice Group and Co-Chair of the Mergers & Acquisitions Practice Group of Cervantes Sainz.

What gives you an advantage over local and global competitors in your areas of expertise? Gabriel Camarena: “Camarena Abogados, S.C. is a full-service firm focused on sophisticated business transactions and complex litigation, with personal attention to our clients and with more than fifteen years of professional experience, giving our clients opportune assistance actions with their companies and as natural personas, which regulate and prevent contingencies, and the column which sustains our services policies is the maximum priority in each issue of our clients.”

Founded in 1997, Rayes & Fagundes is ranked among the largest and most admired Brazilian law firms. The proposal of the firm is

Ronaldo Rayes: “Our firm offers complete and custom-tailored solutions, ensuring gains for our clients’ businesses. This closer

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Latin America and the M&A Boom

relationship with clients grants to our firm an advantage over our local competitors once it makes possible a better understanding of our client’s needs and, consequently, we can present to our client a advise with fits perfectly with their need. Especially in the Brazilian Legal Market, where there are hundreds of law firms which a deep and consistent expertise, this is a differential of our firm.” What do you bring to the table during a transaction, and how does this assist in getting deals through to completion? Please use any notable deals that you’ve been involved in recently to illustrate your answer. Alejandro Sainz: “Cervantes Sainz has proven efficiency in a wide range of complex and critical cross-border merger & acquisitions matters. Our M&A practice has the intellectual depth and creativity to resolve successfully virtually any type of hurdles when dealing and negotiating with counterparties. Also, we understand that in Mexico it is not only about having the “know-how” but also about providing the “know-who”. Our lawyers have an excellent relationship with officers from the most important Mexican regulatory entities. When dealing with M&A matters most of the times there is the need to obtain approvals or clearance from several authorities such as the Mexican antitrust commission and the Mexican foreign investment commission.” Gabriel Camarena: “Being involved in very successful and sophisticated business transactions, Camarena Abogados, S.C. offers such expertise and negotiation skills during a business deal, without limiting the legal assistance only to the elaboration of legal documents that bind and protect our clients needs, on the basis of a well elaborated legal strategy that provides certainty and resolves the issue in a quick

manner and cost effective for our clients.” Mergers and acquisitions are currently booming in Latin America, a trend which is set to continue at full speed. What factors have driven this? Gabriel Camarena: “Being involved in very successful and sophisticated business transactions, Camarena Abogados, S.C. offers such expertise and negotiation skills during a business deal, without limiting the legal assistance only to the elaboration of legal documents that bind and protect our client’s needs, on the basis of a well elaborated legal strategy that provides certainty and resolves the issue in a quick manner and cost effective for our clients.” Why has investor confidence returned to Latin America and not to its neighbouring regions? Gabriel Camarena: “The reason is because of the political stability that most countries in the region are having to this date and such conditions did not exist in the past, also because since the economic crisis there has been more economic growth in Latin America than in places like the United States who is a very big player in the area.” Ronaldo Rayes : “The Latin America, and Brazil, in special, has a favourable regulatory environment, especially in the foreign investment and financial areas, which ensure to investor the safety required for doing business. Such regulatory environment grants to Brazil the necessary protection against the crisis which affects Europe and US in 2008 and 2011. In addition, Latin America has an incredible consumer market which is growing exponentially in the last years.” In Latin America why has the telecoms, power, metal and mining,

and materials sectors attracted so much investor interest? What opportunities are currently available? Gabriel Camarena: “Currently some countries in the area have opened their legal restrictions to the foreign investment and such activities that were reserved for the government are now available to the private investment.” Ronaldo Rayes: “In addition to the reserves of mineral resources of quality, the Latin America countries has an established infra-structure of transportation, services and industry that ensures to investor the best environment for conducting its activities. The existence of a big consumer market in Brazilian territory it is also a competitive differential.” Do you have any predictions for the next 12 months, regarding M&A Activity in Latin America? Alejandro Sainz: “We have experienced a positive trend of new M&A matters in Mexico. We believe that the reason of such boom is that Mexico is still an outstanding place to invest. Most of the M&A matters we have been involved in this year are related to the manufacturing industry. What we have seen during the past years is that Mexico has become more experienced and technical in the production of goods. Mexico is more and more a target for companies that are looking for a place to invest and to build full-chain facilities. In the past, production in Mexico was limited to certain parts that were temporarily imported, modified and sent back (exported) to a different country for such parts to be integrated to a finished product. Nowadays, there are many industries that bet for Mexico and their engineers and technicians. The aviation industry and the vehicle industry are excellent examples of this new tendency. Many of those companies are our clients and we are keen to be part of their stories of success.”

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Handling Collective Redundancies

Handling Collective Redundancies Amund Fougner af@hjort.no www.hjort.no T: +4722471800 Akersgt. 51, 0180 Oslo, Norway

Guido Callegari g.callegari@dejalex.com www.dejalex.com +39 02 72554.1 7, Via San Paolo, I-20121 Milan, Italy

Marianne Lage Senior associate, Admission to the High Court Jonas Enkegaard Senior associate, Admission to the High Court mla@horten.dk jen@horten.dk www.horten.dk T: + 45 33 34 44 00 Philip Heymanns AllĂŠ 7, 2900 Hellerup, Denmark

Manishi Pathak / S. Valarmathi manishi.pathak@kochhar.com www.kochhar.com T: +91-11- 41115222

11th Floor, Tower A, DLF Towers Jasola, Jasola District Center, New Delhi - 110 025, INDIA

office@ksw.at www.ksw.at T: +43-1-313 74-0 Porzellangasse 4, 1090 Vienna, Austria.

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n our increasingly global economy businesses often operate on an international scale and one of the key challenges associated with that is coordinating employees and complying with the rules and regulations that govern employment, labour, pensions and immigration law in each location. The threat of redundancy has been looming since 2008 and for many firms restructuring has led to large scale dismissals. What constitutes large scale redundancy and how the process can be carried out varies from country to country and there are a number of vital steps that should be considered before, during and even after a collective redundancy programme. Acquisition International speaks to the experts... Hjort is a full-service lawfirm, with a considerable department within Labor- and Employment law including all HR-related practice. Hjort’s office is located in central Oslo, but undertakes assignments from all of Norway. As the only Norwegian member of the international alliance of leading employment law firms, Ius Laboris, Hjort has increased its portfolio of international clients with cross-border activities. Amund Fougner has for the last 30 years been partner in Advokatfirmaet Hjort DA

De Berti Jacchia Franchini Forlani was established in 1975 in Milan. Subsequently it set up fully staffed offices in Rome, Brussels and Moscow. De Berti Jacchia Franchini Forlani is an Italian leading international law firm which advises domestic and foreign clients in all areas of Italian, European and international law. Guido Callegari is Partner of De Berti Jacchia Franchini Forlani and is in charge of the Labour, Employment and Pension practice of the firm. He is a recognized expert of employment law, pension law and industrial relations. Horten is among Denmark's leading law firms dedicated to providing solutions-oriented legal advice and a comprehensive cross border services within all practice areas to the Danish an international business sectors and public authorities Marianne Lage and Jonas Enkegaard are both senior associates at the Danish Law Firm Horten. Kochhar & Co was setup in 1992 and is a full service corporate law firm. The Firm has risen from one lawyer and one India office to more than 170 lawyers and six India offices, three international offices including Atlanta, Singapore and Tokyo (representative office). Manishi Pathak is Senior Partner at Kochhar & Co. Kunz Schima Wallentin, founded in 1990, today has an expert team of more than 50 people dedicated to offering the best in legal advice and


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Handling Collective Redundancies representation especially to national and international companies and private clients. As part of ius laboris, the largest group of leading law firms providing specialised services in employment and labour law, Kunz Schima Wallentin is covering all legal aspects related to HR. Georg Schima and Birgit Vogt-Majarek are both partners at Kunz Schima Wallentin Rechtsanwälte OG. What gives you an advantage over local and global competitors in your areas of expertise? Amund Fougner: “Hjort assists employers, employers’ associations alike trade unions within all aspects of collective labor law, including collective bargaining and renewal of collective agreements. This broad practice gives Hjort an advantage.” Guido Callegari : “A significant portion of the Firm’s clients are multinational companies ranking among the 500 largest companies worldwide (Fortune Global 500). I have been dealing with collective redundancies for more than 20 years in connection with major business and corporate re-organisation carried out by Clients of the firm. Amongst other, I could mention the closing down of no. 3 Italian plants of a US manufacturer of machine tools, or the closing down of a number of stores throughout Italy of a multinational retailer of furniture. Recently we advised multinational Clients on the downsizing of their activities in Italy in the industries of automotive, chemicals, insurance, silicon rubber, ventilation.” Marianne Lage and Jonas Enkegaard : “We have the experience of having assisted many companies within different types of businesses and we have handled all questions relating to collective redundancies. Our experience covers companies with many different groups of employees and companies covered by collective agreements. Companies covered by collective agreements are different to the fact that as many collective agreements incorporate the legislation regarding collective redundancies and therefore there are often other and different rules to be aware of, including an extended obligation to negotiate with the organizations.” Manishi Pathak: “Thorough knowledge of the subject, professionals with long standing at the bar, practical business oriented approach and time efficient support are some of the key

strengths of the firm. Strong handholding of clients in various employment laws related issues and dedicated lawyers practicing employment law.”

terms of reductions of mandatory contributions to the social security system are also granted to employers hiring workers previously made redundant by another employer.”

Apart from our practical knowhow gained throughout the years, and our good knowledge of the legal system as well as with the strong support available through our Ius Laboriscolleagues we can also work on an international one.

Georg Schima and Birgit VogtMajarek: “The Labour Constitution Act (concerning the “general” dismissal regulations which also have to be followed in case of mass dismissals) as well as the Labor Market Improvement Act (concerning the special mass dismissal regulations about notifications to a works council or to the Labor Market Service) contain the main regulations.

Who is a typical client? Manishi Pathak: “The Firm acts as Indian counsel for some of the largest multinational corporations from North America, Europe, South-East Asia and Japan (including several Fortune 500 companies) and their Indian subsidiaries. The Firm also represents several renowned Indian companies.” Georg Schima and Birgit VogtMajarek : “A medium-sized or big company planning a restructuring or being affected by an economic crisis and requiring advice concerning the handling of collective redundancies (and the possible procedure/ timeline etc).” Please summarise the primary statutes and regulations that govern large scale redundancies in your jurisdiction and how they differ to other countries. Amund Fougner : “The Working Environment Act (WEA) and the tariff agreements govern large scale redundancies. Especially, the provisions in the Basic agreement, give the parties rights and obligations in the event of dismissal due to cutbacks which differ to other countries.” Guido Callegari : “Redundancies and collective dismissals in Italy are regulated by the Statute law, the main piece of which is Law no. 223 of 1991. In general terms, a redundancy plan is to be negotiated with the trade unions and the workers to be made redundant are to be selected in accordance with certain criteria set by the law. Before being dismissed, the employment of the workers to be made redundant may be suspended for a certain period of time (in general no. 1 year). During such period of time the workers are paid a wage by the National Social Security System. After the dismissal, any worker made redundant benefits from an unemployment wage for no. 1, 2, or 3 years according to their age. Benefits in

“The main difference to other countries – based on our practice - is that according to the Austrian regulations the employer has to follow certain (rather general and shortlived) notification requirements before the dismissals (as otherwise the dismissals are void) but no consent of the works council or of authorities is necessary and no longwinded notification or consultation requirements (concerning social plans or the like) which stop or defer the dismissal process exist” How has the economic crisis altered regulation regarding large scale redundancies in your jurisdiction? Amund Fougner : “Labor law regulations have been altered in favor of the employees over a number of years. Concerning collective redundancies, a provision instructs an employer to discuss with the employees’ representatives the possibility for the employees to take over the business.” Guido Callegari : “The regulation of large scale redundancies was not altered by the economic crisis, even though the Italian Government increased the funds for social relieves in favour of workers made redundant and established a regional system of shock absorbers for employees of minimal companies.” Marianne Lage and Jonas Enkegaard : “The economic crisis has not altered the regulation regarding large scale redundancies. However, due to the economic crisis there have been a few changes in the major national collective agreements which give the covered employees the right to a special allowance if their employment is terminated due to collective redundancies.”

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Handling Collective Redundancies Can you please define the process of selecting and dismissing employees? Guido Callegari : “It is up to the employer to make the selection of the employees to be dismissed on the basis of the criteria set by the law (length of service, number of dependants, organisational needs of the employer). The length of the period of notice varies in accordance with the seniority and the length of service of each of the employees to be made redundant (no. 1.5 months on average for white-collar workers). As a rule, the notice period is replaced by the payment of an indemnity en lieu of, corresponding to the salary the dismissed employee would have earned during the period of notice. A redundancy package is negotiated with the Trade Unions. Its size depends on several factors, including the financial situation of the employer.” Sabine Haiderer: “Basically if the employer can select between the employees to be dismissed (in case of redundancies) it is always recommendable to dismiss employees with better chances on the job market (and therefore – if possible - younger employees, with not many years of service, good training and not too high income). In practice – especially in connection with redundancies during an economic crisis – employers often do not have much choice and do have to dismiss whole departments or parts of a business. As older employees (and also other employees with bad chances on the job market) do enjoy a certain protection against dismissal in cases of dismissals of such employees the redundancy package basically is higher than the standard package. It is common to pay a voluntary payment amounting to x-fold the monthly salary depending on the years or service (i.e. at least one monthly salary for every two years of service – or the factor of the statutory severance according to the old system) The notice period to be respected by the employer depends on the years of service and starts with six weeks (up to two years), two months (up to five years), three months (up to fifteen years), four months (up to 25 years) and subsequently five months.” What are the key challenges of implementing collective redundancies? Amund Fougner : “To give all necessary information to the employees’ selected representatives at the earliest opportunity in order to avoid uncertainty among the employees, if possible. Further, the employees’ representatives must be given sufficient time to consult as well as the employees and the management. All-staff meetings have often a positive impact, all employees have the same information.” Marianne Lage and Jonas Enkegaard : “The key challenges of implementing collective redundancies in Denmark are dual. “The first challenge is to ensure that the negotiations with the employees or their representatives are reliable. It is often difficult for the management in the companies to understand that they do not have the power just to make decisions regarding collective redundancies without conducting negotiations with the employees. “The second challenge is to select the employees to be made redundant, ensuring that nobody is terminated unfairly or against contrary to mandatory legislation.”

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Manishi Pathak: “The key challenge legally in implementing collective redundancy is generally seeking the permission for retrenchment of workman in factories, mines and plantation with 100 or more employees. Preciscilly, there are older issues as well. “The risk of any agitation or strike or legal action by certain groups of employees also exists.” What methods do you use to avoid major pitfalls such as unfair dismissal? Amund Fougner ;“In order to avoid pitfalls it is important to instructing the clients to live up to the consulting provisions before deciding any redundancies and to apply the selection criteria thoroughly upon each employee determined for redundancy, in order to avoid unfair dismissal. Further, it is important to let the employer understand that compliance of the provisions regarding collective redundancies are important in order to carry out collective redundancies within the expected time-frame and costs.” Manishi Pathak: “The methods adopted to avoid major pitfalls such as unfair dismissal are discussions with employees amicable resolution in case of collective termination, or otherwise and / or voluntary resignation or voluntary retirement.” As we slowly recover from the downturn, how will this affect demand for your services? Amund Fougner ; We do not suppose that a slowly recover from the downturn will affect the demand for our services considerable. The society is not static. Our experience is that structural reorganization, for instance transfer of undertakings and outsourcing of production or services always will effect the size of the work-force. Guido Callegari : “A number of collective redundancies is normal even in good economic conditions. Moreover, our services in the field of employment and labour law are not limited to advising the clients on collective redundancies. An upturn would be a good, and not a bad piece of news for me.” Marianne Lage and Jonas Enkegaard : “There will always be companies that need to make collective redundancies, e.g. due to the fact that they are moving the production to other countries, to another plant in the group of companies or the like.” Georg Schima and Birgit Vogt-Majarek: “Already now the demand for our services has changed and the clients request less dismissals, collective redundancies, financial reductions etc but search our advice in connection with employment contracts, bonus programs, employee participation, more flexibility regarding working time etc. “ In what ways do you anticipate policy regarding collectively redundancies changing over the next two years? Guido Callegari: “The maximum efforts of the Italian government in matter of collective redundancies were made at the beginning of the downturn and were mainly aimed at financing social relieves for workers made redundant. For the time being I do not foresee major changes of the legislation in matter of collective redundancies over the next two years.”


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Handling Collective Redundancies

Mr. Petteri Uoti Mr. Seppo Havia petteri.uoti@dittmar.fi seppo.havia@dittmar.fi www.dittmar.fi T: +358 9 681 700 Pohjoisesplanadi 25 A, FI-00100 Helsinki, Finland

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cquisition International speaks to Petteri Uoti, partner at Dittmar & Indrenius about Handling Collective Redundancies in Finland. Dittmar & Indrenius, established in 1899, is an independent Finnish law firm focused on the quality of our services within four practice areas: Mergers & Acquisitions, Finance & Capital Markets, Dispute Resolution and Corporate & Commercial. Petteri Uoti commented: “Our aim is to provide the best legal services in complicated transactions and complex dispute resolution in our jurisdiction. We also strive to be the best long-term law firm partner in Finland for demanding corporate clients. Our Employment & Pensions practice is the leading employment practice in Finland covering all aspects of employment and pension law. “We represent both domestic and foreign companies as well as multinationals from a wide range of industry sectors. We also act on behalf of a number of governments and international organisations. One of the typical client profiles would be a Finnish medium size to large subsidiary of a multinational group.” Please summarise the primary statutes and regulations that govern large scale redundancies in Finland and how they differ to other countries. “The Act on Co-operation within Businesses (2007) contains provisions on the employer's cooperation obligation. All large scale redundancies require prior cooperation consultations with the personnel. The key issue is that the cooperation obligation (including the issue to be covered and the minimum time limits to be observed) must be fulfilled before the

employer makes a business decision directly resulting in the redundancies. Should the employer fail to observe the consultation process provided in the Cooperation Act, it may be ordered to pay each dismissed employee indemnity. The maximum amount of the indemnity is EUR 30,000 per employee. The Employment Contracts Act (2001) provides the basic rules concerning the legal employment relationship between the employer and the employee, including - the specific grounds the employer needs to make an employee redundant; - the periods of notice (from two weeks to six months, depending on the length of service); and - sanctions for the breach (indemnity from three to 24 months' salary). “The law does not contain provisions on separate severance compensations, but the employer has a strict obligation to offer other positions to the employees as an alternative to the redundancies. “An employee who has been made redundant without adequate grounds is only entitled to the indemnity; he cannot claim his position back.” Can you please define the process of selecting and dismissing employees? Can you please highlight the differences in notice periods and redundancy packages within your answer? “The employer has the obligation to carry out cooperation consultations with the personnel representatives before making any business decision directly resulting in redundancies. This applies also to business decisions made by the employer's parent company. The consultations last from two to six weeks depending on the number of employees to be made redundant. During the consultations, the parties discuss the reasons for, alternatives to and effects of the redundancies, and how the negative effect on the personnel could be reduced. “After the consultations, the employers may make the necessary decisions. Making an individual employee redundant requires that his work has been materially reduced and that he cannot be offered any other task

within the company he could perform. “The redundancies are primarily targeted towards employees whose work is materially reduced. If the employer needs to select the dismissed employees from a large group, the selection must be fair. Although the law does not contain rules on the selection (with the exception that the criteria must not be discriminatory), several collective labour agreements refer to the employee's relevancy for the employer and the length of his service and number of dependants. “The notice period – during which the employee is required to work – varies from two weeks to six months. The Finnish labour legislation does not contain provisions on redundancy packages. However, some companies offer them to the employees to be dismissed. In that connection the companies also typically make agreements with the personnel to avoid any subsequent disputes.” What methods do you use to avoid major pitfalls such as unfair dismissal? “Large scale redundancies always require careful advance legal and HR planning in Finland. Failing that, the redundancies are certain to result in disputes. “Some employers also offer the employees to be dismissed severance agreements. In those agreements the employee confirms that he has received all his employment related receivables from the company and undertakes not to contest the expiry of his employment contract. However, the contracts must be made carefully to avoid disputes on the validity of the employee's waiver of claims. “ In what ways do you anticipate policy regarding collectively redundancies changing over the next two years? “The employers must pay more attention carrying out the cooperation consultations in on time, that is, before making any business decisions directly resulting in the redundancies. And although the law does not require that, the companies must establish more detailed criteria for the selection of the employees to be dismissed to avoid the nowadays popular discrimination allegations.”

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Handling Collective Redundancies

Abdulla Luqman

Founder and Managing Partner

302 Eastern Tower, Sana’a Trade Centre, Sana’a, Republic of Yemen. Abdulla Luqman is the Founder and Managing Partner of Luqman Legal, Advocates & Legal Consultants (the “Firm”). It is the first to be established in Yemen in Association with a foreign firm, the UAE based firm of Al Suwaidi & Company with a total of four offices. Members of the Firm are multi-lingual and are familiar with US, European and Middle Eastern legal systems. “This enables them to best serve clients with both their local legal matters and cross border issues, with an international and broad perspective. This distinguishes the Firm from other local firms and has rewarded it top rankings by Chambers and Partners, Legal 500 and Corporate Intl Magazine. “Furthermore, Luqman Legal is the sole representative of the Employment Law Alliance in Yemen (www.employmentlawalliance.com). It represents a number of multinationals in all their employment issues; day-to-day issues; terminations; unfair dismissal claims; transfers under M&A’s; etc. The clients include, Baker Hughes, BP, Occidental, Reliance, Shell and many others. “Employees in Yemen are protected from termination by Statute. The relationship between employers and employees is governed by the provisions of the Yemeni Labour Law No. 5 of 1995 (the “Law”) and the employment contract. The Law can be described as primitive compared to other jurisdictions and is generally in favour of the employee. Furthermore, it does not touch at all on redundancies.

Tel: +9671 448440

Email: abdulla@luqmanlegal.com Web: www.luqmanlegal.com

“Employers are only entitled to unilaterally terminate a contract of employment without written notice or pay in lieu of notice in certain circumstances, for instance in case of fraud; the employee being under the effect of drugs or alcohol during work; assaulting a fellow employee; or causing a material loss to the employer (more examples are provided by article 35.1 of the Law). “Employers are also entitled to terminate employment unilaterally, by prior written notice to the employee and the competent Labour Department, if (i) there is a necessity for reducing work force due to technical or economic reasons; (ii) the employee is absent without legitimate reason for over 30 intermittent days or 15 consecutive days within a given year; (iii) the employee reaches retirement age; or (iv) the employee is declared unfit to work by the competent medical committee. Terminating employment for any of the above reasons would not constitute unfair dismissal. Therefore, it is needless to emphasise the importance of issuing sufficient written notice to both employees and competent authorities. “On the other hand, employees are entitled to compensation in the case where their employer arbitrarily terminate their employment (unfair dismissal). Such compensation shall be determined by an Arbitration Committee and does not exceed 6 months’ pay.”

Eduardo Gómez Enterria c/ Tutor, 27, 28008 Madrid, Spain

Sagardoy Abogados is Spain’s leading firm in employment, Social Security, employee benefits and pensions law. Born 1980, founded by the Professor of Employment Law Juan Antonio Sagardoy, the firm has been engaged continuously in advising businesses on employment matters, and its lawyers work exclusively in this area. It is regarded as the leading firm in its field, recommended by the prestigious directories: Legal 500, Chambers and Partners, Who is Who Legal, and Employees’ Benefits Handbook. These legal services are provided by means of the preparation of reports and opinions on the matters which our clients raise with us, or by appearing in court. Also, where required by a client due to the nature of the matter, we are very actively involved at the negotiating table to achieve collective agreements or workforce restructuring. Lastly, the firm has a daily information service so that clients are aware promptly of successive changes in legislation and case-law in the field of employment.

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Tel: +34 914 540 056 Email: ege@sagardoy.com Web: www.sagardoy.com Web: www.iuslaboris.com

“Eduardo Gómez de Enterría Bazán Partner at Restructuring Department Director Degree in laws Complutense University of Madrid.Master in employment law & social Security of Financial Studies Centre. Negotiation Workshop and Advanced Negotiation, en Harvard University Cambridge) Advanced negotiation workshop of Institute De Empresa (I.E) International Bar Association Member (IBA) International Labor Association Member (ILA) American Bar Association collaborator.”


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The Romanian

The Romanian Fund Industry

Dragos Neacsu dragos.neacsu@erste-am.ro www.erste-am.ro T: +40 372 269 989 14, Uruguay Street, 011445, Bucharest 1, Romania

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omania’s role in the international fund business is increasing and a lot of work has gone into promoting the country as a location for funds. Acquisition International speaks to Dragos Neacsu, CEO of SAI ERSTE Asset Management, market leader in Romania’s emerging mutual fund industry and member of the Austrian ERSTE Asset Management Group, one of the leading investment management companies in the CEE region about the Romanian Fund Industry. SAI Erste Asset Management is the asset manager of the open-ended funds BCR Monetar (money market), BCR Obligatiuni (bond), BCR Dinamic (balanced) and BCR Expert (equity), as well as the one and only Romanian fund of funds, BCR Europa Avansat. According to the latest AAF official statistics published at the end of June 2011, Erste Asset Management had a 38.% market share and total AuM of EUR 630m. Erste Asset Management GmBH operates in 7 countries and is the market leader in CEE, with EUR 44 billion AuM at the end of June 2011. Dragos please summarise the primary laws and regulations that govern the fund industry in Romania? “The main normative act that governs the fund industry in Romania is currently The Capital Market Law no 297/2004 (Law), which provides the main principles applicable to all entities that carry on their activity on the capital market (e.g. Financial Investment Services Companies, issuers etc). Romania is currently in the process of implementing UCITS IV Directive that will be transposed through a law (or a government ordinance to be approved later by a law), further to which the Romanian fund industry shall have its own regulating normative act.

Fund Industry Dragos elaborated: “With respect to the secondary legislation, there is Regulation no 15/2004 regarding undertakings in collective securities and asset management companies (UCITS). The industry’s professional body, AAF, has negotiated with the regulatory authority to update its content, as soon as UCITS IV law is adopted.” Romanian funds are under the direct supervision of the Romanian National Securities Commission (Romanian acronym CNVM), the regulatory authority for the entire Romanian capital market. In this respect, it issues regulations, instructions and disposal of measures related to all activities performed. What makes your Romania a popular location for fund creation and management? “First of all, market potential, with a population of 20m people and very little fund investment per capita, yet (around 100euro as of now), in a country where you have a strong concentration of potential customers in some 10-12 urban areas, and where GDP is forecasted to grow on average in the next five years close to its natural potential of 4 to 5%. In addition to that, the level of capital gains tax is not that bad, at 16%. “On a positive note still, there is a growing private pension sector, that started collecting contributions from individuals and companies in 2008, with two privately managed pillars, counting for almost 5 million participants and AuM just over 1% of Romania’s GDP, into nine mandatory pension funds and eleven voluntary pension funds, along with the traditional state-run PAYG system.”

terms of both number and penetration rate of the customer segments (mass market, affluent, private banking), the most popular type of fund in the last three years has been the money market one. Just eight funds gather more than half of industry’s assets and more than one third of the UCITS investors, as of the end of June 2011 (see attached the monthly AAF official market statistics). “But during last four quarters, one could see that bond funds are moving well ahead of all other fund types and may soon become the main investment theme in Romania. As of end June 2011, six bond funds represented about one fifth (19%) of UCITS AuM, and almost 13% of all investors. One year ago, the MM funds were 60% of the market and bond funds made for 15% market share. What are your predictions regarding fund creation and regulation in Romania for the rest of the year? Are there any hot opportunities for the region’s finance sector? “I think we are not going to see a lot of action with regard to fund creation until year end, as we are all kept busy with the lobbying for the introduction of the UCITS IV Directive in the local legislation, along with the update of the current secondary norms. We target to see them both in place in 4Q 2011. “Next year, once the macro conditions become friendlier, with disinflation process steady down the line, we could see important developments in the traditional long term funds types: bonds, balanced, equity, but also in new areas for Romania, such as REITS and ETFs.”

Which type of fund is most popular in Romania? “From an investors’ point of view, in

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The New Era of Banking Regulation The New Era of Banking Regulation

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he financial crisis has made everyone aware that banks may be unable to meet their obligations in critical situations and it’s no secret that the international banking sector is emerging from the worst crisis and period of embarrassment in recent history. Governments around the world bowed down to pressure from major financial centres and regulation simply fell down in the list of priorities. Faults in bank regulation were not the direct or only cause of the economic downturn but the crisis certainly pointed out the faults in the previous regulatory system and has encouraged policy makers to restructure the national and international systems. Acquisition International speaks to the experts…

Siv Potayya, member of IBA and IPBA is the Managing Partner of Wortels Lexus. This Law Firm is duly registered under the Law Practitioners Act in Mauritius. Kentuadei Adefe, Legal Practitioners Mediators & Arbitrators is a full service commercial and litigation law firm. The firm is rooted in its tradition of excellence, professionalism and expertise in the delivery of its services. Kentuadei Adefe is Managing Partner at Kentuadei Adefe, Legal Practitioners, Mediators & Arbitrators. SAI Zepter Company was founded in 2007 in Bucharest just before the start of the global financial crisis. Marko Simi is chairman of the board and general manager of Zepter Asset Management Company from Romania. Please describe your personal experiences of the financial crisis and highlight how your client’s demands have changed since the onset of the downturn. Siv Potayya: “Mauritius is highly dependable on the European Market which constitutes 95% of the sugar revenue, 65% from ICTBPO sector and 60% from the European tourism. The risk that Mauritius’s economic growth could slow in the last quarter of 2011 is not remote. “The fear to venture into business had become more obvious with a downfall in international transactions. The strategies of the clients are being reviewed not without saying that it will be taking some time to be implemented.” Kentuadei Adefe: “The Global Financial crisis has absolutely affected the business environment in every country of the world and Nigeria is certainly inclusive. Nigeria’s economy is largely dependent on activities in Europe and America and so when those markets turn ugly, Nigeria in turn gets the mirror effect.

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Marko Simi´ c: “We founded our company before the start of the financial crisis, therefore we have invested our funds in less risky securities and managed to prevent a slump in the value of assets for our investors. With the current financial crisis still making its presence felt and increased uncertainty on global markets direct investors in mutual funds are harder to find than ever. This task is somewhat relieved by offering the insurance link product and pension funds but these alternatives require much more capital. “ Please summarise the primary statutes and regulations that govern the banking industry in your jurisdiction and how they have changed since the onset of the financial crisis? Siv Potayya: “The Bank of Mauritius Act 2004 and the Banking Act 2004 regulating the banking sector were enacted in October 2004. The Bank of Mauritius Act 2004 governs the Central Bank principally whereas the Banking Act 2004 governs the banking business in general. There have been no significant changes in our legislations to cater for the financial crisis save the intervention of the Central Bank which is currently targeting less the Eurozone and the Dollarzone.” Marko Simi´ c : “Romania’s comptroller (CNVM) is trying to change the current legislature that regulates the distribution of mutual funds in such a way that all financial institutions (especially insurance brokers) that want to offer mutual funds can do so without unnecessary obstacles or burdens. Presently mutual funds can be offered only by commercial banks, Asset Management Companies and stock brokers. “ What are the primary challenges in this post financial crisis era? Siv Potayya: “The Sugar sector is highly affected and Mauritius should look for other markets without losing sight of the existing competitors such as Cuba and Brazil. Concerning tourism, the authorities are already promoting the country as a tourist destination in countries such as India and China. The balance of prosperity has shifted from Europe to Asia and Mauritius is endeavoring to maximize on the new markets and does entertain close ties with those countries. Kentuadei Adefe: “Nigerian Banks are bedeviled with nonperforming loans and assets and other difficulties due largely to the global financial crisis. In the wake of the financial crisis the Federal Government of Nigeria established The Asset Management Corporation Of Nigeria which has powers to acquire failed banks and manage as well as dispose their assets. AMCON recently acquired or nationalized three Nigerian Banks after failing to


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The New Era of Banking Regulation recapitalize after a four billion dollar bailout in 2009. AMCON is clearly another watchdog over banking activities in Nigeria that the sector has to contend with.” How do the regulatory authorities enforce banking laws and regulations? Has the enforcement tightened compared to pre 2008 levels? Kentuadei Adefe: “The Regulatory authorities enforce Banking Laws and regulations basically within the limits of the laws governing them. Regulatory Authorities like the Central Bank of Nigeria have often been challenged in the Courts on grounds that they have gone beyond their powers. However, following the Financial crisis regulatory authorities have been more creative in interpreting their governing laws and have received a lot of mixed feelings in their recent actions.” How do you keep up with the rapid regulatory advances to ensure that your clients are getting the best possible service? Kentuadei Adefe: “It is the duty of Legal Practitioner to keep abreast with the rapid and dynamic changes in the laws of his environment and strive to examine and understand the implications of these laws as it affects his clients business. That is the lot of a legal practitioner and we thoroughly accept it as our duty to our Clients. “

Kentuadei Adefe info@kadefelaw.com www.kadefelaw.com T: +234 (0) 803 509 1757 +234 (0) 807 213 9359 Baniak House (Top Floor)Opolo, Yenagoa, Bayelsa State, Nigeria

Can you please describe the extent in which the government has taken ownership interest in the banking sector in your jurisdiction and define legal and regulatory implications for entities that control banks. Siv Potayya: “The Central Bank, under the aegis of the Ministry of Finance, serves as a regulatory body under the provisions of the Banking Act 2004.Any bank is established and secures its banking license under the same enactment and enjoys all the privileges obtained there under. The Act provides also for the revocation of the license. Save the State Bank of Mauritius (SBM), which is owned by the public sector, all other Banks in Mauritius are privately owned. The SBM operates as any other bank and is subject to the same control as the other ones by the Central Bank.” Marko Simi´ c: “Romanian government has not taken any ownership interest in the private banks but it owns 2 banks that have not yet been privatized (CEC Bank and Eximbank). In order to increase liquidity in the market during the crisis, the National Bank (NBR) reduced the bank reserves (RMO) to 15% for RON deposits and 20% for foreign currencies deposits.” Can you please explain the regulatory process if a bank becomes insolvent? Marko Simi´ c : “The Romanian market has a lot of potential for growth. Romania is a developing country with a strong

European tradition that is reflected in market presence of all major European and global multinational corporations. The real question remains whether investors who want to invest in Romania, have a good and trustworthy business partner in this country. We at Zepter Asset Management Company do our best to justify the trust that our investors and business partners place in us and therefore we wish to expand our cooperation with other Asset Management Companies in Europe and worldwide.” Have you seen any evidence of sustainable investments in your jurisdiction? Siv Potayya: “Over the years many banks have been set up in Mauritius and they are doing perfectly well and the latest conventional one, ABC Banking Corporation started its operation on 9 December 2010.On the other hand Islamic Banking is smoothly paving its way in the country.” Kentuadei Adefe: “There is indeed over whelming evidence of sustainable investment in the financial sector in Nigeria today. A number of Nigerian banks have done quite well and have been rated fairly well by the biggest rating bodies in the world. Citibank Group research department recently conducted a study and picked three Nigeria Banks as doing very well with strong solvency, liquidity and distribution capabilities and even recommended the shares of these banks to investors for purchase.”

Siv Potayya info@wortelslexus.com www.wortelslexus.com T: 00 230 213 2631

Marko Simi´ c marko.simic@zepter-invest.ro www.zepter-invest.ro T: +40 21 539 66 10

Suite 401, Level 3, Chancery House, Lislet Geoffroy Street, Port Louis, Mauritius.

Piata Alba Iulia, Nr. 2, Bl. i1, Bucharest, Romania.

Twenty One


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The New Era of Banking Regulation “RBI is considered to be a fair regulator and has been often praised for its vision and foresight. It enforces its laws and regulations mainly by way of annual inspection of the Banks and at times through special inspections. It also keeps its ears close to the ground and is quick to investigate matters which are brought to its notice as regards non-compliances, etc. H Jayesh Veena Sivaramakrishnan h_jayesh@jclex.com v.sivaram@jclex.com www.jclex.com T: +91 22 4057 5555

“Post the global financial crisis, the enforcement has tightened, as the RBI has now clearly stipulated additional compliance requirements for banks and ensured that they take on record these documents to adequately safeguard themselves against frivolous litigation. Failure to comply with the requisite norms has also led to RBI imposing penalties on certain banks.”

1104 A, Raheja Chambers, Free Press Journal Marg, Nariman Point, Mumbai - 400 021, India

How do you keep up with the rapid regulatory advances to ensure that your clients are getting the best possible service? “To be able to track the regulatory changes and to provide commercially viable solutions is a challenge for all lawyers. The best way to keep up with the regulatory changes is to understand that our function as lawyers is to act as “facilitators” of business. If the job description of a lawyer was to only give permissibility analysis, the Firm would not have achieved its current standing.

A

cquisition International speaks to H. Jayesh, Founder Partner and Veena Sivaramakrishnan, Partner of Juris Corp, Advocates and Solicitors, a firm that specialises in Banking & Finance, Joint Ventures, Foreign Investments into India, Private Equity, Bankruptcy and Restructuring, Cross-border M&A, Insurance, Dispute Resolution and International Arbitration. The Firm is a known name in the Banking and Financial Services industry. The fact that Juris Corp was started as a boutique firm specializing in this area gives us an edge over the other firms in this arena. In the banking sphere, the Firm can proudly state that almost all major foreign banks are its clients for one or more areas of practice. Certain Indian banks (private sector as well as government banks) exclusively use Juris Corp for certain areas of practice (for e.g. preferred lenders’ counsel for bilateral and syndicate lending, derivatives, etc.). India as such and Juris Corp in specific has seen client demands change in 2 respects because the economic downfall. (a) more clients are demanding alternative fee arrangements as opposed to hourly billing only and (b) buying of bulk hours is increasingly becoming the demand of certain institutions, which was otherwise a rare phenomenon in India. “One other related area where client demands have changed is the request for legal professionals being asked for secondment for their Indian operations. Unofficially we have been informed that some of these requests are on account of headcount freeze.” What are the primary challenges in this post financial crisis era? “Sustaining growth without impairing asset quality and spreads has been the key challenge. Unsecured retail lending has dropped significantly. Also, banks competing to lend at lower than their benchmark rates has stopped. Some banks have actually shrunk their balance sheet including shutting down some business lines.” How do the regulatory authorities enforce banking laws and regulations? Has the enforcement tightened compared to pre 2008 levels?

Twenty Two

“Each lawyer in the Firm is trained to think commercially, act legally and perform reasonably. This ensures that the clients are getting the value addition they deserve. Can you please explain the regulatory process if a bank becomes insolvent? “Banking Companies can be wound up in accordance with the provisions of the Companies Act, 1956 and the Banking Act. From a practical perspective, Banking Companies are more likely to be subject to a moratorium than a winding up. “None of the government banks can be placed in liquidation, save by an order of the Government of India and shall be liquidated only in such manner as the Government of India may direct. “In the last 50 years, no bank of significant size and in any case no government bank has been wound up in India. The only meaningful instance was the BCCI case where the RBI did not participate on the global liquidation. After imposing a moratorium on BCCI’s Indian operations, RBI ensured that it was taken over by another bank.” Have you seen any evidence of sustainable investments in your jurisdiction? “As the Indian economy has not stopped growing at all, sustainable investments continue. Even at the peak of the crisis, India was growing at 7%, though there have been sectoral shifts.” In what ways do you anticipate the legal and regulatory policy changing over the next two years? “In the next 2 years, we see RBI getting serious about the subsidiary model for functioning of foreign banks in India. We also see regulatory changes from a practical perspective based on learnings from developed countries, which have probably faced the financial crisis brunt more than India.”


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Doing Business in Mauritius

Doing Business in Mauritius

O

ffshore financial centres have come under a huge amount of pressure from international governments to have a more fair and open approach to business; hence the last few years have witnessed a lot of change and the introduction of regulation. That said there are still some very appealing reasons to form offshore and a wealth of great opportunities for both companies and individuals. Acquisition International’s offshore series aims to identify the key trends in the major hubs and pinpoint the most active and attractive locations.

Mauritius has a great many “pull” factors, it offers a competitive business environment with vast growth potential and ample investment opportunities, a fast growing financial sector, political and economic stability, a highly educated and diligent workforce and state-ofthe-art infrastructure. The government of Mauritius has taken practical steps by offering a wide range of incentives to potential investors, which have clearly paid dividends. This has resulted in the attraction of considerable foreign investment to the region and Mauritius now has one of Africa’s highest per capita incomes. Acquisition International speaks to the experts… Abax Corporate Services (previously known as Abacus Management Solutions) was formed as a result of the merger of three former companies, one of which was originally the company secretarial practice of a Big Four Mauritius firm and the two others set up in the early 1990’s following the creation of the Mauritius offshore sector. Nousrath Bhugeloo is partner at the firm. Headquartered in Mauritius with three representative offices and a corporate finance house in South Africa, AfrAsia Bank is a boutique financial services provider with the ability to tailor innovative banking solutions for both the Mauritian and international markets. James Benoit is the Chief Executive Officer and Executive Director at AfrAsia Bank.

Wortels Lexus is global business-oriented providing assistance on diverse cross-border transactions originating from various parts of the world involving Mauritius. It provides a high quality service and responds quickly to its clients needs. Siv Potayya is partner at the firm. Uteem Chambers, a Law Firm registered under the Mauritius Law Practitioners Act 1974, is a leading Barristers’ Chambers in Mauritius which specialises in Banking and Finance, Securities law, International investments in real estate, on private equity or collective investment scheme, including hedge funds, Corporate law, Aircraft leasing, International tax and trusts laws as well as all aspects of offshore business activities. The chambers is headed by Muhammad Uteem who was called to bar at Middle Temple in England after winning the 1st prize at the English Bar exams. Muhammad Uteem was an associate of US firm Winthrop Stimson Putnam & Robert (now Pilsburry Winthrop Shaw Pittman LLP) and worked principally in its Hong Kong and Singapore offices. The Chambers have members who are qualified in Mauritius, France, Malaysia and Singapore. The Chambers regularly advises overseas governmental agencies and has been involved in legislative drafting. Dagon Ingénieur Conseil Ltée. is a wholly owned Mauritian company incorporated to provide Consultancy services in the field of Civil & Environmental Engineering. It was established by Mr. Chandansingh Chutoori who is a Registered Professional Engineer and who has gained over 20 years of experience in the domain of civil engineering. The company has resource persons who provide their specific expertise in the wide spectrum of civil, structural and environmental engineering. The firm has a fully equipped office and personnel committed to deliver to the Client’s expectations. Sootam Chutoori is partner at the firm.

Do local laws in your jurisdiction differ with those of other offshore financial centres? Siv Potayya : “We are not versed in the applicable laws for other offshore financial centers but Mauritius perfectly knows how to tilt the balance between ease of business and money laundering within the scope of the banking secrecy laws.” What factors are attracting companies and wealthy individuals to Mauritius? What are the key benefits of locating there? Nousrath Bhugeloo : “Mauritius is increasingly being recognised as a safe and sound business and financial hub, ideally situated between the emerging markets of Asia and Africa. The economy has proved resilient with strong macro-economic fundamentals, legislation and business practices have been reviewed with the result that Mauritius is now ranked 1st in subSaharan Africa for ease of doing business. Investment potential exists in several areas onshore while the country is also strongly positioned as an ideal place to do business with Africa. The Business Facilitation Act of 2006 has opened up the country further to foreigners with granting of residence under certain conditions. Access to free hold property by non-nationals is also allowed under specific schemes. Income and corporate tax is low (15% - but a maximum of 3% for Global Business Companies), the country has a well educated and experienced labour pool and the business infrastructure is modern and well developed. On the fiscal side, there is no capital gains tax, no withholding tax on dividends, profits and interests and the country has signed DTAs and IPPAs with a host of countries, making it a safe place to conduct business from. Intellectual property and data protection legislation is also in force. The financial industry is sophisticated and offers an array of services to MNCs and HNWI. The Mauritius Stock Exchange enjoys worldwide recognition.”

Twenty Three


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Doing Business in Mauritius Do local laws in your jurisdiction differ with those of other offshore financial centres? Nousrath Bhugeloo : “The regulations for Mauritius resident companies require that all decisions pertaining to the business of investee companies be taken in Mauritius, for instance Board meetings have to be chaired from Mauritius. Increasingly the traditional divide between onshore and offshore business is fading and companies are being treated on the same footing. GBCs however end up paying Income Tax of 3 % maximum if they are tax resident. While Mauritius is a OECD white-listed jurisdiction that also provides for exchange of information wherever prescribed by agreement between tax authorities, what is really making it an international financial centre of repute mainly lies in the quality and array of professional services international companies can find here.” What are the primary challenges facing clients in your jurisdiction today? How have you adapted your services to meet these needs. Siv Potayya : “India has since long requested the Mauritian counterpart to renegotiate the DTA signed between both countries in 1982. This combination allows investors to invest in India through Mauritius without paying tax twice. Mauritius is the biggest investor in India ( 42% of all foreign direct investment since 1991) but India is no longer the only market Muhammad Uteem : “Mauritius still has a strong focus towards China, India and the African continent. However the finance industry in Mauritius is evolving into a truly global business amidst fierce competition and the Indo-Mauritian DTA being under constant attack. Mauritius is being used as a base to meet with clients in both African and Asian markets. We are implementing a marketing and business development program to gear-up our services accordingly. We also plan to meet service providers and intermediaries to increase our visibility in these places.”

Mrs Nousrath Bhugeloo nousrath.bhugeloo@abaxservices.com www.abaxservices.com T: +230 403 6000 6th Floor, Tower A, 1 CyberCity, Ebene, Mauritius.

Twenty Four

What code of ethics do you adhere to and who regulates them? Has the region been under pressure to adhere to international regulation? James Benoit : “It is worth noting that Mauritius has never been on any blacklist of non compliant jurisdictions and this has enabled Mauritius to grow its IFC without any fear of sanctions. “The country’s adoption of international best business practices and sustainable development policies has been acknowledged by international agencies such as the OCED, the FAFT and the World Bank. “Mauritiusfullysupportsinternationalinitiatives (FATF,Basel,IOSCO,IAISandIFSB)incombating money laundering and terrorist financing. Mauritius was amongst the first IFCs to find itself on the White List of the OECD and this has enhanced its position as a reputable jurisdiction. “Following the release of the OECD report on Transparency and Exchange of Information for Tax purposes, Mauritius amended its domestic laws in order to make mandatory the filing of audited financials and details of beneficial ownership of GBC2 companies with the Financial Services Commission.” What gives you an advantage over local and global competitors in your areas of expertise? James Benoit : “With three representative offices and a Corporate Finance House in South Africa as well as strong international shareholders, the Bank is delivering on its promise to be a truly one-stop boutique regional bank that links these two continents together seamlessly with a “bank different” customer service approach.” What steps over recent years has Mauritius taken to actively diversify its economy to ensure continuing prosperity and growth in spite of the global downturn?

T: +(230) 212 1757 dagonig@intnet.mu 2nd Floor, Diva Building, 26 Brabant Street, Port Louis

Siv Potayya : “The Sugar sector is highly affected and Mauritius is looking for other markets without losing sight of the existing competitors such as Cuba and Brazil. Concerning tourism, the authorities are already promoting the country as a tourist destination in countries such as India and China. The balance of prosperity has shifted from Europe to Asia and Mauritius is endeavoring to maximize on the new markets and does entertain close ties with those countries.” Muhammad Uteem : “Mauritius has strived to diversify its financial center by continuously updating and introducing modern legislations and new products. Introduction of legislations to allow Islamic Banking, a more modern and adapted insolvency law and to facility derivative trading to name a few. “The Stock Exchange of Mauritius has recently amended the listing regulations with a view to attracting the listing of special debt product and GBL1 company. A listing on the SEM of a corporation holding a “Category 1 Global Business Licence constitutes an important way of demonstrating substance and added-value while reinforcing the corporation’s connection and tie with the Mauritian jurisdiction. “Also, to promote Mauritius as an investment destination, various sectors have been opened up to attract foreign investors, such as business process outsourcing, hospitality and real property development, healthcare and life science, knowledge, renewable energy and environment.” Can you please define the nation’s taxation strategy? Nousrath Bhugeloo : “Mauritius has adopted a low harmonised tax rate of 15% that has sustained investment and consumption, the main drivers of economic growth. Public debt has been restrained due mainly to increased fiscal revenue boosted by a larger tax basket and getting more of the informal sector into the

James Benoit james.benoit@afrasiabank.com www.afrasiabank.com T: (230) 208 5500 Bowen Square, 10 Dr Ferriere Street, Port Louis, Mauritius.


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Doing Business in Mauritius economic mainstream. The strategy has been to promote a tax regime that is conducive to business creation and is not discouraging to private individuals. VAT has remained stable at 15% with a number of consumer essentials being exempt. Sootam Chutoori: “Mauritius has a modern tax law. Since 2007 Mauritius adopted a homogenised tax system that makes it attractive and less complicated by introducing a flat rate. “The taxation system that prevails in this country is unique. It touches the private tax and corporate tax in a fashionable manner and that resembles each other. The tax regime is governed by established regulations and the quantum of tax applicable is dependent on the policies made by the Government in order to meet its overall goals and objectives. Specific taxation of products and goods started with the appearance of Sales tax in the early Eighties. This was gradually superimposed by the Value Added Tax (VAT). The base of the VAT has been increased to cover goods and services. The VAT is a flat application of 15% on all goods and services rendered in the country. In that manner tax evasion is minimised, especially from professionals working in the specialised sectors. “The tax is recovered by a single structure known as the Mauritius Revenue Authority. The personal tax and corporate tax is not a fixed item as it varies yearly. The quantum of taxation is known during the reading of the budget speech and the approval of the Appropriation bill. “For the current year the personal tax is claimed at 15% on excess over expenditure. The current threshold limits for personal taxation purposes have been divided into four categories; namely single, with one dependent, two dependent and three dependents. The tax relief takes on board many components such as investment in public stock and shares, medical schemes, pension schemes” Arvin Rogbeer : “Simplified and harmonized tax system to attract investors. The rate of both personal taxation and corporate taxation is at 15%. Offshore companies, namely the GBC 1 is taxed at a maximum of 3% on profits and GBC 2 companies are not taxed at all in Mauritius.” How has Mauritius gained a reputation as a haven for asset protection? Siv Potayya : “Mauritius, strategically located between the emerging Asian and promising African countries has emerged as a leading International Financial Centre for Asian and African investments. Financial Services and Intermediation remains one of the major pillars of the economy and contributed to 13.5% to GDP in 2010. “Over the years Mauritius has developed its reputation as a well regulated, secure and credible International Financial Centre. The Bank

Siv Potayya info@wortelslexus.com www.wortelslexus.com T: 00 230 213 2631 Suite 401, Level 3, Chancery House, Lislet Geoffroy Street, Port Louis, Mauritius .

of Mauritius is the regulator for banking transactions while the Financial Services Commission is the regulator for non-banking transactions. These two regulators have been extremely prudent in adopting best practices in order to prevent misuse of our jurisdiction and introduce the necessary safeguards. Cautionary approaches adopted by these regulators have been essential in maintaining reputation of Mauritius in that domain.” Arvin Rogbeer: “The Trust Act 2001 has very favourable provisions for assets protection eg. migration clause, ‘spendthrift provisions’, suspension of payment during ‘danger period’, limitation period of only 2 years to bring an action against the Trustees, limited foreign courts influence on Mauritian courts, etc.” What are your predictions for the future of Mauritius as a leading offshore destination? Muhammad Uteem : “We would expect further deepening and broadening of the financial services sector in terms of market diversification, product development and value addition for Mauritius to flourish and to remain as a leading offshore jurisdiction. “With the opening of African continent Mauritius is ideally positioned to be the gateway between the Africa continent and the outside world for flow of capital, goods and processing services. It also provides preferential market access to a 425 million consumers in the African region. Though there has been increasing use of Mauritius offshore entities by corporates as a springboard into Africa, it is still very early days. In order to give greater impetus to the use of Mauritius offshore services the local financial services operators would be called upon to be present actively at international forum, trade fair, initiate trade link and be more sensitive to the requirements and issues facing the corporate and financial communities.” Arvin Rogbeer : “The future is bright. Mauritius will soon pass the Foundation laws and Civil Partnership as new corporate entities to add to the existing investment range of investment vehicles. The Mauritius Asset Protection Trust offers huge opportunities for high net worth individuals. The DTA with India, China and South Africa offers huge foreign investment opportunities in these countries by channelling the investments via the Mauritius GBC 1 offshore company or Trust.” What opportunities are currently available to the finance sector? Nousrath Bhugeloo : “We are very confident in the future of Mauritius as an offshore destination, though as we said we see this divide between onshore and offshore fading rapidly as Mauritius positions itself as a fully fledged business and financial hub attuned to the needs of businesses in general, and especially international businesses benefitting from the AsiaAfrica investment dynamics. The big opportunity, most probably the

muteem@intnet.mu www.uteemchambers.com T: (230) 2117700 4th Floor, Les Jamalacs Building, Vieux Conseil Street, Port Louis, Mauritius

Arvin ROGBEER ACA, FCCA moorestephens@intnet.mu www.moorestephens.mu T: (230) 211-6535/ 211-7484 6th Floor, Newton Tower, Sir William Newton Street, Port Louis, Mauritius.

Twenty Five


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Doing Business in Mauritius biggest ever to face Mauritius, is the growing attraction Africa is exercising in the global business landscape. The potential for Mauritius is huge to become a main Head Quarter base for companies doing business in and with Africa, as Singapore and Hong Kong are for China.” Sootam Chutoori: “The Offshore business in Mauritius has a long history. It was implemented at the time where most African countries were susceptible on its functioning. Mauritius embarked without hesitation in the new adventure that today aggregates some 30,000 offshore businesses. There are several portfolios of investment opportunities. The Board of Investment published an investment brochure for the marketing campaigns carried out overseas. The synopsis of investment opportunities is summarized in the table opposite:-

Case Study India Capital Management Limited started the India Capital Fund Limited in Mauritius in September 1994 as a long-only hedge fund focused exclusively on Indian equities. “Mauritius offers several compelling advantages for financial companies like us domiciled here: it is a regulated centre under the auspices of the Financial Services Commission (“FSC”) and has enacted globally compliant standards with regard to money laundering and terrorism financing; high quality infrastructure and office facilities make for smooth business operations; and our staff are selected from the well-educated English speaking local population. “Very conveniently, the country is located in a strategic time zone (GMT + 4) which means that the working day overlaps with Asian, European and US market hours. We can thus service all our global clients in those locations throughout the Mauritian working day. “As our company only invests in Indian equities and due to the historical and ethnic Mauritian linkages to India, it is the most logical place to base our company. Mauritius therefore offers a uniquely complete and appropriate location. There is simply nowhere better for an India-centric investor. “From 1994, the year when the fund was established, our Mauritius office has been our centre. Over the last 16 years, staff and technology infrastructure employed in this office have expanded considerably in line with the increasing oversight demands of today’s investment world. It is quite possible for clients to do a “check” in person of our office operations here. Other than the FSC, and in accordance with international supervision norms, our fund also has to meet the regulatory standards for the Registrar of Companies and the Mauritius Revenue Authority. “It is encouraging that an established yet evolving legal and regulatory framework and quality business infrastructure will continue to enhance the country’s competitive advantage as an international financial centre and accordingly our company’s ability to grow.”

Sudesh Lala & Dev Joory sudesh@ifsmauritius.com www.indiacapmgt.com IFS Court, 28 Cybercity, Ebene, Mauritius T: +230 467 3000 or +230 467 4000

Twenty Six

Functional Group Banking

Global Business

Insurance Capital Markets

Other financial services

Function

Retail & Corporate Banking, Private Banking and Wealth management, Investment Banking, Global Business Banking, Islamic Banking.

Investment Holdings, Global Management Funds, Fund Administration, Fund management, Shariah Compliant Fund, Global asset Management. General Insurance, Long Term Insurance, Captives, Reinsurance, Takaful and Re-Takaful.

Equities Market, Commodities Trading Platform, Derivaties, Listing of Global Business Companies, Specialist Debt instruments and Global Funds.

Brokerage Houses, Accountancy Firms, Tax and Investment Advisers, International Law Firms, Leasing companies.

“The five sectors currently in force is presently generating positive dividends. It has attracted many trusts, international law firms and trading agencies such as the one mentioned above i.e. GBOT. The growing demand towards the DTA treaty with other emerging countries, the availability of know-how in the sector and our suitable Zone Time positions Mauritius as an ideal platform for business.” James Benoit: " We are currently seeing more and more foreign investments into Africa especially from the Asian superpowers, China and India. These two countries account for nearly 37% of total FDI landing into Africa between 2003 and 2010. In 2009 alone, the African continent attracted an excess of USD30.7 billion in terms of FDI and this figure is set to grow at exponential rates. Major PE funds and hedge funds have already earmarked Africa in their investment portfolios as the next diversification markets with promising returns. With its network of 13 DTAs and 18 IPPAs signed with African countries only, Mauritius is poised to grow as the ideal springboard for cross-border investments into Africa. Not to forget that Mauritius has secured preferential access to markets worth several hundreds of millions of consumers. With the EU, through the Cotonou agreement; with the US under the Africa Growth and Opportunity Act (AGOA); with Eastern and Southern Africa, through the Common Market for Eastern and Southern Africa (COMESA) and the Southern African Development Community (SADC). Being a member of these regional organisations and a signatory to all the major African conventions makes the Island the best offshore location for establishing any trading company. In terms of PBWM, there is a lot of opportunities for Mauritius to develop new products and specialized financial services that we plan to offer more in the long run e.g. investment management, global custody & brokerage, alternative investment management, family office management amongst others


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cquisition International speaks to Dev Erriah , Partner at Erriah Chambers the highly-quality Chambers specializing in International tax law, International trusts law, International Business laws and all aspect of offshore business activities about “ doing business” in Mauritius. Erriah Chambers is the only Chambers, which specializes in International tax law, International trusts law, International Business laws and all aspect of offshore business activities which gives us an advantage over our competitors. The Chamber’s has a vast experience in multijurisdictional issues in numerous legal systems. Consequently, we are known for unusual effectiveness in helping clients accomplishing their objectives in environments others find daunting and unfamiliar. What factors are attracting companies and wealthy individuals to Mauritius? What are the key benefits of locating here? “Mauritius is an independent state in the southwest of the Indian Ocean, strategically located at the crossroads of Africa and Asia in a time zone which straddles business hours in both Western Europe and East Asia. It is politically stable and has a solid democratic condition. Economically, Mauritius is also very stable by virtue of a diversified economy. Furthermore, Mauritius offers a lot of incentives to foreign investors like low tax, no foreign exchange control, generous capital allowances, tax free dividends, no capital gains tax and many other benefits. “It has a high literacy rate and most inhabitants are at least bilingual. It has efficient road networks and modern business parks. There is one international airport with direct flights most major business cities across Europe, Asia and Africa.” In reference to your area of expertise, how do local laws in your jurisdiction differ with those of other offshore financial centres? “Mauritius is an offshore and onshore jurisdiction with a good repute in the financial services industry. Mauritius has been internationally accepted as a well regulated and reputable offshore financial centre. Mauritius has wherever possible

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Doing Business in Mauritius aligned itself with international compliance as laid out by the main regulatory bodies like the IMF and OECD. “The key features of Mauritius offshore company formation are such as there is no tax, no resident directors or shareholders is required and share capital is unlimited. Singapore which is also an attractive location for international business setup does not have an offshore legislation. “There are a lot of challenges that still needs attention and perfection. We also need to improve quality of service in competition with other jurisdiction.” What are the primary challenges facing clients in your jurisdiction today? How have you adapted your services to meet these needs? “Nowadays, the challenges we faced when dealing with clients in the offshore sector is that clients are very demanding, they want value for money. They also want professionalism and confidentiality. “Erriah Chambers always have in focus to provide a better, faster, higher value legal product to sophisticated purchasers of legal services. We continue to aim at providing personalized services to all clients and to remain available at all times for assistance. Our chambers have a pool of available qualified lawyers. Most of our barristers have been called to the bar in the UK. What steps over recent years has Mauritius taken to actively diversify its economy to ensure continuing prosperity and growth in spite of the global downturn? “The Mauritian Government took the initiative amend the legislations and make them in line with the expectations and competitively reigning across the markets. Offshore companies have been replaced by Category 1 Global Business Companies. The concept of ‘offshore trusts’ has also been abolished as a result of the repeal of the Offshore Trusts Act 1992 now replaced by the Trust Act 2001, which has fused the law relating to domestic trusts and offshore trusts. “The Banking Act 2004, allows offshore banks in Mauritius to conduct all types of banking business activities with nonresidents of Mauritius.The Financial Services Act2007 now provides for the legal

framework governing the financial service sector.” What are your predictions for the future of Mauritius as a leading offshore destination? What opportunities are currently available to the finance sector? “We expect to see a higher level of investments and a few joint ventures. The stabilization of Securities Act in Mauritius along with many more regulations is very much assisting the monitoring of the framework. The securities (Collective Investment Scheme) Regulation 2008 regulates all collective investment schemes and close-ended funds, therefore opening doors to more investors, including expert investors and sophisticated investors, to target investments in emerging economies. The Financial Services Commission provides a strong framework for global businesses which should prove beneficial and productive. “We have recently seen the opening of the first Islamic bank in Mauritius for retail and investment banking and with the everincreasing improvement of the local legal and regulatory framework to cater for Islamic Banking practices. The Bank of Mauritius has implemented most of the recommendations of the Basle committee l and ll for effective supervision of banks operating in Mauritius.”

Dev R Erriah eclaw@intnet.mu T: +230 208 2220 2nd Floor, Les Jamalacs Building, Vieux Conseil Street, Port Louis, Mauritius.

Twenty Seven


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The New Era of Custodian Services

The New Era of Custodian Services A

ll institutional investors now engage global custodian banks (or sub-custodians) to oversee and service their assets in multiple international markets. These firms are vital to our global financial markets as they provide specialist services that make cross-border investing possible. Acquisition International speaks to the custodians.

BNP Paribas Securities Services is one of the highest rated asset serving banks in the industry, with a local presence in 32 countries across five continents and a global custody network covering over 100 markets. BNP Paribas Securities Services’ flexible around-the-clock servicing is accessible from any time zone. Richard Turrell is global product manager at BNP Paribas Securities Services. What gives you an advantage over your direct competitors? Richard Turrell: “Our local clearing, settlement and custody presence provides an unparalleled level of expertise in the complexities of the financial markets and underpins everything we do. We also have a unique track record for excellence in client services. Year after year, we are recognised in industry surveys as a leading provider of local clearing and custody solutions across Europe. Further, client assets are secure as we are the only securities services provider in the world backed by the strength of an AA S&P rating.” Who is your typical client? Has this changed over recent years? Have you experienced demand from the new wave of asset classes? Richard Turrell: “Our typical clients forming the core of our client base include broker-dealers, investment banks, global custodians, private banks, and asset managers. Over recent years, we have seen a growth in the demand for integrated post-trade services of derivatives.”

Twenty Eight

Richard Turrell richard.turrell@bnpparibas.com www.securities.bnpparibas.com T: +44 20 7595 2000 55 Moorgate, London EC2R 6PA

Please describe your personal experiences of the financial crisis and highlight how your client’s demands have changed since the onset of the downturn. Richard Turrell: “BNP Paribas weathered the global financial crisis well as a result of its robust approach to risk management. Our stability helped secure our clients’ assets against the market risks and provided them with the confidence they needed in an agent bank. We have seen continual demand for our services as a result.” What is the primary challenges facing custodian banks in this Post–Madoff era? Richard Turrell: “‘Know you client’ procedures have been thrown into sharp relief. A robust and accountable process is vital in the provision of secure asset services. How do you keep up with the rapid regulatory advances to ensure that your clients are getting the best possible service? Richard Turrell: “We have a team of dedicated regulatory specialists who continually interact with the European Parliament and other political and market bodies to ensure our clients’ views are heard and understood.” What makes you the right Custodian/Sub Custodian? Richard Turrell: “Our financial strength, extensive product diversity, global and local presence and proven history of excellent client service.” What are your predictions for the future of the Custodian industry in your jurisdiction? Richard Turrell: “Regulatory rationalisation and geographical operational harmonisation will drive consolidation of providers and infrastructure to a more efficient level.”


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The New Era of Custodian Services Elena Melanthiou Head Custody Unit

39 Arch.Makarios Iii Avenue, Cy-1065 Nicosia Cyprus

Marfin Laiki Bank is one of the few custodians in Cyprus providing a comprehensive range of traditional and specialized custody services for both the local and the international markets. Our custody services include safekeeping of securities, settlement of transactions, information and execution of corporate actions, execution of payments etc. Since the launching of its offering of custody services in 1996, Marfin Laiki Bank continuously expands the operation of its Custody Unit in terms of products, markets, associates, counterparties, in order to be able to effectively respond to market changes and, in effect, the changing client requirements. What gives you an advantage over your direct competitors? “Our Bank recognizes that, consistency of high levels of service and quality is what can distinguish one from the competition even in difficult times, and as such it puts a great emphasis on these areas. However, we must take into consideration many other factors that separate Marfin Laiki Bank from the competition, such as the experience of its highly qualified personnel, technological innovations and competitive pricing. Despite the strong competition in the market and the adverse market conditions, with our commitment and effort, we have managed to attract new clients and our assets under custody had a significant increase in the last three years.”

Who is typical client? Has this changed over the recent years? Have you experienced demand from the new wave of asset classes? “Our clientele consists of private and institutional clients, including provident funds, insurance companies, International Collective Investment Schemes, asset managers etc. In addition, our services are offered to foreign banks and other institutions who wish to appoint Marfin Laiki Bank as their sub-custodian in the Cyprus market. There are no significant changes on the type of clients but, over the recent years clients became more demanding.”

Please describe your personal experiences of the financial crisis and highlight how your client´s demands have changed since the onset of the downturn. “Due to the change in the market conditions, investors became more “conservative”. It is a fact that institutional investors are pursuing more sophisticated investment strategies than they did a few years ago. In addition, there is a high demand for the provision of custody services to Private International Collective Investment Schemes (ICIS). Our pricing policy for the specific services is very competitive and the number of ICIS Funds cooperating with us for custody services has increased significantly in the last 18 months.”

Tel: +35722812127, +35722812280 Web: www.marfinbank.com Email: emelanthiou@marfinbank.com , custody@marfinbank.com

How do you keep up the rapid regulatory advances to ensure that your clients are getting the best possible service? “Our bank is regulated by the Central Bank of Cyprus and it is fully compliant with the MiFID Directive and relevant legislation. Our dedicated and specialized team of lawyers, compliance officers, external associates are responsible to keep up and inform all relevant parties for all regulatory and market changes. In addition to that, appropriate procedures have been put in place to ensure that the clients are getting the best possible service and that their assets are secure and protected.” What makes you the right Custodian / Sub-Custodian? “As we have already mentioned, we provide a comprehensive range of custody services, for both the local and international markets. This combination allows the clients to expand their investment opportunities worldwide.” “In addition, we give emphasis to safety of assets. All clients assets are segregated from the bank´s own assets, and, through the use of sophisticated asset management systems we maintain full segregation between client holdings. Reconciliation of assets is done by an independent unit on a monthly basis for security and safety purposes.” Finally, the high level services offered by the Custody Unit of Marfin Laiki Bank have been recognised and awarded from several renowned organisations and during the last years we have received several awards, such as: • Best-In-Class in Custody Services for Year 2006 and 2007. • Innovation Award for Year 2008 and 2009. • Best Sub-Custodian Bank for Cyprus Market for Year 2009 and 2011.

What are your predictions for the future of the Custodian industry in your jurisdiction? “It is a fact that the role of the Custodian has become very important in the course of time. The recent financial crisis has led to a number of important developments in the custody industry, giving emphasis to risk minimization and asset safety. The upcoming implementation of the Target2 Securities (T2S), where Cyprus and the Cyprus Stock Exchange participate in the project, the regulatory and market changes in Cyprus and abroad require the immediate response and actions from our side and, accordingly will enhance even more the role of the custodian. Our Bank will continue to invest in the development of its custody services and continue to be one of the leading providers in Cyprus.”

Brian Keogh

General Manager Sales

12/500 Bourke Street, Melbourne 3000

Tel: +61 3 8641 1602 Email: Brian.Keogh@nab.com.au Web: www.assetservicing.nabgroup.com Asset Servicing is a division of National Australia Bank Ltd (NAB), with its head office based in Melbourne. Asset Servicing is responsible for custodian and other related services within Australia and New Zealand. Brian Keogh is General Manager Sales, Relationships & Financial Market Services of the Asset Servicing division. What gives you an advantage over your direct competitors? Brian Keogh: “As a leader in the Australian market place, Asset Servicing services a range of clients including superannuation funds (including industry funds, public sector funds and corporate funds), government instrumentalities, insurers and investment managers. Asset Servicing also provides sub custody services in Australia and New Zealand to foreign domiciled global custodians, brokerage firms and foreign investment houses. Asset Servicing currently provides services to 260 clients.” Who is typical client? Has this changed over recent years? Have you experienced demand from the new wave of asset classes? Brian Keogh: “Our typical client tends to be Superannuation or Master Fund, making up approximately 58% of total client base as at 31/12/2010. The most significant change to occur to Asset Servicing over the last 5 years was associated with the transition in of the MLC Master Fund business in 2007. To support this significant transition (the largest custody transition in Australian history), the NAB group committed tens of millions of dollars and significant manpower. In order for this transition to proceed, Asset Servicing proved, achieved and was independently assessed a ‘Better off Test’ for investor; that is, proved that all investors would be ‘better of’ as a result of an Asset Servicing transition.” Please describe your personal experiences of the financial crisis and highlight how your client’s demands have changed since the onset of the downturn. Brian Keogh: “Subsequent to the events and outcomes surrounding the Global

Financial Crisis (GFC), we have seen some significant shifts in client demand. As shareholder/investor returns have been impacted, and boards have been brought to account for past decisions, our clients have moved their focus from maximising returns to ensuring that robust risk and compliance structures are in place both internally and at their third party service providers. Specific to this, we have seen increased focus on: Risk Management/ Corporate Governance/Segregation and registration of client assets/Securities lending/Focus on fees/expenses “Asset Servicing is focused on identifying ways to assist our clients to increase income/reduce expenses eg. cost effective passive overlay solution.” How do you keep up with the rapid regulatory advances to ensure that your clients are getting the best possible service? Brian Keogh: “A powerful example of Asset Servicing’s commitment to meeting regulatory changes can be seen through the implementation of TOFA related changes. Asset Servicing undertook a significant project to ensure compliance with TOFA legislation, including engaging an external firm as an advisor. TOFA was successfully implemented on 1 July 2010.” What makes you the right Custodian/Sub Custodian? Brian Keogh: “As the only truly ‘local’ investment administration and custody service provider operating in Australia, our experience and expertise servicing both domestic and international clients in the Australian market is unsurpassed. In particular, Asset Servicing is renowned for its capabilities in the areas of Tax and Accounting, Unit Pricing, Mandate Compliance and Registry services.”

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How to Attract Foreign Investment

MNB Legal Practitioners

How to Attract Foreign Investment M

ost international governments are keen to attract foreign direct investment; with the creation of new jobs, improvements to infrastructure and the promotion of growth and employment, there is little to complain about. As our global economies emerge from recession, attracting this investment remains very much a global priority however some countries are considerably more successful in doing so than others.

For firms looking to invest abroad there are a number of key topics that have to be faced before making a decision on location. The local workforce, laws, regulations and practices have a big impact on this, for example, excessive red tape can slow progress when it comes to starting a business, lease land or settle a commercial dispute. Corporation tax is also a major consideration as is the level of corruption and political stability. Acquisition International speaks to the experts… MNB was formed in July 1999 following the merger of three Law firms namely P. Matibini & Partners, Nchito & Nchito Advocates and E.C. Banda & Company. The Law firm, which is a general practice handling corporate, commercial, criminal, litigation has on its list of clients a number of Zambian Banks including the Bank of Zambia. Sashi Nchito is a senior Associate Advocate in the Firm MNB Legal Practitioners. Gregory T. Vlachos is a senior attorney in SARANTITIS, a Greek leading law firm. His areas of practice include foreign investment projects, public private partnerships (PPP), collective investments schemes, restructuring proceedings and privatizations. He is also active in the development of the business relations of the law firm. Ndeye Khoudia Tounkara is partner at Cabinet Maitre Mayacine Tounkara Et Associes, Avocats A La Cour, a firm that was established in 1983 acting on behalf of banks. Please provide a brief history of your firm and outline your experience in foreign investment.

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Sashi Nchito Kateka mnb@mnb.co.zm T: +260 236920/1 5th floor, Godfrey House, Longolongo Road P.O. Box 34207, Lusaka, Zambia

Gregory Vlachos gvlachos@sarantitis.com www.sarantitis.com T: +30 210 3670400 9 Anagnostopoulou Str., Gregory T. GR 106 73 Athens, Greece Vlachos: “SARANTITIS is a highly regarded and prominent law firm in Greece. It was established by Cabinet Maitre Mayacine its current Tounkara Et Associes, Avocats A La Cour senior partner in 1965 and as a Ndeye Khoudia Tounkara ntounkara@orange.sn result of its commitment to constant and 15 Bd Djily Mbaye X rue de Thann, Immeuble Xeeweul 1er étage BP1976 b a l a n c e d Dakar Senegal growth, we operate today with a team of 40 highly qualified lawyers, a supporting staff of 28 persons and offices strategically located in the business centers of Athens, Piraeus and Thessaloniki. For decades SARANTITIS has built a significant and long-standing experience in foreign investment schemes, mergers and acquisitions (M&A), joint ventures, strategic alliance agreements, reorganization proceedings and has represented some of the best-known corporate groups, banks and enterprises within Greece and abroad.” What gives you an advantage over local and global competitors in your areas of expertise? Sashi Nchito : “MNB, being a general practice firm stands at a better position than most other firms which may have a bias towards the practice of one type of law. Some firms for instance have a bias towards corporate law and in the event where litigation becomes necessary in a corporate matter, they may seek to outsource. At MNB, we handle all matters internally.” Gregory T. Vlachos: “Over the years, the high level of the


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How to Attract Foreign Investment quality of the services rendered by our lawyers, the prompt and on the spot reply to our clients’ demands, along with the unique feeling of trust offered, has made SARANTITIS famous for being the law firm, which handles demanding transactions, while providing value-added services to clients.” Who is a typical client? Sashi Nchito : “Our clients range from large mining outfits, banks, corporate entities, to individuals. We have also, in the recent past done prosecution work for the Government of The Republic of Zambia.” Gregory T. Vlachos : “A typical client would be a foreign legal entity, which decides to invest and establish a presence in Greece, either alone or jointly with a Greek partner. In this context, we assist large multinational investors in structuring and implementing complex investment projects from ground level to day-to-day operational legal support. Furthermore, SARANTITIS’ unparalleled litigation expertise secures the investments of the aforesaid clients in relation to any potential dispute within the Greek territory. Please summarise the primary statutes and regulations that govern foreign investment in your jurisdiction and its current level. Sashi Nchito : “The principle Act regulating investment, foreign and local, is The Zambia Development Agency (ZDA) Act number 6 of 2006 which offers a wide range of incentives in the form of allowances, exemptions and concessions to companies. The Act also provides for investment thresholds that investors have to meet to qualify for fiscal and non-fiscal incentives. “General incentives to investors in various sectors are provided in various legislations that govern the Zambia Revenue Authority (ZRA), including the Customs and Excise Act, Income Tax Act of 1966 and the Value Added Tax Act of 1995. “In terms of Dispute Settlement, The Arbitration Act No 19 of 2000 applies to both domestic and international arbitration

and has an appendage the United Nations Commission of International Trade Law (UNCITRAL) Model Law. It aims to provide for an arbitral procedure which is fair, efficient and capable of meeting the specific needs of each arbitration proceeding. It also provides for the recognition and enforcement of foreign arbitral awards under the New York Convention to which Zambia is a signatory. “Furthermore, Zambia is also a party to the World Bank’s Multilateral Investment Guarantee Agreement and the African Trade Insurance Agency, and is a member of the International Centre for the Settlement of Investment Disputes (ICSID) and the United Nations Commission of International Trade Law (UNCITRAL).” Ndeye Khoudia Tounkara : “The Agency of frame and development of small and medium-sized enterprises ( ADEPME) It has for mandate to support SME(Small And Medium-Sized Enterprise) and to promote the entrepreneurship. "At present, more 3.700 Senegalese SME(Small And Medium-Sized Enterprise) are profitable programs of the ADEPME. The Agency of the Promotion of the Investment and the Big Works ( APIX) which has the following mission: · Improvement of the environment of the business in Senegal · Promotion of Senegal as destination of investment · Identification of national and foreign investors · Follow up of the contacts and the evaluation of the projects of investment “The Office of creation of companies ( Bce), accommodated in the center of facilitation of the administrative procedures ( Cfpa) of the Agency for the promotion of the investment and the big works ( Apix) favored the creation of more than 1100 companies in Senegal.Its role is of to facilitate the creation, in 48 hours, of a company in Senegal, instead of 58 days previously. “Between January and May, 2011, the amount of the planned investments

amounts to 19 195 898 362 FCfa ( 25 104 911 GBP) , for 17 registered and followed projects, and 241 permanent jobs according to the Chief Executive Officer of the Apix.” How do the regulatory authorities enforce these laws and regulations? And how are they supervised by their regulatory authorities? Sashi Nchito: “The Zambia Development Agency established in 2000 is the principle regulatory body for investment in Zambia. It was born out of an amamalgamation of five statutory bodies that previously operated independently to foster economic growth and development by promoting trade and investment through an efficient, effective and coordinated private sector led economic development strategy. The ZDA is also responsible for promoting complementarities between government and private sector investment through Public-Private Partnerships (PPPs) in infrastructure projects. “The Zambia Development Agency has extensive powers and functions which are set out in the ZDA Act but when it comes to regulatory functions, it mainly ensures that the provisions of the Act are given full effect. It is falls under the Ministry of Trade and Commerce which ensures that the mandate of the agency is fulfilled. The Minster of Commerce Trade and Industry exercises supervisory authority over the agency by appointing the Board of Directors which comprises of members of the public and private sector as well as civil society organizations. The Minster is also empowered to give any directions relating to how the agency is to discharge its functions. “The agency undertakes monitoring exercises to measure the extent to which the investment and employment pledges made by companies with investment licenses have been fulfilled. It also collects information on investor concerns and perceptions with regard to the general business environment and investment climate.” Gregory T. Vlachos : “The General Secretariat of Development & Competitiveness, which belongs to the Ministry of Development, Competitiveness & Shipping, monitors foreign investments.

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How to Attract Foreign Investment Potential failure of any public authority to comply with the laws and regulations regarding foreign investments would result in an administrative dispute, which comes within the jurisdiction of the Greek Administrative Courts.” What methods are available in your jurisdiction to boost global investment competitiveness? Sashi Nchito : “Zambia is engaged in increasing its investment opportunities by, among other things identifying the availability of previously unexplored natural resources. For instance, there is potential for oil deposits in Zambia. This can be seen from the Oil exploration licenses which have in the recent past been given to investors. “More importantly, for the expeditious settlement of disputes, the commercial registry of the High Court for Zambia is now fully functional and it handles commercial matters in a ‘fast-track fashion’. This has encouraged investment in that investors can now rest assured of speedy resolution of any disputes that may arise in the course of conducting their respective businesses. “Also, the recent development of the Lusaka South Multi Facility Economic Zone (LS-MFEZ) is set to improve Zambia’s investment profile. The Zambia Development Agency (ZDA) reports that the development of the project is expected to stimulate growth through foreign and local investments, research and development. “Zambia has also put in place favourable tax laws for foreign investors and its political stability continues to be an attraction for foreign investors. “The county has also opened up investment opportunities in the tourism sector which has huge potential because of the vast natural resources. “All of these investment enhancing mechanisms have resulted in an increase in FDI in Zambia in the recent past. In 2010, the ZDA recorded investment pledges of US$ 4.7 billion mainly due to significant

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investment pledges in the Manufacturing and Mining Sectors.” Has the economic crisis altered the level of foreign investment in your jurisdiction? “The global recession has affected Zambia in a number of area including a decline in investment, falling remittances from overseas workers, and possible cuts in foreign aid. The ending of the crisis has however improved the investment situation in Zambia.” Gregory T. Vlachos : “Despite the severe economic crisis Greece is facing since 2010, the country's performance in attracting foreign investment in 2010 was satisfactory in comparison with the previous year. The total (gross) capital inflows to the country in 2010 amounted to 4 billion Euros, while net inflows exceeded 1.6 billion Euros.” What are the current global patterns of foreign investment? Where are the current hot spots? Sashi Nchito : “The United Nations Conference on Trade and Development (UNCTAD) study, the World Investment Report 2010 paints a bright picture for global FDI trends and estimates that global inflows would pick up from $1.1 trillion in 2009 to over $1.2 trillion in 2010 and head back towards the pre-crisis level of $1.6-2 trillion in 2012. This shows that FDI is expected, globally, to be at a rise.” Reuters on 22 July, 2011 reports that the top 10 UNCTD investment destinations are: China; United; States; India; Brazil; Russia; Britain; Germany; Australia; Indonesia; and Canada Why are some countries more conducive than others in attracting foreign investment? What incentives do they use to attract foreign investors? Gregory T. Vlachos : “Over the past few decades time-series econometric analysis and numerous surveys of international investors have shown that such factors as basic infrastructure, political

stability, and the cost and availability of labor are the most influential factor for multinationals in selecting investment locations. In our view, multi-national groups of companies are likely to be more sensitive to tax incentives, because they will be better able to exploit them by transferring their activities from one country to another. Indeed, the Internet could increase tax competition by making it much easier for multinationals to shift their activities to low-tax regimes.” As the world becomes smaller and markets intermingle, what are your predictions regarding foreign investment, both globally and locally, over the next 24 months? Sashi Nchito : “It is likely that as the world moves towards the ‘global village,’ there will be an increase in investment between countries. The idea of the world becoming smaller entails that barriers to trade and investment such as tyrannical customs laws will fall off leaving a free movement of investment. Gregory T. Vlachos : “Globally, we believe that a constant, but slow, increase on the foreign investment will occur, especially after 2013, as many reports forecast. For Greece, promising prospects exist in the near future to attract foreign direct investment from Russia and Eastern Europe, the Middle East, Arab countries and Asia, particularly China, who are mainly interested in the energy, telecommunications, tourism, transport and logistics sectors.” Ndeye Khoudia Tounkara : “With the western countries which continue in the recession, the markets of emerging countries interest numerous investors who do not any more hesitate to invest abroad. “As such, Africa has an enormous potential in particular because of the wealth of sound under ground. “In Senegal: the investments will be less important considering the electoral terms of 2012, more the investments threatened because of the energy deficit.”


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How to Attract Foreign Investment Igor Odobescu

Managing Partner

IPTEH Building, 65 Stefan cel Mare Blvd., of. 806 Chisinau, Republic of Moldova

Tel: +373 22 27 93 23 Email: igor.odobescu@aci.md Web: www.aci.md ACI Partners Law Office was established by separation of the legal business from Ernst & Young Moldova and as such it draws from the latter's long-acknowledged ability to offer competent advice. Starting from January 2006 ACI Partners serves its clients under separate and independent brand. Igor Odobescu, MBA, LL.M, is Managing Partner of ACI Partners Law Office Moldova Investment Climate “From the very beginning of its independent existence (1989), Moldova considered foreign investments as one of the most important tools in developing a market oriented economy, creating sustainable economic growth and poverty reducing. We may say that in 20 years of independency Moldova has created an adequate legislation, warranting and protecting private investments, both foreign and national. Moldovan law does not make any discrimination between foreign and national entrepreneurs. Thus, foreign investors enjoy the same treatment as local investors; they are free to engage in any business activity and any Moldovan region, without restrictions and are warranted against expropriation. The State warrants full and permanent security and protection to private investment. Foreigners are allowed to invest in any property, except for agricultural and forest land. Since 2007 Moldova borders with European Union, after the accession of Romania, representing an additional impulse for Moldovan aspirations to European standards. “Moldovan law offers a number of benefits for investors, including tax ones and currently Moldova presents a “fiscal paradise” given the corporate income tax is set at 0% level.

“Moldova has adequate and developed enforcement legislation and specialized agencies to enforce the law. The timing of enforcement might be exceeding the average expectation, however using a professional adviser helps to assess and mitigate the potential risks beforehand. “Despite Moldova still lacking the stable political system the economy appears to follow its pace. Our Government recent steps, however, are very optimistic, manifesting a more flexible attitude toward entrepreneurs needs. In particular, different initiatives, including but not limited to the e-Governance, one-stop shop platforms, are encouraged to be used for simplifying business registration, authorization, and licensing, controlling and reporting procedures. Various schemes of public private partnerships are promoted by public authorities as a solution for the development of public infrastructure objects allowing the private entities access to such infrastructures based on long term collaboration. Export oriented investors are stimulated and invited to invest in free economic zones and industrial parks, where the Government has committed to ensure the necessary infrastructure for job creation and export efficiency. “The Government’s apparent efforts to improve business regulation strategies make us believe that we will have in Moldova a more attractive business climate for both foreign and national investors.”

Dr. Daniela Nemoianu Executive Partner

Tel: +40 372 377 800 Email: dnemoianu@kpmg.com Web: www.kpmg.ro KPMG insights: Investing in Romania, encouraging the daring The aim of KPMG member firms is to keep the legend going for the benefit of clients, people, and the capital markets. With nearly 140,000 people worldwide, member firms provide audit, tax, and advisory services in 146 countries and territories. In Romania, KPMG has been represented as part of the international network since 1994 and is a leading provider of audit, tax and advisory services in Romania and the Republic of Moldova as well, employing 600 people at 6 locations in Bucharest, Timisoara, Cluj, Iasi, Constanta and Chisinau. The combined value proposition of Romania sums up a wide range of advantages encompassing an attractive location, European Union membership starting with January 1st 2007, approximately 22 million inhabitants representing one of the largest markets in Central and Eastern Europe, rich natural resources, highly trained labor force, harmonized national legislation with the acquis communautaire, extensive network of bilateral agreements with other countries on investments promotion and protection, etc. Such advantages are making the country a promising investment destination with much untapped potential which can be leveraged in business and trade even if there are still some barriers of legislative unpredictability, bureaucratic inefficiencies, etc. In Romania, traditional sectors with good appetite for investment have been trading, automotive, banking sector, light industry (clothing, wood and tobacco), food and beverage industries, tourism, mining and energy. Latest, investors have been also interested in the fields of renewable energy, with a special focus on wind farms. Romania applies a favourable treatment to foreign investments. This means that foreign investors are generally allowed to invest in any field and in any type of business. An important step has been the creation in 2004 of ARIS, the Romanian Agency for Foreign Investment that had as its main purpose the improvement of

aspects of the business climate. Currently, such activities are carried out by the Romanian Centre for Promoting Trade and Foreign Investments, which has been established in 2009, under the subordination of the Ministry of Economy, Industry and Business Environment. Moreover, the Romanian Government has adopted specific regulations such as the Emergency Government Ordinance 85/2008 on stimulation of investments, providing the general framework regarding the state support measures granted in consideration of Romania’s sustainable development, through promotion of certain categories of investments. In accordance with its provisions, certain facilities such as financial aid for newly created working places, nonrefundable funds for purchasing assets, interest facilities, etc may be granted based on state schemes and subject to the observance of the EU legal framework applicable for state aid. Undoubtedly Romania has been hit also by the global economic crisis, but is standing strong and performing relatively well amidst the global recession. Recently, it has been announced that the country officially emerged from recession and there are encouraging signals for economic growth and healthier indicators. Over the past years, Romania has struggled to strengthen its legal, tax and accounting system in order to be able to offer a more attractive business environment. The investors in the country can expect to find a foreign investment regime which is adapting and evolving, with improved standards for saving viable business, such as special preinsolvency procedures established recently for distressed companies trying to avoid bankruptcy, new building regulations generating significant time and cost savings in dealing with construction formalities, recently reformed labor regulations, new public private partnership regulation, extensively revised competition legislation, etc as well as new Civil and Criminal codes together with the correspondent procedure codes, to be launched before the end of the year. Appealing investment areas include infrastructure, energy, financial services, retail, IT, bio-agriculture.

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How to Attract Foreign Investment Nnenna Ejekam Principal Partner Peter Crabb Client Relations Manager

Consulting House, 70A Itafaji Street, Dolphin Estate, Ikoyi LAGOS, Nigeria Having originally trained in the early 1980’s with Irving & Bonnar, the largest and oldest law firm in Nigeria, Nnenna Ejekam Associates was established in 1995, with the specific intention to specialise in the field of corporate and company law, with particular emphasis on meeting the needs of multi-national and foreign companies, in the areas of project investments, international and domestic loans/securities and capital market transactions in Nigeria. Legislation Approving, Monitoring And Controlling Foreign Investment “In 1995 the then Military Government of Nigeria considerably relaxed the previously existing foreign exchange and investment laws, with the Nigerian Investment Promotion Act. It became possible for any foreign owned company to invest in almost any business activity in Nigeria, either by way of a joint venture with a Nigerian partner or company or by incorporating a new company, which could be 100% foreign owned. “The Act provides that any foreign investor has unconditional guarantees of remittance of dividends, profits and capital and that the investment can not be nationalised by the Government without the prompt payment of fair and adequate compensation. The foreign investor is also guaranteed a number of Expatriate Quota positions, in order that he can send in his own management and technical staff to administer all aspects of the new business. The Act is administered by the Nigerian Investment Promotion Commission (“NIPC”), to whom all applications for inward investment must be made on the prescribed form and with adequate supporting detail.” Recent And Future Trends In Foreign Investment In Nigeria “The NIPC Act has been remarkably successful in attracting new foreign investments

Tel (NE): +234 803 308 7226 Tel (PC): +234 806 0000 487 Web: www.nnennaejekamassociates.com

into the country. Particular areas of foreign investment have been in telecommunications where there are now more than 50 million mobile phones and in consumer goods, where well known international consumer goods companies such as Nestle, PZ Cussons, Lever Brothers and many others have invested in new production and distribution facilities. “The global financial crisis of 2008 did not impact unduly on the Nigeria economy, given that the local banks were not involved in such practises as ‘sub-prime’ mortgages, although the local banks have suffered a number of self-inflicted management crises, which have led to a spate of mergers between some banks and the nationalisation of others by the Central Bank of Nigeria. “Investments in the oil and gas sector have reduced dramatically in last 3 years, as the Federal Government has proposed a new Petroleum Industry Bill, which seeks to considerably re-write the contractual and financial relationship between the Government and the oil companies, both international and domestic. Once the final details of this Bill have been made known and assimilated, the flow of investments into this sector should again surge. Meanwhile there is considerable international interest in investing in the various parts of the state owned Power Holding Company of Nigeria PLC, which are in the process of being offered for sale to new investors. Investment in new generating and distribution facilities are urgently required, given that the country’s generating capacity is barely 4,000MW. “There remains therefore a considerable scope for new profitable investment in Nigeria. The present Government, elected earlier in 2011, has made foreign inward investment a major plank in its economic policy and investments in the critical areas of the economy are actively sought and encouraged.”

CORPORATE & COMMERCIAL TRUST & FIDUCIARY FUNDS INSURANCE PROPERTY DISPUTE RESOLUTION INSOLVENCY

Offshore PO Box 69, 18-20 Smith Street St Peter Port, Guernsey GY1 4BL Tel +44 (0)1481 713371

www.babbelegal.com Thirty Four


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International Company Formations: Doing Business around the world

International Company Formations: Doing Business around the world

Cabinet Irénée FALANKA Irénée Falanka Bingi irefalanka@yahoo.fr T: (+243) 999936633 86, avenue Maringa, Commune de Kasa-Vubu, Kinshasa, République, Démocra tique du Congo

Chief Law Agu Ezetah & Co. Chief Anse Agu Ezetah info@aguezetahandco.com anseezetah@yahoomail.com anseezetah3@gmail.com www.aguezetahandco.com

Ahmed Abou Ali agaa@hassouna-abouali.com www.hassouna-abouali.net T: +20 (0)2 27924101 +20 (0)2 27924102 2 Abdel Kader Hamza St., Cairo Center Bldg, Garden City, Cairo, Egypt.

Matovu Emmy emmy.matovu@marma.co.ug matovuemmy@yahoo.com www.marma.co.ug T: +256-414-236818 +256-772-456538 P. O. Box 29447 Kampala

Pavlina Constantinides pavlina.constantinides@demetriades.com www.demetriades.com T: +357.25.800.000 13 Karaiskakis Street, CY3032 Limassol, Cyprus P.O.Box 50132, 3601 Limassol, Cyprus

Svetlana Neceva sneceva@on.net.mk www.pepeljugoski.com.mk T: +389 2 3211 004 +389 2 3211 005 Str. Veljko Vlahovik No. 4/1-1, 1000 Skopje, Republic of Macedonia

Ruby Asturias rasturias@aczalaw.com www.aczalaw.com T: (502) 2415-6700 3ª. Ave. 13-78 Z.10 Edificio Intercontinental Plaza, Torre Citigroup, Penthouse Norte, Nivel 17 Of. 1702, Ciudad de Guatemala, Guatemala, C.A. Corpus Globe Corporate Solutions Ltd Pradeep Bhandari proteam@companyanywhere.com T: 914425611073 #7 Sriji Place, 17, EVK Sampath Road, Vepery, chennai, Tamilnadu, 600007, India.

Juan Carlos De Moya jdemoya@gclawdo.com www.gclawdo.com T: (809) 334-6565 Calle José A. Soler No. 53, Sector Paraíso, Santo Domingo, Distrito Nacional, República Dominicana

NIMBA CONSEIL SARL Juriste Consultante tallaminata@nimba-conseil.com www.nimba-conseil.com T: +224 24 55 55 02 +224 62 32 38 61 BP: 5099 Conakry - Rép. de Guinée

ebanda@corpus.co.zm T: 260 211 840478/ 79 Stand No. 3065A, Suite B, Fairview, Great East Road, P.O Box 39371, Lusaka, Zambia

Jean-Luc Gbati Sonhaye www.fondation-heinrich-klose.org T: +228 91 15 21 95 Rue Elavagnon, Tokoin-Doumasséssé 13 BP 129 Lomé-Togo

Charles R.B. Rwechungura c.rwechungura@crbafricalegal.com www.crbafricalegal.com T: +255 784 507 429

Katarzyna Buczkiewicz katarzyna.buczkiewicz@gide.com www.gide.com T: +48 22 344 00 91

6th Floor Amani Place, Ohio Street, PO Box 79958, Dar es Salaam, Tanzania.

Pl. Piłsudskiego 1, 00-078 Warszawa, Poland.

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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, within this feature we speak to the experts about the ease of trading in each representative jurisdiction, examining how different regulatory environments can either benefit or hinder business growth…. Ruby Asturias is a co-founder of Aczalaw, a Central American Law Firm with offices in Guatemala, El Salvador, Honduras, Costa Rica and Nicaragua. Currently I am the Directing Partner of Aczalaw Guatemala. Irénée Falanka is head of Cabinet Irénée FALANKA , a firm that specialises Criminal law, civil law and business (commercial) law. Chief Anse Agu Ezetah is Managing Partner at the Law Firm, Chief Law Agu Ezetah & Co. Pavlina Constantinides, Partner, in charge of the company incorporation section within the firm of Chrysses Demetriades & Co. LLC, Limassol, Cyprus.

Ethel Banda is the Legal Manager for Corpus Globe Corporate Solutions Limited (“CGCSo”) and a qualified advocate of the High Court of Zambia. Milvio Coiscou is partner and Director of Corporate Practice Group at González & Coiscou, a Santo Domingo, Dominican Republic, based law firm. Ahmed Abou Ali is the managing partner of Hassouna & Abou Ali Law Firm, Cairo, Egypt. Matovu Emmy is General Manger at Marma Technical Services Ltd. Svetlana Neceva is an Attorney at law

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in the Law office Pepeljugoski in Skopje responsible for legal services and support of domestic and foreign clients in the following areas: Company law and NGO's, investments, Obligation and Contracts law, Commercial law, Law of energetic, Property law, Pledge law, Customs law, Family law, Labor law, Heritage law. What are your specific areas of expertise when it comes to company formation? Ruby Asturias: “With regards to company formations services in Guatemala, we are able to provide the whole spectrum of legal advice required to start an operation in Guatemala. Basic advice includes: company formation, corporate requirements to start up, obtainment of administrative license and registry required by the government, tax and labor structure, validation of contracts with local legislation, real estate, intellectual property. Our law firm is full service when it comes to initiate an operation within the region.” Chief Anse Agu Ezetah : “When it comes to formation of companies, which comes under Solicitor Services arm of our practice, my role is supervisory. My firm however registers all forms of companies in Corporate Affairs Commission, (the sole authorized Organization for that purpose in Nigeria) set up by the Law Company And Allied Matters Act hereinafter referred to as CAMA being its initials that has become it’s alias in Nigeria.” Pavlina Constantinides: “I have vast experience in the field of formation of companies in Cyprus as well as in other jurisdictions, following up all statutory requirements for companies, filing all necessary documents with the Registrar of Companies and generally seeing, through lawyers and other employees of the firm under my section the proper administration of the companies.” Milvio Coiscou : “Our Firm manages company formation and corporate transactions for clients in different areas the economy in the Dominican Republic. “Our

Firm

handles

companies’

incorporation processes, transformation from one corporate type into another, setting-up of local branches of foreign corporations, domiciling foreign corporate entities, in order to conduct regular business in the country, corporate acquisitions, corporate mergers and divestitures, amongother general corporate affairs. “Located in Santo Domingo, Dominican Republic, González & Coiscou embodies the dynamic and proactive approach that is needed in today’s business and legal environment, and which is a key advantage in one of the most economically active areas in the Caribbean and Central America. The different approaches in which its principal partners have developed their individual practices, allows for a broader view on how to handle day-to-day or highly complex legal issues. The well balanced top of the line legal education of its associate attorneys, and their focus in the different areas of practice, ensures an efficient and effective response to the needs of its clients. Having emerged from the union of well recognized attorneys, with over 18 years of practice in the most dynamic sectors of the Dominican economy, González & Coiscou has claimed a place within the leading legal firms of the Dominican Republic.” Ahmed Abou Ali: “I render assistance to clients in formulating the most advantageous structure for their Egyptian ventures, taking into consideration tax, managerial, risk and market factors. To effect the investment, I undertake the formation of corporations and partnerships as well as of branches or representative offices and handle all legal aspects of setting up the appropriate infrastructure before the Investment Authority. I also advise on the regulatory and registration requirements. Once the new venture has become operational, the firm provides an ongoing advisory service to both shareholders and management, covering legal and financial aspects of the day-to-day operation of the investment.” Svetlana Neceva: “In the procedure of company formation law office takes all necessary activities from the beginning of the procedure-expression of interest for


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International Company Formations: Doing Business around the world formation until obtaining a decision from the Central registry of Republic of Macedonia for registration of the company and starting of the company with working. These activities include preparation of documents necessary for formation of company according to Law of trade companies of Republic of Macedonia, obtaining a necessary approvals, licenses, and other required documents depending for the type of the company subject of registration or type of the founder of the new company, translation and notarization of the documents, submission of the documents to the Central registry of Republic of Macedonia, opening a bank account of the new company, obtaining a VAT number from the Public revenue office and other activities depending form the willingness of the client.” Please describe the legal requirements when it comes to setting up a company in your jurisdiction. Irénée Falanka : “Although there are many types of companies, but companies called “ société par action à responsabilité limitée” in short S.A.R.L. and “société privé à responsabilité limitée” in short “S.P.R.L.”are the most expanded in our jurisdiction. So I shall describe only the legal requirements about these both companies. 1. Shareholders must draw up the statutes of the company and sign it. 2. The statutes must be legalized by a public notary ; shareholders may appear before him themselves or by a representative especially a lawyer . 3. A copy of legalized statutes must be registered in a public office called ” Greffe du Tribunal de Commerce” where a document called “acte de depot” will be delivered . 4. Meanwhile the company must obtain a “numéro de régistre de commerce” in short “N.R.C” 5. From this moment the company is legally constituted (especially for S.P.R.L. for S.AR.L. a presidential authorization is needed) 6. An exploitation permit is also required for both companies for activities. This document is delivered by local corporation. It is important to note that S.A.R.L. requires at least seven shareholders while S.P.RL. requires at least two. And this latter type is prohibited for insurance, bank and financial companies.

Irénée Falanka : “Due to many taxes it’s not easy to do business in our jurisdiction. But apart from this problem and from time to time political interference it’s almost beneficial to do business.” Chief Anse Agu Ezetah : “Most regulations benefit business growth. a) The provision of shares, indicate individual shareholders stake and maximum extent of liability in the case of the company folding up (except the company is unlimited or limited by guarrantee). b) The registration documents filed with C.A.C are the best information to the prospective third-party, desiring to do business with the company. c) Certain parts of the economy are reserved either exclusively for the indigene or some percentage of the shareholding is reserved for the citizens. In this way the registration process ensures compliance with such law. For instance, in the solid mineral mining and or oil and Gas industry, or banking, there is requirement for government to issue License. So the process of registration, all the provisions, necessary for the securing of that License will have to be carefully followed, and the registration process will thus compel the new company to pursue the issuance of License up to a satisfactory stage before the registration process will completed. 4ii. (a) the Nigerian government has created tax free zones in Lekki Lagos and Calabar to encourage industrialization in these areas. (b) The government also grants period of tax moratorium, to new companies and industries, to enable them properly take off. The tax regime in Nigeria is mild when compared to that of industrialized nations. 4iii. Of-course the bureaucratic applications of regulations can be a source of worry and distress for an investor. However, ultimately, these problems are sorted out.

Pavlina Constantinides: “Cyprus companies are incorporated with the filing at the Registry of Companies of the Republic of the Memorandum and Articles of Association subscribed by some person or persons who take up some shares in the capital of the company. Following such filing the Registrar of Companies will issue a certificate of incorporation. From the date of issue of the certificate of incorporation the company acquires legal personality and can commence operations.”

Pavlina Constantinides: “Cyprus has been for decades one of the most attractive jurisdictions for the formation of companies which operate internationally. The incorporation of Cyprus companies is one of the main factors for the development of Cyprus as an international business and financial center, a sector which has substantially contributed to the development of the country and to the increase of the country’s gross domestic product. The main reason for which international entrepreneurs use Cyprus for incorporation and operation is the most beneficial and advantageous tax system of Cyprus, coupled with the extensive network of double tax treaties. In addition the legal framework under which Cyprus companies operate, the fact that the system offers security to those dealing with Cyprus companies and the possibility of structuring deals with adequate securitisation are factors which are often considered.

Does regulation in your jurisdiction hinder or benefit business growth?

Ethel Banda: “The regulations that are in place do not hinder business growth simply because the application process is very

For both types the statutes must contain: registered capital, head office, shareholders, name of company, trustee board, duration, activities,.. In both types at least 51 of registered capital must be reserved to the citizen.”

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International Company Formations: Doing Business around the world straight forward and not compared to other countries.”

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Matovu Emmy : “A resolution must be made and registered with the Registrar of Companies and later alone Memorandum of Association is formally done.” What can your jurisdiction offer to prospective companies? Are there any tax benefits? Ruby Asturias: “Guatemala is a country that benefits foreign investment. Our legislation includes advantages and tax benefits for the growth of business, for example the Foreign Investment Law (Decree 9-98), in which is consolidated the principle that confirms equal rights between foreign and national investor which includes, Private Property; No expropriation regarding foreign investment; Free commerce; Free access to currency; Insurance for investment; Prohibition of double taxation; Alternative means of resolution for controversies.” Irénée Falanka :“Yes, but the prospective company had to complete legal requirements. Generally companies which invest in areas such as agriculture, fishing and breeding are exempted. “There is also an integral exemption from turnover tax called” impôt sur le chiffre d’affaires “and import duty which is granted to companies for importation of new engines,tools and material necessary for equipment.” Pavlina Constantinides : “As compared to other jurisdictions the financial and banking environment in Cyprus is of very high standard and the banking sector has rabidly advanced and favorably compares with banking sectors in other European Union member states. The corporation tax in Cyprus is the lowest within the European Union, being only 10%, and by the application of exceptions from taxation of dividends the benefit to shareholders of Cyprus companies in taxes are substantial. A Cyprus company can pay dividends to non-resident shareholders without any tax in Cyprus.” Ethel Banda: “The government offers some general and some sector specific tax

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concessions which are too numerous to mention but some of the general ones includes: • Import VAT relief for VAT registered businesses on imports of eligible capital goods; • Zero rate of VAT on export of taxable products; • Relief of VAT on transfer of business as a going concern; • Equal treatment of services for VAT irrespective of domicile of supplier; • Registered businesses allowed to re-claim 20 percent of input VAT paid on petrol; • Reduction of VAT rate for investors in manufacturing, agriculture, commercial banking and insurance operating in tax free zones; and • Income from non-traditional exports is taxed at a reduced rate of 15%.” Milvio Coiscou: “Regulations in the Dominican Republic open the way for foreign investment. Since the 1990s regulations have been reviewed and brought up to date, in order to allow a more fluent and dynamic business environment in the country. Repatriation of corporate benefits, or reinvestment of these, is open for every investor, as no restrictions are placed as to how corporations or investors may dispose of their benefits. As well, certain economic sectors enjoy tax exemptions and/or benefits, such as export free zone entities and alternative energy initiatives.” Matovu Emmy : “The regulations are not so strict to hinder the business growth as I may say, slight business growth have been seen in different areas once a business is set. In my capacity, I can give guidance in the whole formation process and also advise on some particular business to be done. This depends on specific businesses done otherwise compliance with taxes are automatic.” How does ease of trading in your jurisdiction compare to other countries? Ruby Asturias: “Geographically speaking, Guatemala is well recognized as a suitable center of operations for those companies that want to trade within the Central American Countries; as well as

having a strategic position to serve as a trading bridge (both terrestrial and maritime with direct access to Pacific and Atlantic Ocean) to North and South America. “Financially speaking, it is important to mention our free currency policy that allows legal trade in other currencies, such as US Dollars and Euros; as well as having the possibility to open local monetary accounts in different currencies. Also, a very important characteristic that eases trading is the presence of Multinational Banks that are globally recognized, having international standards to credit access and possibility of managing and obtaining foreign investment. “Tax wise, we can identify the following essential taxes that give us an idea on how ease trading can be in Guatemala: a.) reception of investment: in general terms, no tax is applicable to the reception of funds; b.) operational taxes (once the company is incorporated): our system is based on a 5% withholding tax system that is our general regime and a very simple one. On the contrary, the contributor can choose the application of an exceptional 31% income tax regime, that allows the deduction of all the costs and expenses that are necessary for productions, prior to applying said %. Contrary to the first general regime, this regime is much more complicated in the sense that there is a list of requirements to be fulfilled as well as much more control and auditing from the tax authorities. Other relevant taxes: 12% of Value Aggregated Tax that is administrated through a debit/credit system and specific tax for specific industries such as: liquor, cigarettes, mining, oil, real estate among others; c.) repatriation of capital to jurisdiction of origin: 10% of income tax for payment of dividends, tax that is exonerated if the company has already paid the Income tax according to local law (that is through the 5% of 31% Income Tax Regime).” Irénée Falanka : “Such companies are exempt from “droit proportionnel of 3% on registered capital (for S.A.R.L.) . For all companies an exemption from “impôt exceptionnel “on foreign staff until the beginning of sale of products.”


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International Company Formations: Doing Business around the world Pavlina Constantinides: “Cyprus companies have no problem to operate internationally, they are well accepted and as mentioned above offer security to those dealing with them. Furthermore the level of professional services both as regards legal as well as auditing and accounting are of very high standard. Law firms in Cyprus give full support to Cyprus companies in their international transactions at reasonable cost.” Ethel Banda: “We are of the opinion that it is fairly easy to trade in Zambia compared to other countries for the following reasons: “There are no exchange control restrictions and consequently there is no requirement to obtain approvals for the purpose of transferring funds. “Banking facilities are easily accessible as long as the applicant complies with the KYC requirements and it takes less than 3 days to open a bank account for example; “Credit facilities are also easy to access and there are no taxes or fees payable on granting of security or a loan, save for nominal registration fees generally for most of the registable securities (usually calculated at 1% of the secured amount with a ceiling of about US$400) for each respective registry “Corporation tax is chargeable at 35% for those companies not listed on the Stock Exchange and for those listed at 33%.” Milvio Coiscou:”The Caribbean has evolved as a region, thanks to the evolution in the global commercial agreements such as the World Trade Organization Agreements, as well as regional agreements, to whichdifferent countries of the region have gained access. Until few decades ago, most of the Caribbean’s economies were based in the exportation of raw materials and commodities. Nonetheless, these economies have developed into important foreign investment recipients, as well as manufacturing platforms for many important consumer goods corporations, as well as for high end and technology based products. “In the particular case of the Dominican Republic, our country benefits from the economic stability and growth that has taken place form many years. Its access to multilateral trade and investment agreements, such as the Dominican Republic - Central America Free Trade Agreement (DR-CAFTA) with the United States of America, and the Economic Partnership Agreement (EPA) with the European Union, among many other bilateral free trade as well as investment agreements, have provided the investors efficient tools and stable rules regarding their investments in the Dominican Republic. This, in turn, has allowed for an important and noticeable development in the fields of manufacturing, distributorship, real estate development, infrastructure development, tourism, maritime port and airport facilities, telecommunications, among other dynamic fields in the economy.” “Banking institutions in the Dominican Republic are highly competitive, and have benefited from mayor revisions in theirregulatory framework. Hence, banking and credit operations show dynamism and strength.

“Local corporate taxes have been set, by a revision of the Tax Code enacted this year, at a flat rate of 28% on benefits. This rate is to be reduced by 1% per year, until it reaches 25%.” Matovu Emmy : “Being the fact that we are in a land locked country, our business trading is not similar to that of none locked ones but generally no big difference have been sported apart from the excessive variance in the dollar rates compared to other countries. Access to banking and credit facilities is much easier in most of the banking sector though some are subject to deeds. Corporation Tax is applicable where necessary.” Svetlana Neceva:”With the reforms that were made in our country with setting up of the one-stop shop system, the access of the companies to the bank accounts is very simple having in mind that the accounts are automatically opened in the appropriate banks in the procedure of registration with the electronic connection of the Central registry with the banks in the country. But, besides that Macedonian banks are still not well oriented to the companies for issuing credits or other monetary securities especially for the new opened companies, having in mind the long and difficult procedure for obtaining a credit and the huge documentation that are asking as a proof of the financial situation and capability of the company. In this way, the companies are limited to trade with the capital that already have, and foreign investors are forced to secure a monetary assets from foreign banks and sources. The flat tax system that is already incorporated makes the administrative procedure very simple, the calculation of the taxes is easy, and the special unit for the large tax payers that is organized in the Public revenue office ease and abridge the procedure.” What are the logistics of trading internationally and what support do you offer to your clients attempting to break into new markets? Chief Anse Agu Ezetah : “The logistics of trading internationally have been substantially simplified by internet services. Nigeria is basically an import oriented economy. So the local business man desiring to import, will have to identify his overseas supplier, and the samples of the goods will pass the tests of local standard organizations for the particular goods being imported. Once, that is done, the goods can be paid through the importers bankers, who will depending on the terms of the contract pay at the agreed time.” Ahmed Abou Ali: “An important issue relating to trading internationally is the regulation of imports and exports. Imports and exports are regulated by Law No. 118 of 1975 and its new Executive Regulations No. 770 of 2005. “Commodities subject to specific import controls may not be imported unless they are examined to ascertain their conformity to the conditions and specifications decreed by the law, or unless they are accompanied by a certificate of examination approved by the Egyptian authorities, conforming their fulfilment to the regulations. “Import/Export Licensing: Trade regulations provide that goods

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International Company Formations: Doing Business around the world may be freely imported and exported provided they are not on the prohibited list and the relevant duty is paid. Egypt no longer requires import licenses, except for items on a banned list. “An Egyptian Company with foreign participation may not be registered as an importer or commercial agent. Importation must be done through an intermediary. Import Registration Law No. 121 of 1982 requires that importers be listed in the Register of Importers and be an Egyptian national. However, a company may import equipment and materials needed for establishment and operation. However, an Egyptian Company with foreign participation may be a shareholder in an Egyptian Company that acts as an importer or commercial agent. “Exclusive “import agency” arrangements entered into by international suppliers are approved by the law as long as they are not in violation of the law on competition and the practices are not in harmful to the market. Rights and obligations of the “import agency” is a contractual matter. If the agreement is characterized and registered as an agency, the rules on termination of agents will apply. If not so registered then it is only the agreement that governs. “With regards to investing in foreign markets, Egyptian law leaves the regulation of this matter to the laws of jurisdictions were investments will be made. Generally, there are no limitations on participating in foreign legal entities or opening branches in other jurisdictions. “Finally, it is worth noting that, according to the IFC Doing Business 2011 Report, Egypt is one of the top ten reformers in trading across borders. In particular, Egypt improved the electronic data interchange system as well as customs administration.” Matovu Emmy : “Currently am doing international trade within the following countries;- China, India, France, United Arab Emirates, Kenya and other African countries to mention a few. Therefore, logistics to that effect can be discussed in detailed depending on the particular

Forty

opportunity business and the current dollar rate.” What are the main factors to be considered when employing staff? How can be potential pitfalls be avoided? Pavlina Constantinides: “The main factors which are taken into consideration when employing staff are the qualifications and experience of the staff to be employed, reliability, confidentiality, zeal and enthusiasm for the performance of duties. Staff are employed on probation for some period of time and during that period they can be fired without a problem.” Ethel Banda: “Employment of staff is governed mainly by five statutes with some being: 1) The Employment Act Chapter 268 of the Laws of Zambia (the “Employment Act”); 2) The Industrial and Labour Relations Act Chapter 269 of the Laws of Zambia; and 3) The Minimum Wages and and Condition of Service Act Chapter 269 of the Laws of Zambia and any statutory instrument issued thereunder. “An employer must strictly adhere to these statutes and failure to do so incurs some strict liabilities. For example when a company intends to terminate an employee’s contract of services the Employment Act gives guidelines how this should be done, failure to follow the guidelines may render the purported termination wrongful dismissal.” Matovu Emmy : “One of main factors is experience and expertise; this can drive the rest of the factors of education level, renuminations. Once this is met, then supervision and time management must be followed well to avoid pitfalls. “ 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? Ruby Asturias: “Due to Governmental Elections that are being held in September, 2011 and an imminent change of Government Policies for the following 4 years; there is uncertainty of changes that will be expected. Notwithstanding the

above, Guatemala is a well consolidated institutionalized country with a set of laws and regulations that have provided certainty and stability on foreign investment and doing business matters, for the last 3 decades. “More and more each day International Organizations are pressuring Central America Region to implement better quality of rules and regulations, always tending to improve and stimulate business climate creating more opportunities for doing business in our country.” Pavlina Constantinides: “During the first years of the economic downturn the Cyprus service industry was affected adversely and this was demonstrated in the number of new companies incorporated in Cyprus but also in the drop of international transactions in which Cyprus companies were involved. This downturn has been reversed from the beginning of 2010 onwards and the prospects for the next twelve months are quite encouraging as more and more international business are attracted to or through Cyprus. “Although recently some new taxes have been introduced and some tax rates have been increased in some respects the corporation tax of 10% has remained the same. The only financial burden which will affect the Cyprus companies is the requirement for the payment of an annual levy in the amount of €350 for each company on the Register, with the exception of dormant companies and companies which do not own any assets. Such levy is not payable for the first year of incorporation of a company. “In addition in order to attract highly paid executives to move their base of operation in Cyprus a special tax incentive has been introduced and is valid from 1st January, 2012. Under this incentive the executives employed in Cyprus with annual emoluments in excess of €100.000 shall have deducted from their taxable income 50% thereof. This benefit shall apply for a period of five years. The higher tax rate on personal income in Cyprus is 35% applicable for amounts in excess of €60.000.”


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International Company Formations: Doing Business around the world Ethel Banda: “The Zambian government in the last few years has been pursuing aggressive business reforms to encourage increased private investment and reduce business costs, therefore encouraging a lot more investment from locals as well as foreigners.” Ahmed Abou Ali: “Egypt has passed through the economic downturn of the past three years with relative ease. Economic growth remained, although at a slower rate. The recent events that took place in Egypt during 2011 may slow the economic recovery. Strikes and labor union protests seeking better work conditions and higher wages have impacted the level of productivity but there are signs that these protests are now fading away. As a result, the government is currently preparing a new law that sets minimum wages in the public and private sectors. However, there have been no significant changes in investment laws and regulations. Svetlana Neceva : “Having in mind the economic crisis that we

A

cquisition International speaks to Jaime Carvalho Esteves, Tax Lead Partner of PricewaterhouseCoopers - SROC, Lda (PwC) in Portugal about doing business in Portugal.

PwC has been in Portugal for more than 50 years providing industryfocused assurance, tax and advisory services to build public trust and enhance value for clients and their stakeholders. PwC is proud to count with a large number of prestigious clients, including the main Portuguese economic groups, financial services institutions and companies in the industrial and services sectors, as well as state-owned entities and, as may be expected, numerous international clients. The Portuguese firm has currently 27 Partners, of which 22 are based in Lisbon and five in Oporto, with a total of around 800 permanent staff. The Portuguese firm is present in Cape Verde since 1996, and has a jointventure with PwC Angola. PwC Portugal was awarded Transfer Pricing consultant of the year in Portugal in 2008, 2009, 2010 and 2011, by the International Tax Review. PwC Portugal is the only triple certified Big Four company: management efficiency; environmental protection and hygiene, security and health parameters in the workplace. “Citizenship Prize for Companies and NonGovernmental Organisations” (Prémio Cidadania das Empresas e Organizações Não Governamentais) has been created by PwC Portugal, in collaboration with the AESE School of Business. The prize is currently in its fourth year and aims to recognise excellence in the application of policies for social responsibility. What are you specific areas of expertise when it comes to company formations? "PwC in Portugal expertise concerns the following areas, each directly and indirectly related with company formations: a) Audit and Assurance – PwC has the knowledge and experience necessary to help you with complex financial accounting issues

have on a global market in all business sectors in last year, and the influence of the crisis to economic growth of the countries, we can sum up that Republic of Macedonia had a marginally consequences to the economy. The stability of the banking sector in the country was kept in the period of the crisis, so we can expect stabilization in the real sector. The predictions of the government and the financial experts for the growth of the GDP for the next year are between 4-5%. “From the legal aspect, according to the implementation of the one stop-shop system-second phase which already started with obligation of all companies in Republic of Macedonia to register a business e-mail address of the company, in the next year we are expecting the system for electronic registration of companies to be completed and used from the companies as a easier way for submission of the documentation for formation and changes in the structure of the companies. Also, the amendments of the court procedure laws (civil and trade) will speed up the court proceedings.”

related to matters such as valuations, pensions and share plans, listings, IFRS conversions, and corporate treasury and company secretarial functions; b) Consulting – PwC helps organisations to work smarter and grow faster; PwC’s work is always evolving to respond to industry trends and management focus, combining deep technical skills in response to the clients' changing needs. Over time, what PwC does remains closely linked with helping clients improve the way they operate; innovate and grow; reduce costs; manage risks; leverage talent; and change the way they do business; c) Deals – PwC helps clients do better deals and create value through mergers, acquisitions, disposals and restructuring; working together with clients to help develop the right strategy before the deal, execute their deals seamlessly, identify issues and points of negotiation and value, and implement changes to deliver synergies and improvements after the deal; d) Tax services aim at providing clients with the advantages of comprehensive tax management, including tools to help anticipate the tax implications of management decisions; PwC’s objective is to prevent any negative impact of decisions and, simultaneously, enhance the respective advantages; the PwC network includes more than 30,000 tax advisors in over 150 countries, ensuring vast accumulated knowledge of the specific characteristics of several business areas and industries around the world and covering the following areas of expertise: Corporate Tax Structuring; Global Corporate Services; Transfer Pricing; Indirect Taxation; Individual Taxation; Mergers & Acquisitions Tax; Tax Dispute Support Services and Inforfisco (tax database). Please describe the legal requirements when it comes to setting up a company in Portugal? “The Portuguese jurisdiction currently provides for a mechanism to start a company online, called “Firm on the spot”. The name of the company can be chosen from a preapproved names` list, as well as the

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International Company Formations: Doing Business around the world company’s statutes can be chosen among different proposed statutes. “Where the company intends to adopt a designation which is not listed in the preapproved list, a certificate of admissibility is first required. Companies can be set up either by private document or by public deed (public deed is not mandatory). “To incorporate the company is necessary to: • Sign company statutes - the presence of all members or their legal representatives is required; they should bring their own identification documents (identity card or passport and Portuguese tax card) as well as the documents required to demonstrate their representation powers; • After the signature, a company’s identification card and the registration of the company at the corporation’s registrar department should be required; • The share capital must be deposited in a bank within five working days from the date of the incorporation; • The registration at the Social Security department is automatically done through the electronic transfer of data; • Statutory body members may ask for the exemption of payment of contributions, if they are already contributing for another activity or if they don`t receive any salary or compensation as a management director; • The registration at the tax office must be made within 15 days upon the commercial registration; • The company should also register at the Labour department and enter the appropriate labour accident insurance agreements. “Taking into account the procedures required and the time spent for the creation of a business, Portugal was ranked by the World Bank’s 2011 Paying Taxes Report at 59th place out of 183 economies for starting a business.” Does regulation in Portugal hinder or benefit business growth? What can your jurisdiction offer to prospective companies? Are there any tax benefits? “Simplified processes for the incorporation of companies or the registration of branches (as previously described) have been implemented. Support to entrepreneurs has been improved through the establishment of public institutes aimed for providing support to entrepreneurs and to newly created companies in the fields of business and economic strategy, financing and entrepreneurship support. “Additionally, Portugal provides for several tax incentives regarding certain investment projects, credit facilities to the creation of new businesses, tax benefits for the creation of jobs, for setting up of businesses in undeveloped areas as well as for the promotion of business internationalization. These tax benefits comprise tax deductions, tax credits as well as exemptions and tax rates reductions. A reduction of the employer’s social security contribution, which stands currently at 23.75%, is expected shortly. “Portuguese jurisdiction also provides for a very attractive tax regime for companies established within the Madeira (an Autonomous Region of Portugal) International Business Centre (MIBC). Such regime provides for significantly reduced corporate income tax rates for MIBC-based companies which perform operations with non Portuguese-entities. “The Portuguese tax law includes also a mechanism for the relief of

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taxation on profits derived from investments in Portuguese-speaking African countries (Angola, Cape Verde, Sao Tome e Principe, GuineaBissau and Mozambique), and Timor-Leste. “With a network of more than 50 double taxation treaties, more than 50 agreements on the mutual promotion and protection of investments, 16 agreements on exchange of information, protocols on mutual administrative assistance with Brazil, Cape Verde and Mozambique, and 20 Conventions on Social Security (one with the EU member States), Portuguese legislation benefits business growth.” How does ease of trading in Portugal compare to other countries? “According to official information provided by the World Bank’s Doing Business Report 2011, Portugal’s ease of doing business was ranked 31st out of 183 economies. Studies show that Portugal’s regulatory environment for business improved when compared with 5 years ago. “Although Portugal hasn’t been well positioned when it comes to getting credit (ranked 89 in 2011) there are still credit facilities available to new company projects benefiting the creation of new enterprises and the implementation on new investment projects. Financing incentives mainly cover innovative projects as well as research and development projects and projects aiming business internationalization. “Regarding the payment of taxes, in 2011, Portugal ranked 73 out of 183 economies. Portugal’s ranking position was assessed with reference to indicators such as the number of payments required per year, time spent per year in assessing and paying taxes, or the total tax burden on companies’ profits. “Portugal has signed Conventions for the Avoidance of Double Taxation (CDT) with more than 70 jurisdictions (67 of which currently in force) and Investment Promotion and Protection Agreements (IPPA) with more than 40 countries. The broadening of the Portuguese network of CDTs and IPPAs has been a major contribution for the growth of the Portuguese business sector as well as for the stimulation of foreign investment. Portugal has also signed Agreements for the Exchange of Information relating to Tax Matters with 16 jurisdictions, which are expected to enter into force soon. “Portugal has also signed 3 Protocols of Mutual Assistance in Administrative Matters which are expected to benefit and ease cross border trading growth.” What are the logistics of trading internationally and what support do you offer to your clients attempting to break into new markets? “Portuguese jurisdiction provides for a competitive incentive regulatory framework when it comes to trading across borders. Indicators such as the number of documents, time and costs required for import and export show that the Portuguese jurisdiction does not hinder the access to international markets. “As referred, financing and tax incentive are available to internalization projects, such as those comprising investments in acquiring or creating companies abroad, in marketing projects to be implemented in international markets and other projects that allow international expansion of Portuguese-based businesses.


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International Company Formations: Doing Business around the world “In supporting its clients towards the internalization and development to international markets, PwC provides tax advice to take advantage of innovative opportunities, minimise and manage global risks and develop tax efficient strategies for cross-border investments. 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? “Doing business in Portugal may become less easy and attractive during 2012. As Portugal is managing efforts towards financial and economic consolidation, certain measures are expected to be taken towards the reduction of budgetary deficit and State debt, leading to a sharp reduction of public expenditure as well as the improvement of public revenue. “Therefore, measures as taxes increases or reduction and limitation of tax benefits may be implemented thus discouraging and hindering the business growth as well as the creation of new enterprises. “Additionally, financing conditions are expected to become more restrictive during 2012 mainly due to the increase of the financing costs of the Portuguese banking system with European financing institutions. “Notwithstanding, the measures taken during 2010, 2011 and 2012, although negatively affecting, in the short run, economic growth and the conditions for doing business in Portugal, they are expected to create a framework for the long run sustainable economic growth, which is also expected to involve the improvement of the conditions for doing business in Portugal.”

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cquisition International speaks to Leendert Verschoor, is a Partner within the international tax department of PricewaterhouseCoopers & Associados- SROC, Lda in Lisbon (PwC) and is responsible for tax services rendered to investors in Cape Verde. Cape Verde has important historic, legal and cultural connections with Portugal and our staff in Cape Verde works closely with the colleagues in Portugal to provide a world-class professional service to our clients. Does regulation in your jurisdiction hinder or benefit business growth? What can your jurisdiction offer to prospective companies? Are there any tax benefits? “Cape Verde tax system provides several tax benefits for different areas of business/activity. We briefly describe below the most important tax benefits provided by Cape Verde.” 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. “In January 2011 Cape Verde completed the process of adhesion to the International Centre for Settlement of Investment Disputes (ICSID). Cape Verde’s ratification of the ICSID convention will contribute to improve the country’s business environment given the guarantees provided to external investors in terms of legal security in case of disputes between investors and the signatory countries. “In its Doing Business 2011 report, the World Bank also stresses the good initiatives taken by the administration concerning the measures required for registering property, starting a business and paying taxes, where Cape Verde ranked in 3rd, 10th, and 2nd position, respectively

from among the 183 countries assessed. Cape Verde was the 5th State at world level that made most progress between 2009 and 2010 in terms of ease of doing business. “Cape Verde is also a member of the African Union and the World Trade Organisation, and enjoys preferential access to relevant markets, namely to the USA (under the African Grow the Opportunity Act (AGOA) and the European Union (under the Cotonu Agreement). “Cape Verde has signed only one Convention for the Avoidance of Double Taxation which is with Portugal and “Cape Verde and Portugal agreed to peg the Cape Verdean Escudo to the Portuguese Escudo and, later on, transferred into the Euro, keeping the exchange rate fixed at 1 Euro = 110.265. This situation brought advantages in the commercial relationships with the EU, as well as in the foreign investment, granting a greater confidence to investors due to lack of foreign exchange fluctuation. “A very important factor for Cape Verde to assert its role as an entry door to Western Africa is its full regional integration, namely as part of the ECOWAS (the ECOWAS market comprises approximately 230 million people in its 15 member states) and the close links maintained within the scope of the Community of the Portuguese Speaking Countries (CPLP) with countries that are part of the regional communities in the West African Coast, namely Angola, São Tomé e Príncipe and Equatorial Guinea (members of the Economic Community of Central African States (ECCAS) and in the case of Equatorial Guinea, also a member of the Economic and Monetary Community of Central Africa(CEMAC). “Cape Verde financial sector, which has know increasing development in recent years is becoming more and more an important contributor to the development of Cape Verde its potential and opportunities. “In 2010 there were eight institutions authorised to operate in the on shore market(three more than in 2009 due to the entry of Banco Espírito Santo CaboVerde, Ecobank– Cabo Verdean Novo Banco) and nine in the off shore market. Internet banking is also offered by the Cape Verdean bank as part of their policy of implementing more and better means of distribution of financial products and services, which has led to a 20.2% increase in the number of transactions performed in ATMs and point of sale terminals between 2009 and 2010. Leendert Verschoor

leendert.verschoor @pt.pwc.com www.pwc.com T: 00351 213 599 000

Jaime Carvalho Esteves jaime.esteves@pt.pwc.com www.pwc.com/pt T: 00351 213 599 000 Rua Sousa Martins, 1, 2nd floor left. 1069-316 Lisbon, Portugal

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cquisition International speaks Gideon Koren & Co. a leading Israeli law firm, providing a wide range of legal services of the highest professional standards, based on the rich experience of it's attorneys about doing business in Israel.

the company's share capital, name change, etc. Most of the changes do not require any regulatory prior approval but an adequate notice certified by an attorney should be filed with the Registrar of Companies.

Gideon Koren & Co. offers its clients the benefit of its attorneys' abundant international experience, holding foreign licenses to practice law in the United States and in Europe.

“Following the company's formal formation, the company may now open a bank account (in order to do so, a company's shareholders or board resolution ordering for the opening of the account and nominating authorized signatories on behalf of the company is required).

“Our legal team is highly experienced in all aspects of commercial law, and provides its clients with legal guidance on every aspect of their operations, including establishing the entity (privately held company or other), negotiations on finance issues, option plans, shareholders agreements, commercial agreements involving the entity as well as share issuance on various platforms (TASE, NASDAQ).” Doing business in Israel “ Our experience has shown that Israel's common incorporation form when "doing business" in the holy-land is the Limited Liability Company, which provides its shareholders with various legal and tax benefits. The main benefits worthy of note are: • The separate personhood of the company which differentiates the shareholders from the duties and liabilities of the company. While piercing the corporate veil is possible, it requires a court decision which rarely and reluctantly so rule (the petitioner for piercing the corporate veil usually has to show a fraudulent incorporation or a fraudulent usage of the company's separate personhood in order to deceive its creditors). • Relative law taxation when compared to other Israeli forms of incorporation. Corporate Tax is currently 24% on the company's profits. Corporate Tax was expected to be reduced in the coming years up to 16%, however recent pressure on the government to reduce direct and indirect taxes on households and middle class may postpone or even halt Corporate Tax reduction.” Establishing a company in Israel “When establishing an Israeli privately held company, the promoter has to file company registration documents certified by an attorney to the Registrar of Companies (which operates under the Ministry of Justice) in Jerusalem. The most important incorporation document is the company's bylaws or articles of association.

“No fees are levied when opening a bank account, although bank commission rates may vary between banks and per the account features as well as the financial capability of the account holder. A further essential step and a pre-condition for doing business is that the company should also be registered with the regional VAT office (which operates under the Ministry of Finance). “Another important stage when starting a business in Israel is employment agreements with company's personnel. Although employment agreements may vary form one employee to another, a written notice of the employee's basic terms is mandatory by the Notice to Employee (Employment Terms) Law of 2002. The effect of regulation when doing business in Israel “Although the process of registering a private company may take a number of days, our experience has shown that it may take significant time to gain license or permit when the company's business is related to natural resources, banking or finances (such as commercial television or radio, insurance, pension funds or provident funds). Naturally, the strict regulation which covers such fields does not only determine the conditions and terms for the grant of license or franchise, but also controls the daily activity of the company and often requires a continuous guidance of an expert. “Needless to say that this short review does not cover all aspects of incorporation or other aspects of doing business in Israel (such as labour laws, contract law, regulation etc.), and it is highly recommended to consult with legal experts before actually starting operations.”

“The company's articles of association can be either in a short form (since much of the company's ongoing activity is regulated by The Companies Act, 1999), or – per the promoter's discretion - detailed to include terms which regulate special shareholders relations such as right of 1st refusal, BMBY clause, tag along, bring along and other important articles. Minimum share capital is not required. “It is worth mentioning that founders' or shareholders’ agreements are not compulsory but optional, and that a professional drafting by a corporate attorney of the company's articles of association may spare all or part of shareholders’ agreements. “Moreover, the shareholders of the company are entitled to alter the company organs' structure or its bylaws at any stage, for example due to an investment agreement, employees stock option plans, change in

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Gideon Koren main@gkl.co.il www.gkl.co.il T: +972-3-6005555

Guy Kedem Gideon Koren & Co.

12 Ben Gurion Rd., BSR Tower 1, 18th floor, Ramat-Gan 52573, Israel


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cquisition International speaks Sameh Mohamed Toban , president at Toban Law Firm, who has practical experience since 1988 in various legal matters (commercial, administrative, labor, arbitration, insurance, civil, intellectual property, banking and corporate) about in doing business in Saudi Arabia. “Our full service corporate practices include advice on the choice of an appropriate business entity among the various corporate, Joint Venture, branch, and partnership options. We advise on regulation of foreign investment in manufacturing, commerce, banking, real estate and securities in the Middle East. We assist our corporate clients in the formation, acquisition, financing and operation of corporations, partnerships, and licensing and the distributorship arrangements.” Doing Business in Saudi Arabia “The Saudi economy is maintaining its achievements in scoring high growth ratios in all sectors for the period from 2003 and continuing throughout 2011. The Supreme Economic Council had already undertaken the privatization of many vital economic sectors that augmented the role of the private sector in the local economy. The advanced banking services actively support economic growth by financing development projects. “The Saudi economy benefits from strong support from the government and free market policy, both of which have contributed to the growth of the economy. “The Supreme Economic Council continuously enhances comprehensive development through restructuring and applying economic reforms. It establishes new institutions, reorganizes some public sector organizations and issues new regulations that keep pace with current developments, at both local and international levels. “Utilization of oil revenues to expand and diversify economic activities in order to reduce dependence on oil has resulted in an increase in local economic capacity. It has also encouraged foreign investment, particularly after Saudi Arabia joined the World Trade Organization. The efforts in this direction also resulted in raising the Saudi credit classification and raised the economy's standing in all international reports.

conjunction with all governmental agencies and institutions to improve the investment environment. “Recently, many international companies have been licensed to invest in the Kingdom of Saudi Arabia. “Saudi Arabia has a vast number of competitive advantages in many strategic sectors at regional and global levels, which yield significantly higher returns on investment. Of course, it is no surprise that Saudi Arabia was ranked first with regards to prices of energy provided for investment projects. As such, Saudi Arabia continues to be a natural choice for investors in all energy intensive industries. “But the competitive advantages in today’s Saudi Arabia run much deeper than just energy. It’s about creating a world-class business environment that combines an ease of conducting business with low costs. It’s about unfettered access to regional markets and financial services. Above all, it’s about our country’s vision, and our shared commitment, to seeing your business thrive. “Financially speaking, investment in Saudi Arabia realizes high profit ratios for local, foreign and shared projects, with low risk exposures, and a simple form of taxes and property registration fees “Monetarily speaking, the Saudi Riyal is one of the most stable currencies in the world, and offers great competitive advantages in the region. There has been no significant change in its exchange value during the last 3 decades. There are no restrictions on foreign currency exchange and outgoing money transfers. Inflation rates in Saudi Arabia are very low and the Kingdom is endeavouring to sign bilateral agreements with an increasing number of countries regarding investment encouragement, protection and arrangement of taxation issues. “The Saudi Arabian economy is, by all accounts, booming. New diversified economic sectors have sprouted in the wake of government reforms. The future of Saudi Arabia indeed looks bright.”

“The local economy is based on the strong backbone of the world's largest oil reserve. The private sector is playing an increasing role in the Saudi economy. The private sector benefits from a free market environment and a competent labor force which together should ensure continuing economic growth. “The local economy is similarly expected to continue to grow at a substantial rate, especially as opportunities for foreign investment increase “World attention is increasingly being drawn to the unique investment opportunities in the Kingdom of Saudi Arabia. A variety of reasons has created this situation. Amongst the most significant is the huge effort expended by the Saudi government, encompassing economic reform, improvements designed to transform the investment environment and the opening up of more sectors to investment opportunities. These efforts have been streamlined through the Saudi Arabian General Investment Authority (SAGIA) which works in

Sameh Mohamed Toban president@tobanlawfirm.com www.tobanlawfirm.com T: +966(2)665 7013 P.O.Box 22393 Jeddah 21495 Saudi Arabia (22 Abdul Hamid Al Khatib Street, Al Hamra District, Jeddah, Saudi Arabia)

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Managing Transfer Pricing Risks in M&A Transactions

Managing Transfer Pricing Risks in M&A Transactions M

ergers and acquisitions raise a whole host of transfer pricing issues. In M&A transactions, the interaction between transfer pricing and purchase accounting can play a critical role in determining the allocation of the purchase price among the target company’s tangible and intangible assets. Transfer pricing can also play an important role in selecting the financing structure of the proposed transaction. M&A deals provide opportunities to harmonize existing transfer pricing policies. In developing consistency across the organization, a number of factors should be considered in determining which policies should be implemented. It is therefore of the upmost importance for such company’s to seek advice from leading experts to advise them on such aspects. Acquisition International speaks to the experts… PwC has a large transfer pricing team with several specialists with more than ten year’s experience in transfer pricing. This has

Merja Raunio merja.raunio@fi.pwc.com www.pwc.com/fi T: + 358 9 2280 1402 P.O. Box 1015, 00101 Helsinki, Finland

enabled the TP team to accrue wide experience both in transfer pricing planning and dispute resolution. PwC has a highly skilled M&A tax team and unique capabilities in tax issues of financial transactions and TP team works in close cooperation with these other tax specialists. The strength of PwC Global TP Network enables the Finnish TP Team to find effective solutions for both parties to the cross-border related party transaction. Merja Raunio is partner and transfer pricing specialist at PwC.

What constitutes arm's length prices in your jurisdiction? And what is the analysis process? Merja Raunio : “Arm’s length price is the price that two unrelated parties would agree on in comparable circumstances. This applies to both purely Finnish and cross border transactions. Traditionally the Finnish tax authorities have tried to find comparable unrelated party transactions to benchmark the price used in an intercompany transaction.

Transfer Pricing Associates is a leading independent specialist provider of global transfer pricing, valuation and customs services with coverage in over 30 countries. Hendrik Blankenstein is a global partner of Transfer Pricing Associates and is based in Switzerland. Previously, he was in-house HQ tax counsel for the Nestlé Group. In that capacity, he managed the tax and transfer pricing aspects of over 10 major acquisition and divestment projects throughout the entire deal process including the post-deal integration.

“In practise, when current day-to-day inter-company transactions are concerned the arm’s length prices are tested by using one of the OECD’s transfer pricing methods.

Mr. Hendrik Blankenstein T: +41 (0)44 715 12 30 h.blankenstein@tpa-global.com www.tpa-global.com Seestrasse 185, 8800 Thalwil, Schweiz

“For financial transactions the Comparable Uncontrolled Price Method (CUP) is the most common method. Internal comparables are preferred and bank loan may be used as comparables. In case no internal comparables exist, benchmark studies (search for comparable

Pascal Luquet pluquet@fidalinternational.com www.fidal.fr T: 33 1 55 68 15 22 Espace 21 – 32, Place ronde -92035 Paris La Défense Cedex, France.

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Managing Transfer Pricing Risks in M&A Transactions interest rate spreads from databases) should be acceptable. “For example in case of acquisitions between related parties, OECD defined one sided transfer pricing methods are often suitable (i.e. do not generate a reliable result). In this case general business valuation principles are applied. Internal comparables (i.e. when the company itself has been party to a comparable transaction) are preferred, but also external comparables may be used. “When applying one of the OECD Methods, the analysis process described in Chapter II of the OECD Guidelines is used.” What role does transfer pricing play in selecting the financing structure of a proposed merger or acquisition? Hendrik Blankenstein: “A sound funding structure is also relevant from a tax management perspective to ensure that the deal-related (intra-group) interest expenses can effectively be deducted against the taxable earnings of the target. In a recent tax audit case, Transfer Pricing Associates has been successfully defending the arm’s length nature of the companies intra-group funding. TPA did this through comparing the intra-group funding levels in the audited company with the (similar) funding levels agreed between two unrelated parties when funding an acquisition.” Merja Raunio : “Finland does not have specific thin capitalisation rules. The interest payments are fully deductible provided they fulfil the arm’s length criteria. When considering whether the financing transaction is at arm’s length, the tax authorities scrutinize both the capital of the loan and the interest rate, whereas other terms of the loans are seldom challenged. Especially if the arm’s length interest rate seems to be exceptionally high, the tax authorities may re-characterise shareholder loans as equity investments. “Since Finland does not have any limitations of the interest expense deductions and no withholding tax on interest income, Finnish intermediary holding companies with debt to creditors in

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low-tax jurisdictions are sometimes used to lower the effective tax rate. Transfer pricing, especially the arm’s length nature of the loan capital and interest rate play central roles. “ Post-acquisition, are there any transfer pricing issues that need to be addressed? Hendrik Blankenstein: “Companies will often review their approach to transfer pricing or at least align the transfer pricing policies of the acquirer and acquired target. A thorough understanding of the post deal business changes is important in order to develop these new transfer pricing policies. Transfer Pricing Associates recently supported various companies to develop their post deal transfer policies and prepared their transfer pricing documentation explaining the business case for change.” Merja Raunio : “Since transfer pricing policies are unique and tailored for each group’s needs, in practise, after an acquisition some integration of the transfer pricing policies has to be performed. For transfer pricing purposes this often means restructuring (i.e. transfer of functions, assets and/or risks from one related party to another related party). “An acquisition is a good opportunity to streamline the transfer pricing. Transfer pricing policies should be reviewed on a regular basis and an acquisition is a good opportunity to update also the transfer pricing policy of the purchasing entity. “Not harmonising the transfer pricing makes the transfer pricing policy more complicated and increases the transfer pricing risk. On the other hand careful transfer pricing planning decreases the tax risk and may also bring tax savings. “In case of interest deductions in the Finnish acquisition vehicle, the Finnish entities should show enough taxable income to be able to benefit from the interest deductions. This should be taken into account when considering the transfer pricing system. On the other hand, tax losses (due to the interest deductions) may enable

restructuring with inter-company taxable transactions without cash tax effect.” M&A deals are alive with Transfer Pricing implications; what issues have you come up against over the last 12 months and how have you overcome them? Please use examples to illustrate you answer. Merja Raunio : “Transfer pricing is one of the focus areas of tax audits. A coherent transfer pricing policy is an important tool for lowering the transfer pricing risk. In addition to drafting a transfer pricing policy it is important that the company actually follows the policy. We have seen cases where the company has an extensive transfer pricing policy and proper transfer pricing documentation in place but the transfer pricing policy is not followed and the prices have not resulted in the documented arm’s length range. We have for example helped our clients by reviewing their transfer pricing policies and transfer pricing documentations before the company submits the documents to the tax authorities. Transfer pricing adjustments are easiest to avoid if the tax authorities do not at all challenge the transfer pricing. “One issue that is regularly challenged buy the Finnish tax authorities are the interest payments on shareholder loans. “Transfer pricing issues need to be considered after the acquisition to integrate the acquired and existing businesses. However, sometimes transfer pricing during the acquisition may generate tax savings. Transfer pricing planning may be part of the structuring of the deal.” Hendrik Blankenstein: “The OECD currently reviews these complex intra-group transactions involving intangibles and is expected to provide more guidance. We expect that – as a result - tax authorities will scrutinize the tax consequences of these complex intra-group post deal restructurings (leading for example to tax audits focusing on the valuation of transferred business and intangibles). Transfer Pricing Associates therefore recommend companies to perform a transfer pricing valuation study to back up their tax position prior to entering into such intra-group transfers.”


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cquisition International speaks to Victor H. Miesel, the Practice Leader, Global Director and Chief Economist incharge of the Transfer Pricing and Economic Consulting practice at Experis Finance (A Manpower Group Company) based in New York City and with offices in most US, European and Asian cities. “Our practice specializes in providing an independent alternative to the transfer pricing services provided by big four accounting firms and law firms. A key feature to our service offering and client value proposition is the high experience level of our economist team coupled with a truly global footprint. Does the USA follow the OECD Transfer Pricing Guidelines? If not please explain what your jurisdiction does differently. “We adhere to the US Internal Revenue code Sections 482 and 6662, the arm’s length standard, and when appropriate the OECD Transfer Pricing Guidelines.” What constitutes arm's length prices in your jurisdiction? And what is the analysis process? “The US regulatory framework for determining arm’s length prices or profits is based on the “best method” concept. A “best method” is usually the method that is the most reliable. Arm’s length prices or profits may be determined using a variety of methods including the use of comparable company profit margins (“benchmarking”), market based prices or comparable third-party transactions.” What role does transfer pricing play in selecting the financing structure of a proposed merger or acquisition? “Transfer pricing may impact the financing structure of a proposed merger, but often is left to post merger integration, tax planning and compliance activities. These compliance activities range from purchase price allocation (“PPA”) analysis to multi-jurisdictional tax compliance and transfer pricing documentation. Valuation of intangibles and their location and ownership are also key issues that should be addressed pre-M&A” How do M&A deals harmonize existing transfer pricing policies? “M&A deals provide an opportunity to streamline, optimize the effective corporate tax rate, and harmonize existing transfer pricing policies. There are many examples of corporations that use M&A deals to more effectively manage their intellectual property ownership, and

Managing Transfer Pricing Risks in M&A Transactions optimize their effective corporate tax rate through international tax and transfer pricing strategies that make more efficient use of intangible asset ownership, lending arrangements, debt finance, risk management and efficient business functions. An M&A deal is often the best time to make use of a new corporate operating structure and focus on improving the overall corporate tax position.” Post-acquisition, are there any transfer pricing issues that need to be addressed? Post-acquisition there are several important transfer pricing issues that should be examined. These issues range from comparing relative tax positions pre and post acquisition to comparing the transfer pricing methods used by all M&A participants. PPA studies post-M&A deals are usually performed without appropriate transfer pricing support, documentation, consistency or accuracy. Post-M&A provide multinational enterprises with an important opportunity to reposition intangible assets and adjust transfer pricing policies to optimize tax rates and maximize shareholder value. M&A deals are alive with Transfer Pricing implications; what issues have you come up against over the last 12 months and how have you overcome them? “A recent post-M&A case involved due-diligence and on-going purchase price allocations (“PPA”) studies. The preliminary PPA studies performed by another firm had allocated insufficient intangible asset values to the non-US affiliates based on a faulty set of facts and insufficient transfer pricing support and analysis. The PPA was therefore faulty based on the assumptions. By redoing the transfer pricing analysis and employing a defensible transfer pricing methodology, we were able to provide the client with a more accurate PPA study, improve the firm’s long term tax position, and reduce tax exposure.” As we slowly recover from the economic downturn, do you have any predictions for the next 12 months, in terms of demand in your jurisdiction? “The US Internal Revenue Service has recently undergone an historic reorganization and has combined the IRS division of the APA with the general IRS transfer pricing specialty area. The goal of this reorganization is to increase the effectiveness of transfer pricing audits, and increase the IRS ability to collect tax revenue for the US Treasury Department. My forecast is for increased scrutiny, more aggressive transfer pricing audits, increased controversy and litigation.”

Victor H. Miesel victor.miesel@experis.com www.experis.com T: (203) 536-6598 99 Park Avenue, Penthouse, New York, NY 10016

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Adding value throughout the entire transaction cycle. URS/Scott Wilson approaches asset ownership and management with the entire lifecycle in mind. 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.

URSCORP.EU


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What’s in a name?

What’s in a name? M

any of the world’s most successful companies rely on their trade marks to make them visible in the marketplace. The best trade marks are instantly recognizable and conjure up in the minds of existing or potential customers things like quality, dependability, or at the very least the source of the goods or services on offer. Companies spend copious amounts of time and money developing trade marks and creating widespread demand; they are extremely valuable assets and they pose difficult valuation problems when buying and selling a business. Acquisition International speaks to Allan Poulter, partner at the Trade Mark and Brand Protection Group of Field Fisher Waterhouse LLP. “My particular area of expertise is in the clearance and protection of trade marks at an international level as well as dealing with contentious matters at trade mark registries around the world with particular emphasis on the Community trade mark system. “We have clients that are active in all sectors including financial, media, entertainment, sports, retail, financial services and life sciences.

“Field Fisher Waterhouse LLP offers a truly one-stop shop for brand owners with high levels of expertise in all aspects of trade mark protection, enforcement and exploitation. We act for some of the leading international brands.” What is the process of developing and registering a trade mark? “Alongside the creative aspect of developing a new brand, we undertake the crucial role of trade mark clearance to enable us to advise on any potential infringement risks associated with the launch of a new brand. In consultation with our client we will then devise and implement a filing strategy which enables the client to secure the broadest protection available for its brand and avoid or reduce any risks associated with the launch that were identified by the clearance searches conducted.” How does a company protect its brand from third party infringement? “We conduct watch services for many of our clients to ensure that we identify any third party applications to register a trade mark or incorporate a company under a name which conflicts with a client’s existing rights. On being made aware of any potential infringement,

we are able to represent our clients in all aspects of IP dispute resolution including oppositions, litigation, mediation and arbitration.” How is brand equity achieved and what methods do you use to determine its worth? “Brand equity is achieved through the commercial efforts of the client in providing high quality products and/or services. Our role in protecting its value lies in securing appropriate legal protection and taking necessary action to prevent the activities of third parties that may in any way take unfair advantage of or be detrimental to that value.” What does a trade mark adviser bring to the deal table? “An experienced trade mark advisor will not only ensure that the best possible legal protection available is secured but will also advise commercially on the scope and terms of the [proposed deal. Where appropriate, he will provide commercial advice and make suitable introductions to prospective partnering organisations in new territories for the client where the trade mark advisor has previous experience. This is particularly relevant in areas such as International franchise agreements where the selection of a suitable local partnering organisation is just as important as the securing of the legal protection.” As cross border deals increase and the world’s markets intermingle through online mediums, what are the major trade mark pitfalls that a company must address when implementing their trade mark across international boundaries? “The increase in cross border deals coupled with the explosion of Internet commercial activity has meant that most, if not all, trade mark issues have a multi-jurisdictional element. This makes it essential for any advisor to have a comprehensive understanding of international protection and relevant treaties to ensure that any strategy that is devised affords adequate protection and provides the legal basis for protection and exploitation beyond the national boundaries of the client’s initial interests.”

Allan Poulter allan.poulter@ffw.com www.ffw.com T: +44 2(0) 7 861 4231 35 Vine Street, London, EC3N 2AA

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Doing Business in the Isle of Man

Doing Business in the

Tina Rawlinson tina@cavendishtrust.com www.cavendishtrust.com T: 01624 679000 31-37 North Quay, Douglas, IM1 4LB, Isle of Man

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s described by the Isle of Man's Economic Development Minister Allan Bell MHK "the Isle of Man continues to be recognised across the world as a well-regulated high-quality financial centre offering innovative products and a wide range of business solutions”. Acquisition International speaks to Tina Rawlinson Director, Cavendish Trust Company Limited about how the region has actively diversified its economy to ensure continuing prosperity and growth and in spite of the global downturn, held onto its AAA credit rating. Cavendish Trust Company Limited was established in May 2006 and predominantly comprises the two professional client bases of the original trust company founders. As such, whilst Cavendish is a relatively new name, it has a long standing and significant world wide client base. Cavendish is a full service corporate and trust service provider. Due to the significant experience of its senior team, Cavendish is able to offer all forms of structuring entity and through its affiliated offices can facilitate establishment of structures in most respected jurisdictions in the world. What factors are attracting companies and wealthy individuals to the Isle of Man? What are the key benefits of locating here? “Individuals are attracted by the income tax cap plus the lack of any gains or inheritance taxes, the quality (and pace) of life and the associated personal security. The Island also has highly renowned schools.

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“The benefits are therefore the competitive personal tax position plus the zero corporate tax platform. In addition, businesses enjoy the association with a highly regarded jurisdiction, plus direct access to Government departments and ministers and to the financial regulators” What are the primary challenges facing clients in your jurisdiction today? How have you adapted your services to meet these needs? “The downturn in the economic environment has made many potential clients cautious which has reduced the volume of new business. “Cavendish has diversified into new, more niche, markets and has also increased its marketing efforts by various means.” What code of ethics do you adhere to and who regulates them? Has the region been under pressure to adhere to international regulation? “Cavendish is regulated by the Isle of Man Financial Supervision Commission and therefore adheres to the regulatory infrastructure of the Isle of Man FSC.”

“Cavendish believes in and delivers a traditional relationship based approach to trustee and fiduciary business, which is increasingly rare in this modern world but which is of utmost importance in a business based on trust. “Also, the senior team each has at least 15 years experience in the offshore area, which means Cavendish has expertise to provide comprehensive corporate and trust services.” What steps over recent years has the Isle of Man taken to actively diversify its economy to ensure continuing prosperity and growth in spite of the global downturn? “The Isle of Man has ensured it is a market leader in regulation which is necessary to keep it at the forefront of international jurisdictions. “The Isle of Man has also become a market leader and therefore the jurisdiction of choice for may niche services such as e-gaming, aircraft registrations, shipping registrations and space orbital filing slots.”

“70% of Cavendish Trust’s staff are professionally qualified and as such Cavendish also operates within the ethical codes applicable to those professional qualifications.”

The Isle of Man continues to be recognized across the world as a wellregulated high-quality financial centre offering innovative products and a wide range of business solutions. What factors have driven this?

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

“Recognition of the simple fact that secrecy is not the future for the offshore arena, put succinctly as ‘comply or die’.


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Employment Law issues in M&A Transactions

Piotr Rawski piotr.rawski@bakermckenzie.com www.bakernet.com T: +48224453100 Rondo ONZ 1 p. 28, 00-124 Warsaw Poland

Gilles Duquet duquet@gide.com Baudouin de Moucheron moucheron@gide.com Aurélien Boulanger boulanger@gide.com David Jonin jonin@gide.com Foulques de Rostolan rostolan@gide.com www.gide.com + 33 (0)1 40 75 60 00

Eric Bably ebcounsel@gmail.com T: +225 05306319 +225 20010121 Avenue Lamblin, Plateau, Abidjan. 01 BP 5176 Abidjan 01

dr. Zsolt Cselédi zsolt.cseledi@oppenheim.hu www.oppenheim.hu T: +36 1 486 22 00 H-1053 Budapest, Károlyi Mihály utca 12. Hungary.

Julian Hemming julian.hemming@osborneclarke.com www.osborneclarke.com +44 117 9173582

Eduardo Gómez de Enterría ege@sagardoy.com www.sagardoy.com T: (+34) 915429040 c/ Tutor, 27 28008 Madrid (España)

Oldham, Li & Nie nor of Hong Kong Christopher Hooley chooley@oln-law.com www.oln-law.com T: 85228680696

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mployment Law and HR issues are likely to arise in virtually all M&A transactions. The significance of such issues is likely to vary depending on the specifics of each deal and can often be somewhat complex particularly in crossborder transactions. It is important for prospective purchasers and vendors to address employment law considerations at the earliest opportunity in order to minimise further expense or delay further down the line. Acquisition International speaks to the experts… Piotr Rawski, Baker&McKenzie Krzyzowski i Wspolnicy sp. K is Principal (B&M’s terminology for International Partner) specializing in employment and transactional aspects of mergers and acquisitions. Gide Loyrette Nouel was historically the first international law firm to structure a strong employment law capacity based in France. Gilles Duquet, Baudouin de Moucheron, Aurélien Boulanger, David Jonin and Foulques de Rostolan are all partners at Gide Loyrette Nouel.

Katja van KranenburgHanspians katja.vankranenburg@cms-dsb.com www.cms-dsb.com T +31 20 3016 402

Maître Eric Bably is Member of the Bar of Cote d’Ivoire, Consultants for ÆQUIS Legal, and an independent business law private practice in Côte d’Ivoire. Oldham, Li & Nie (OLN) is a leading Hong Kong business law firm. OLN was voted the 2011 International Law Firm of the Year in the Chambers Asia Awards and has been recommended by Chambers Global and also by Legal 500 Asia Pacific. OLN has a dedicated Employment Practice Group. Chris Hooley is the Head of that Practice Group and the Head of OLN’s Corporate Commercial and China Practice Groups. Oppenheim Law Firm.provide comprehensive legal support in the creation and termination of employment relationships, the preparation and maintenance of, collective bargaining agreements and the treatment of issues relating to collective labour law. Dr. Zsolt Cselédi, Partner, head of labour law practice group, member of the management board Oppenheim Law Firm. Osborne Clarke specialise in all aspects of employment law and labour relations including international mergers and acquisitions and business transfers, strategic advice to the Board and day-to-day advice to

Amstelplein 8A, 1096 BC Amsterdam, The Netherlands

Tom Johansson tom.johansson@hamilton.se www.hamilton.se T: +46 8 505 501 00 Hamilton Advokatbyrå Hamngatan 27, Box 715 SE-101 33 Stockholm, Sweden

Linda Widyati linda_wid@soemath.com Robert Reid robert_reid@soemath.com www.soemath.com T: +62 21 574 0088 Wisma GKBI, Level 9 Jl. Jendral Sudirman No. 28 Jakarta 10210 - Indonesia

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HR teams. Julian Hemming is Employment Law partner at Osborne Clarke who specialises in M&A work. Sagardoy Abogados is Spain’s leading firm in employment, Social Security, employee benefits and pensions law. Born 1980, founded by the Professor of Employment Law Juan Antonio Sagardoy, the firm has been engaged continuously in advising businesses on employment matters, and its lawyers work exclusively in this area. It is regarded as the leading firm in its field, recommended by the prestigious directories: Legal 500, Chambers and Partners, Who is Who Legal, and Employees’ Benefits Handbook. Eduardo Gómez de Enterría is partner and Restructuring and Collective agreement department Director at Sagardoy Abogados. Soemadipradja & Taher specialises in the full range of employment law areas, including advisory work on all aspects of employment, termination and secondment/outsourcing arrangements, drafting of all employment-related documents, including employment contracts, company regulations and codes of conduct, and representation in the settlement of industrial disputes. Linda Widyati, is partner at Soemadipradja & Taher and Robert Reid is foreign counsel with Soemadipradja & Taher. What is your role in M&A transactions? Maître Eric Bably: “In M&A due diligence my role is to give a technical support to the team. We can start by a legal audit on the entity which will be acquired, this, in order to outline any risks pertaining to the transaction. This legal audit covers Corporate, Contracts and Labour Matters. We can also give preliminary advice on the transaction to our clients. “Further to the preliminary advice or/and the legal audit we proceed to the preparation of the closing documents (Review of the Corporate documents and sometimes search at the Court registry in order to collect any useful information on the status of the company targeted, SPA, Draft minutes of the GM,)” These legal services are provided by means of the preparation of reports and opinions on the matters which our clients raise with us, or by appearing in court. Also, where required by a client due to the nature of the matter, we are very actively involved at the negotiating table to achieve collective agreements or workforce restructuring. Lastly, the firm has a daily information service so that clients are aware promptly of successive changes in legislation and case-law in the field of employment. Please give a brief synopsis of the firm’s employment law history. Chris Hooley: "The development of OLN’s Employment Practice Group has reflected our clients’ changing business needs. As a business law firm, we pride ourselves on having the ability to identify and protect each client’s particular commercial needs. Those needs have recently seen multinational clients in Europe, North America and

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Pacific Asia on the acquisition trail, needing to ensure that “key” employees of a target company are “locked in” and asking how enforceable post termination restrictions are, not only in Hong Kong but also on a cross border basis in China. Clients will always want to know the legal and the practical solutions for the protection of these human “assets”.” What areas of employment law do you (and your team) specialise in? Gilles Duquet, Baudouin de Moucheron : “The Employment Law department at Gide Loyrette Nouel offers outstanding expertise and social security-law related matters, including aspects of employment law in national and international mergers and acquisitions and restructurings, assisting and representing companies on individual and collective employment law litigations, drafting collective agreements for both employment law and social security matters, introducing international policies for employees and management, introducing and modifying employee savings schemes and pension savings schemes, etc.” Maître Eric Bably: “Taking in account the small size of the employment law market in the francophone sub-Saharan Africa, we do not specialize in a particular aspect of employment law; we handle various employment law aspects.” What are some of the typical Employment Law/HR issues which can arise in M&A deals? Piotr Rawski: “Proper and thorough due diligence is a key factor enabling our clients to foresee, calculate or mitigate the employment related transactional risk. Number of issues that may arise is countless. One of the underestimated fields are litigations of a small value, very often overlooked due to the materiality thresholds established by a prospective buyer. Even though Poland does not have a precedential system, lost case may cause a snow ball effect.” David Jonin: “Typical employment law/HR issues which can arise in M&A deals include transfer of individual agreements and benefits (as the case may be in application of the European Acquired Rights Directive and the corresponding national legislation), transfer of collective agreements and benefits, and transfer of staff representation offices or mandates. Other issues relate to the mandatory consultation of the staff representation bodies (including the works council), which must be completed upstream. Finally, M&A deals that include restructuring aspects require specific attention, notably when they involve collective redundancies.” Maître Eric Bably: “The francophone Africa legal systems are at variance with common law system on the comprehension of parties’ autonomy in employment contracts. Not only the laws but also the Courts are extra protective with regards to the employees. The Labour codes in these regions prohibit the termination of employment contracts of employees by the new acquirer on the sole ground of the change of employer arising from the acquisition. To anticipate such issues, we advise to prepare collective redundancies before the acquisition. Post-closing collective redundancies are regarded as a violation of the above prohibition. “Also, some acquirers have a concern on the question whether their Group internal policy is directly applicable upon acquisition of a company. In this regard, we usually make review of the internal policy


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in accordance with the local laws. Internal policy in most of Francophone Africa countries are subject to the control of the Labour Authority.” Dr. Zsolt Cselédi : “Employment law and HR issues are dealt with special care and attention in the M&A deals we handle from the very early stages of transaction planning, throughout the due diligence phase and in the actual implementation of the successful transaction. “According to our experience, the two most typical labour law issues that arise in relation to Hungary-related transactions are the continuity of the employment relationships in case of asset deals and the dismissal or reinforcement of the management in order to secure the continuity of the day-to-day operation of the undertaking concerned. “In addition, in the context of mergers, restructuring, work force reduction issues and harmonizing the respective employment benefit programs are also of major importance. “Finally, management bargains (including incentive programs and management liability issues) are also an important part of the relevant labour issues in M&A transactions. Julian Hemming: “Balancing the need to keep the deal confidential and the legal requirement to inform and consult with representatives of affected employees in relation to the proposed sale of a business.” Eduardo Gómez de Enterría : “Problems of restructuring and needs of unification and modification of labor conditions and collective agreements.” Linda Widyati: “In a typical merger or acquisition of shares in a company that involves a change of ownership, the Employment Law provides employees of target companies with the right to resign and seek severance packages. This process needs to be closely managed and may require careful socialization with the employees in order to minimise potential disruption to the company’s business. A more lengthy and careful process involving the industrial relations court may need to be conducted for those M&A deals that involve termination of employment.” “In a transaction involving the acquisition of assets of a company, where employees are

intended to be ‘transferred’ to the acquiring company, careful planning and structuring are also required because Indonesian employers have no legal right to transfer employees, even within a group of companies. In such circumstances, the employer will need to reach an agreement with the transferring employees and the acquiring company which could expose the employer to liability for payment of termination and severance packages. Potentially, such liability can be mitigated with the right approach and skillful negotiations.” How can you and your team assist prospective acquirers in overcoming Employment Law issues through each stage of a transaction? Piotr Rawski: “We start from proper due diligence, identify and report to the client on materialized or potential issues, quantify the risk and offer solution. In a nutshell - we shaper the client through the legal jungle” Aurélien Boulanger : « Our team's experience and availability allow us to efficiently assist our clients through each stage of a transaction. Moreover, our ability to provide counsels but also to represent employers in front of all jurisdictions in the event of litigation allows our clients to rely on the same lawyers for all employment aspects of a transaction. We build on trust. “Finally, lawyers in the Employment Law department liaise with experts in the other practice areas at Gide Loyrette Nouel on matters concerning tax, corporate law, intellectual property, and insurance law. Lawyers based in Gide Loyrette Nouel's international offices also deal with employment law and social security lawrelated matters in the countries where they are present.” Chris Hooley: “We can only help clients by first understanding their ultimate business goals. We then try to incorporate all relevant legal and practical solutions into the deal documentation. “OLN’s Employment Practice Group strategises with clients to decide on risk averse strategies, and then implements these in the due diligence process, in the negotiations, in the drafting of the deal documents and in dealing with the relevant practical situations of the overall deal. “In the pre contract due diligence, it is

essential to ensure that the employment contracts of key employees or independent consultants contain all necessary provisions to ensure continuous tenure and that there are clear and enforceable post termination restrictions.” Dr. Zsolt Cselédi: “Our aim is to assist our client from the “birth” of the transaction until its successful closing (including any post-closing measures). “Our philosophy therefore is to provide holistic legal advice, i.e. advice based on an understanding of the entire business transaction and its wider implications. We believe that this enables us to provide precise, to-the-point and clear advice in relation to any issues that arise on the basis of a sound legal analysis. “As a result of this holistic approach, we have been able to identify employment law related legal risks at a sufficiently early stage of the transaction, which enabled us– in close cooperation with our clients - to develop solutions to prevent (and in some cases significantly mitigate) such legal risks. “In particular, based on the detailed information gained from the due diligence exercise in a transaction, our practice group was able to set up various alternative solutions in order to handle the complex legal succession, reorganisation and labour law litigation issues that arose. We thereby provided our client with a map of the legal options available in relation to the conclusion and the implementation of the transaction.” Julian Hemming: “At the outset we will identify with the acquirer what the implications of the deal are taking account of the value and importance of employment law issues to the deal as a whole. This will include looking at pensions law issues such as the size of any pension deficit in the target's pension scheme; the implications of a high level of staff turnover (which can often suggest a high level of employment claims) and the implications of the target using a large number of agency staff who may gain rights from 1 October 2011 under the Agency Worker Regulations 2010. “We can also advise on the implications of the European Acquired Rights Directive as enacted across the EU in respect of business transfers. For example, advising on collective information and consultation issues with European Works Councils and national

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unions. A failure to do this right can give rise to significant liabilities running into £ millions. “Through due diligence we can highlight key liabilities and issues that need to be addressed on or before completion or post-completion such as introducing more robust restrictive covenants into employment contracts which can be enforced against employees. “We take a pragmatic approach to agreeing warranties and indemnities to meet the practical requirements of the client against the legal back ground. “Following completion we can work with the acquirer to maximise the integration of the acquired business and to minimise exposure by helping with employee relations and communications; implementing any loyalty bonuses and dealing with liabilities.” Eduardo Gómez de Enterría “We can help with the design of broad proceedings and concrete assessment of each one of them including the drafting of strategic and social plans and the solution measures. We also attend meetings with the company management to define the final project and aid with the appraisal of the cost if the measures. “We write and assist in the configuration of the memo-report and the remaining documents for the administrative resolution and have contacts with the Labour Authority, the central and regional administration, and with the unions. “We negotiate with the employees’ representatives, drafting of minutes of the meeting and documents during the whole process. We also process the documents and negotiation with the Labour Authority including during the decision phase.” Linda Widyati: “We would usually commence by advising prospective acquirers on potential issues that may arise under the Employment Law and then assisting them in the negotiation and preparation of sale and purchase agreements, which would also deal with these issues. Coordination with the seller and the target company would also be critical to structuring the relevant strategy, process and documentation to deal with the issues in accordance with the circumstances of the particular acquisition.” What are the firm’s goals for 2011? Piotr Rawski : “Baker McKenzie is developing rapidly world wide. Warsaw office is well established and is growing staidly. We will continue to pay close attention to those areas where market believes we are in top, but will pay highest attention to those were we come second. Eduardo Gómez de Enterría : “We expect to continue on our line of excellence in the specialize employment law services for the most important companies all over Europe.” Linda Widyati: “To maintain its position as a leading Indonesian law firm with an experienced team of lawyers who provide international standard services.” Do you have any predictions for the next 12 months? Piotr Rawski : “Depending on whether Poland is going to be

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impacted by the world’s crisis, we will either continue to assist in the acquisitions or disposals, or we will be busy with mergers and restructurings aimed in cost cutting ergo reductions in force.” dr. Zsolt Cselédi: “We expect fierce competition in the legal market with a shrinking amount of M&A transactions. As stated above, we strongly believe that only firms providing focused, clear and innovative legal solutions may prosper in such a competitive environment. “ “At the same time, due to the general economic crisis and possible collective redundancy cases, we expect to get more involved in litigious matters as well. “Finally, we believe that in 2011 social security matters and data protection matters are also in the focus of the companies (in particular due to the overhaul of the Hungarian data protection legislation, including the introduction of a new data protection office having the power to levy sanctions on companies not complying with the applicable legislation).” Eduardo Gómez de Enterría : “We except a difficult year for all the companies and individuals, and assume the necessity of important law changes. Linda Widyati: “We predict that M&A activity in Indonesia will continue to see significant growth, particularly in the natural resources and financial services sectors.”

CASE STUDY

Lee and Li is the biggest law firm in Taiwan and is recognized as one of the best local law firms in labour law practice area. T. C. Chiang, partner and head of Labour Law Practice Group of Lee and LiLee and Li, Attorneys-at-Law. “We advise both local and international enterprise clients on a wide range of labour issues for a long time. We frequently represent clients in negotiations, mediation and litigation with employees and unions”

The firm specialises in Labour Disputes, employment contract and work rules, redundancy, dismissal and employee transfer, union issues and sexual harassment issues What are some of the typical Employment Law/HR issues which can arise in M&A deals? T. C. Chiang: “Employee retention, employee transfer, change of employment terms, transfer of pension reserve, separation of employee welfare fund, laying-off employees, etc.

How can you and your team assist prospective acquirers in overcoming Employment Law issues through each stage of a transaction?

T. C. Chiang: “We usually first discuss with the prospective acquirer about their goal toward the employees of the acquireand then form a plan to achieve the goal. We will also advise the acquirer the possible issues of change of employment terms, transfer of pension reserve, separation of employee welfare fund and how to lay off the employees, if necessary.” T. C. Chiang tcchiang@leeandli.com www.leeandli.com 7F, 201 Tun Hua N. Road, Taipei, Taiwan 10508, R. O. C. 886-2-27153300 ext. 2397


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ittmar & Indrenius' Employment & Pensions practice is the leading employment practice in Finland covering all aspects of employment and pensions law. Our work covers mergers & acquisitions; day-to-day employment advice; company reorganizations; employment disputes; and outsourcing. Acquisition International speaks to Petteri Uoti, partner at Dittmar & Indrenius about employment issues in M&A transcations. Dittmar & Indrenius, established in 1899, is an independent Finnish law firm focused on the quality of our services within four practice areas: Mergers & Acquisitions, Finance & Capital Markets, Dispute Resolution and Corporate & Commercial. Our aim is to provide the best legal services in complicated transactions and complex dispute resolution in our jurisdiction. We also strive to be the best long-term law firm partner in Finland for demanding corporate clients. Petteri Uoti commented: “We design share, bonus and incentive schemes for personnel and management and provide advice on employers' pension obligations. We also design pension arrangements and schemes. One important area of our employment advice relates to domestic and EU employment legislative compliance and regulatory requirements. “Company reorganizations cover reorganization and downsizing of personnel, personnel consultation requirements, rehiring obligations and severance packages.

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Employment Law issues in M&A Transactions “Employment disputes cover litigation and arbitration including individual and collective dismissal disputes, industrial safety disputes, discrimination disputes and management liability disputes, enforcement of confidentiality obligations and posttermination restrictive covenants. “When it comes to Mergers & Acquisitions and Outsourcing we perform of HR legal due diligence and draft and negotiate business transfers, share purchase and outsourcing agreements. We also advise on transferor's and transferee's responsibilities, post transactional integration and acquired rights issues. Our day-to-day advice covers, inter alia, recruitment, termination of employment, terms of employment, employment and director agreements as well as drafting other employment related documents, collective labour agreements an d company policies.” What are some of the typical Employment Law/HR issues which can arise in M&A deals? “Some of the typical employment law issues arising in connection with M&A transactions in Finland would include harmonising the terms and conditions of employment after the transaction, workforce reductions either before or after the transaction and the position of the top management of the target company. “Also whether the transaction constitutes a labour law transfer of business under the

ARD rules and, if so, which employees transfer (especially in connection with outsourcing deals)” How can you and your team assist prospective acquirers in overcoming Employment Law issues through each stage of a transaction? “We assist our clients in determining the scope of the target business and the form of the transaction. We also analyse the target business and the risks relating to it, whilst drafting and negotiating the share / asset purchase agreement and other documentation relating to the transaction.” “Post acquisition Dittmar & Indrenius can also integrate the target business, coupled with determining and harmonising the terms and conditions of employment (before or) after the transaction. We also adapt the quantity and quality of the workforce to the business (before or) after the transaction.” What are the firm’s goals for 2011? “We aim at further strengthening our expertise and position in the international and domestic market.” Do you have any predictions for the next 12 months? “The uncertainty of the present economic situation makes is difficult to forecast the future. Though the demand for both M&A and restructuring related labour law advice is increasing, the following few months will show us the direction.”

Mr. Petteri Uoti petteri.uoti@dittmar.fi Mr. Seppo Havia seppo.havia@dittmar.fi www.dittmar.fi T: +358 9 681 700 Pohjoisesplanadi 25 A, FI-00100 Helsinki, Finland

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Sustainable Finance in the Netherlands

Sustainable Finance in the Netherlands

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anking and finance play a fundamental role in commerce, industry, public policy and economic performance; however, those working in the financial sector are largely unaware of the rationale and pressures for sustainable development. The Netherlands is one of the best places to find asset managers, banks and financial services companies expert in sustainably focussed finance and investments. The region has a strong reputation for responsible investment, providing finance for clean tech, carbon trading and other sustainable projects and due to its central European location and excellent infrastructure, many international businesses choose to locate here. Long term environmental, socioeconomic and governance challenges can materially affect a company's ability to sustain profitability and deliver returns so there is a pressing need for sustainability risks and opportunities to be factored into business decision-making. The Netherlands is in a very powerful position to positively influence sustainable business practices around the world and institutions that proactively manage environmental risk enhance their image and are more likely to attract funding on the international market. Acquisition International speaks to the experts… “The Global Reporting Initiative (GRI) is a network-based organization that produces a comprehensive sustainability reporting framework that is widely used around the world. GRI’s core goals include the mainstreaming of disclosure on environmental, social and governance (ESG) performance. Marjolein Baghuis, Director Communications & Network Relations, Global Reporting Initiative

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“Over 80 percent of the largest 250 companies in the world disclose publicly on their sustainability performance, and 77 percent of those companies use the GRI Framework, and its Reporting Guidelines, to structure their report . At the national level, disclosure levels are generally much lower. But in the Netherlands, over 60 percent of companies listed on the Amsterdam Stock Exchange published a sustainability report for 2010, with 85 percent of them using the GRI Guidelines . “Increasingly, sustainability strategy and performance are considered in investment decisions. There are now over 850 signatories to the UN Principles of Responsible Investment (UNPRI). These signatories represent a total of USD 25 trillion in AUM. UNPRI aims to expand the adoption of ‘responsible’ investment by establishing guidelines for integrating ESG issues into strategy and investment decisions. Dutch asset owners are well represented within UNPRI, with EUR 130.1 billion in SRI assets and 21 PRI signatories. “As good as these figures may seem, sustainability reporting is far from mainstream, limiting investors’ ability to fully assess the future potential of a company. GRI is committed to the Framework’s continuous improvement and application worldwide. At this point, GRI is developing the next generation of the Guidelines with the underlying objective to make sustainability reporting more mainstream. Until the end of November, the first public comment period for the new Guidelines is open and you are welcome to contribute. For more information, please visitwww.globalreporting.org/CurrentPrior ities/G4Developments/. “

info@globalreporting.org www.globalreporting.org


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cquisition International speaks to Albert Fischer, Managing Director of Yellow&Blue, an independent venture capital firm which specialises in developmentstage clean energy investments about sustainable finance in the Netherlands.

Yellow & Blue was founded in 2008 by Nuon, a leading European energy company and member of the Vattenfall Group. It is based in Utrecht, the Netherlands. “We invest in companies in three main areas: renewable energy (solar, wind, biomass and hydropower), energy efficiency (smart grids, energy storage, energy and buildings) and clean fossil energy (fuel cells, co-generation, hybrid systems). We will typically make investments of between €0.5 million and €4 million. “Our main strength is our team. We are able to attract high calibre personnel and our team is made up of senior people with backgrounds in energy, engineering and investment banking. They understand what makes a company profitable and efficient and can introduce our companies to the decision makers the need to reach. Their knowledge and expertise is our biggest asset, and is the most important benefit that we can offer our portfolio companies. As a small team with a selective portfolio, we’re able to work very closely with our investee companies, providing them with all the assistance that they need to build their businesses. “Our investment philosophy is simple: “faster, better, cheaper, cleaner”. All of our investee companies reflect these principles. This means that their technologies provide an alternative that not only replaces the incumbent but supersedes it, both in terms of economy and efficiency and in terms of environmental impact.

Albert Fischer yandb@yellowandblue.nl www.yellowandblue.nl T: +31 (88) 0102 400 Energy Building Kernkade 10 3542 CH Utrecht, The Netherlands “For us, sustainable investment as a concept is fundamentally about making great returns on companies with an environmentally sound product that delivers a compelling business proposition to its customers; we simply narrow the field to focus on companies that develop and produce technologies that are environmentally, socially and economically sound and fully sustainable. “Generally, customers will not adopt a green company’s product just because their products are green; they also need to be better value for money. Green companies that can say that they are faster, better, cheaper, cleaner present a very strong case for investment. They are also less prone to taxes that are levied on less sustainable businesses such as greenhouse gas emission credits for energy companies, or extra costs for handling industrial waste. In the longterm, a cleaner, leaner product with superior performance can gain a better market position than a traditional product. “Efficient use of resources leads to lower material costs for manufacturing companies. As an example, waste farming co-products such as manure and organic waste can be fermented into biogas which can subsequently be used in power generation. The electricity produced can be partially utilized by the company itself; the rest can be sold as renewable electricity to utility companies. The heat can be used for the fermentation process and excess heat can be used for space heating. Meanwhile, the fermented manure can be spread on land or further processed into fertilizers. “The banks and the pension industry in the Netherlands have a great deal of experience with sustainability. They have developed sustainable business models, and are at the forefront of the development of global guidelines for financial sustainability.

The process “As part of our due diligence process, we conduct a structured risk assessment and the results from this form part of our final investment decision. After investment, we monitor the changes in risk continuously via a risk register and monthly KPIs. This benefits the company, as our monitoring procedures are broader than the usual [technical development process]. For instance, we include business development parameters and financial KPIs but also softer parameters such as [absence rate]. “We represent shareholders’ interests in two ways, through our position as a shareholder in a company, and as a Board Director. As a shareholder in a venture we have a fiduciary duty to represent our own shareholders’ interests and also a duty not to act against the interests of other shareholders. However, as a Board Director we have the duty to represent the interests of all stakeholders in a company, not just the shareholder. This last point is particularly relevant for continental investments; the UK law is different. Appetite for sustainable finance “Sustainability as a theme, has gained widespread interest. Among corporations it has become part of their license to operate and having a ‘green’ brand gives a company a better market position. Companies now recognize the benefits of sustainable behaviour as this can reduce costs, increase market share and produce a better-motivated and more productive workforce. In the long-run, I expect that companies which choose not to operate sustainably will lose out; either because they have lost their market position; because consumers refuse to purchase their products; or because legislation has put an end to their business.”

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The Life Science Litigator The Life Science Litigator

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ike many sectors, it’s an extremely challenging time for life sciences; from the increasing regulation to the pressure facing pharmaceutical, biotechnology and medical device companies to manage costs in order to both make a profit and remain competitive. What’s more, in our increasingly global economy, life science companies that operate across international boundaries are increasingly subject to complex multijurisdictional patent litigation. There are few industries in which patents play as important a role as they do in the life sciences sector and despite a company’s best efforts or intentions, sometimes disputes simply cannot be avoided. When they do, it is absolutely crucial to have access to the best legal advice available to solve strategic problems and resolve the most contentious of disputes. Acquisition Internationals speaks to the experts. Dierks+Bohle is specialized in advising national and international clients in the healthcare and life sciences. The firm particularly represent manufacturers and distribution companies of drugs and medical devices in product liability matters, competition law as well as anti-kickback or physician self-referral law. Dr. Ben Backmann is partner in the Berlin based health care and life science law firm Dierks+Bohle. Biolato Longo Ridola & Mori Studio Legale Associato was established on the 1st January 1985 as a result of a split of former Studio Avv. Ercole Graziadei one of the first law firms in Italy organized to assist foreign

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clients. Linda Longo is a lawyer partner at Biolato Longo Ridola & Mori Studio Legale Associato and has been working in the life science sector since her joining the firm in 1985 assisting pharmaceutical industries and medical devices companies in respect to regulatory , compliance and competition legal issues. What gives you an advantage over local and global competitors in your areas of expertise? Dr. Ben Backmann: “With 25 lawyers concentrated in one office we are capable to cover all legal aspects of our health care and life science clients. We are providing a longtested network with partner law firms all over the world which enables us to represent our clients on an international basis. As we are working in a highly regulated field our proximity to politics in Berlin is of particular advantage.” Linda Longo: “It is a very specialised sector and experience and knowledge of the specific rules is very important to provide timely and cost effective advice.“ Who is a typical client? Dr. Ben Backmann: “We represent all kinds of health care providers but especially leading pharmaceutical companies and medical device manufacturers with a focus on biomedical technology and endoprosthetics.” Linda Longo : “Italian subsidiary of a multinational pharmaceutical group -; US and UK law firms specialised in the life science sector.“

What are the most common types of life science disputes leading to litigation? Dr. Ben Backmann: “The health care business is a competitive market that requires product innovations and intelligent marketing structures which in turn provoke unfair competition disputes and increases the risk of product liability.” Linda Longo : “In Italy mainly disputes before the Administrative Courts to challenge decisions of the Regulatory Authority in respect to pricing, marketing authorisation of medicinal products as well as disputes concerning public tenders for supply of products to Public Hospitals and Health structures.“ What steps can be taken to avoid life science disputes in the first place? Dr. Ben Backmann: “We place particular emphasis on effective risk management as key to reducing exposure to civil and criminal liabilities. ADRs like mediation are still on the development path in Germany.” Linda Longo : “Considering the nature of the litigations ( mainly to obtain fair, appropriate and timely decisions by the Regulatory authority of by the local governments) the clients decide to start litigation only in very extreme situations when all the other remedies are not successful.“ Why do patents play such a key role in the life science industry? Linda Longo : “Because only with a full and adequately long patent protection


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The Life Science Litigator industry can recover the cost of the research and clinical trials necessary to develop the product.“ How do you formulate a multijurisdictional patent litigation strategy? What methods do you use? Linda Longo : “Since ordinary litigation in Italy may take an outrageous length of time , including patent litigation, the legal actions which can be taken to obtain an effective result are the request of urgency measures or recognition of a foreign judgment to be enforced in Italy. Can you please highlight the key challenges in coordinating multijurisdictional product liability litigation? Dr. Ben Backmann: “To coordinate successful multijurisdictional product liability litigations you need to understand all technical and scientific aspects of the products as well as the commercial concerns of your client. The sued company needs to speak with one voice worldwide while the legal specifics of each country and each single case need to be respected.” Can you please highlight the key challenges in coordinating litigation regarding public tenders? Linda Longo : “Supply of medicinal

products to Italian Health structure is mainly subject to the public procurement rules. Several litigations regard the criteria for the classification of “equivalent” medicinal products and are aimed to avoid that innovative and more costly products are compared to less recent medicinal products. Timing to take legal actions before the Administrative Court against irregularities of the tender process is very strict : the client acting as claimant or as the defendant must receive prompt assistance in order successfully take legal action or defend his position.“ What makes you the right life science litigator? How do you ensure satisfaction for your clients? Dr. Ben Backmann: “Through a long international experience of advising and representing clients in cross-border product liability and competition law disputes and a highly focused team of regulatory experts, we are positioned to credibly articulate and advocate our interpretation of the applicable regulations as they relate to these matters.” How do you ensure satisfaction for your clients? Linda Longo : “Providing cost effective and timely advice and assisting in analysing possible violations of the rules including EU Directives.”

Linda Longo linda.longo@blrm.it www.blrm.it T:+3906 3233001 51, Via del babuino, 00187 Rome, Italy

Dr. Ben Backmann backmann@db-law.de www.db-law.de T: 0049 30 327787-0 Dierks+Bohle Rechtsanwälte Walter-Benjamin-Platz 6 10629 Berlin, Deutschland

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Global Patterns of Project Finance

Global Patterns of Terry Newendorp contacttdj@taylor-dejongh.com www.taylor-dejongh.com DC: 1-202-775-0899 London: 44-207-233-4000 Paris: 33-1-56-79-80-20

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lobal project finance volume reached $179.0 billion in 1H 2011; this may be down 4% on the $186.8 billion recorded during the same period in 2010, but considering that was an all-time high, is this news really so bad for the industry? Increasingly, project financing is emerging as the preferred alternative to conventional methods of financing infrastructure and other large-scale projects worldwide. With many firms adding numbers to their project finance teams and countries such as Japan and India seeing massive growth rates, the project finance market might be more robust than it’s given credit for. As other sources of borrowing have dried up, project finance is generally still available - even if the projects are slightly less risky and the financiers more cautious! The overriding opinion amongst developers and financiers is that the effects of the economic downturn have not been as severe as first thought. There’s no doubt that times are leaner and all parties are going to substantial efforts to ensure the elimination or reduction of risk, but isn’t this re-alignment going on everywhere and frankly more sustainable? Acquisition International speaks to Terry Newendorp, Chairman & CEO of Taylor-DeJongh (TDJ) about the availability of project finance in the USA. TDJ is an independent investment banking firm, and works with all commercial banks, official government and multilateral agencies, capital markets, private equity funds and institutional investors. TDJ has a global reputation for finding the best capital structure for the client’s project and in protecting the viability of cross-border investments.

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Project Finance Typical clients of TDJ are international oil companies, international power developers, oilfield services companies, institutional investors in energy and infrastructure, and governments. Project financing entails a carefully negotiated and well-structured allocation of most foreseeable commercial and political risks in each such project. It is not just that the projects are typically very massive capital investments, with a lot at stake for every party involved, it is also that a lot of careful analysis and diligence are put into the decision to allocate capital by each participant in the transaction. Statistically, the ratings agencies have demonstrated that “loss given default” for BBB- rated project financings is considerably lower (meaning, much less write-off for lenders and investors) than a comparably-rated corporate credit. Thus, project financing is a good way for an investor or lender to assure a more favorable outcome from such an investment. In the USA “In the USA, project financing is most frequently utilized for power projects, particularly in renewable energy projects (wind and solar). When North American investors develop projects in the oil & gas sectors internationally, project financing is frequently used for midstream and downstream projects, such as pipelines, LNG plants, refineries, and petrochemical facilities. There is also frequent use of project financing for power generation plants, ports, water treatment and other such infrastructure. “Few domestic US banks actually engage in project finance inside the USA. The predominant commercial bank participants

in the US project finance market are US subsidiaries of European and Japanese banks. The allocation of capital to the project finance sector by European commercial banks is still a matter of discussion amongst senior-most management in each of those banks. Some of them will undoubtedly find it appropriate to curtail capital allocation for project finance type lending, whereas others will find that the historical returns and risk/return balance in the project finance sector, will allow them to allocate even more capital than currently applied. “At present, there is adequate liquidity within the commercial bank market in the US to fund the relevant demand for wellstructured project finance transactions.” Sectors “There is increasing use of project financing for oil & gas projects and power projects in many African countries, in several SE Asian countries, and in India. “The sectors that quite often utilize project financing are: power generation, water/wastewater projects, ports, oil & gas midstream and downstream (such as pipelines, LNG, processing plants), and even some development drilling programs in already-proven oilfields. The Future “Appetite from borrowers for project finance will increase over the next 12 months globally. Much of the lending will involve export credit agencies, as many banks will not be able to allocate sufficient balance sheet exposure to accommodate all the new demand.”


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The Greek The Greek Fund Industry

George Chryssikos Stelios Probonas eurobankproperties@eurobank.gr www.eurobankproperties.gr T: 210 8129600 117, Kifissias Avenue & Agiou Konstantinou, Maroussi 151 24 Athens, Greece.

Fund Industry

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ith the Greek debt crisis having far reaching consequences on the international fund business, Acquisition International asks George Chryssikos, General Manager of Eurobank Properties REIC how is the Greek fund industry itself responding, and what role can it play in the country’s recovery? Eurobank Properties is the largest listed Greek Real Estate Investment Company and one of the most important institutional real estate investment vehicles in the South-East Europe. The Company became public with a successful IPO in the Athens Stock Exchange in April 2006 and is internally managed. The Company, as at June 30, 2011 has a real estate portfolio of € 633M, consisting of 56 properties with total size of 329.637 square meters. The majority of the property is located in Greece and more specifically 37 are in Athens and the remaining 13 properties are located in other Greek major cities. In Southeastern Europe the Company also owns 2 commercial properties in Serbia, 3 in Romania and 1 in Ukraine. The Company has a well-diversified portfolio and a very creditworthy tenant mix including EFG Eurobank, Carrefour, Praktiker, Marinopoulos Group, L’Oreal, Kuehne Nagel, H&M, and others. “Our advantage over our competitors is that we have a very strong balance sheet with high liquidity approximately € 144M in cash and low leverage approximately €88M in debt, thus in an excellent position to take advantage of any investment opportunities that may arise. “Furthermore, Eurobank Properties as a real estate fund is governed by a favorable tax regime and is being managed by experienced and skilled executives with in-depth knowledge of the Greek and International property markets.” Please describe a typical client and explain how their demands have changed since the onset of the downturn? “Eurobank Properties portfolio of tenants include large multinational and domestic corporations operating in various sectors i.e. banks, pharmaceutical companies, consumer goods, press, supermarkets, clothing, IT services, logistics etc. Indicative tenants are EFG Eurobank Group, Praktiker, Carrefour, Procter & Gamble, H&M, SingularLogic, GE Medical, Kuehne+Nagel. The recent economic downturn, debt crisis and prospects of the Greek economy have led our tenants to initiate significant cost cutting measures. Consequently, a large number of tenants and especially those operating in sectors that have been more severely affected are trying to minimise costs through lease renegotiations either by requesting lower rent through pricing or by leasing out less space.”

Please summarise the primary laws and regulations that govern the fund industry in Greece. “The primary law that governs the Greek real estate funds or Reic’s is L. 2778/1999 as it was modified by the L. 3581/2007. It should be noted that Reic’s are investment vehicles that are regulated separately from other Investment Companies.” Who regulates funds in your jurisdiction? Is there a code of ethics to adhere to? “The year 1999 was the year that the framework for the operation of Real Estate Investment Companies was introduced in the Greek legislation with law 2778/1999. The framework institutionalized a new form of asset ownership and management. In order to be considered a REIC, the Company must be listed in the Greek Stock Exchange. In addition, Reic’s must invest in commercial income producing assets that should be managed in a professional manner in order to increase revenues and increase shareholders value. “The Greek Capital Commission is the main regulator of REICs. Furthermore, the Greek fund Industry is obliged to comply with a specific code of ethics, the content of which is written in Capital Commission’s decision 1/462/7.02.2008. However, it is not clear if REIC’s should also comply with the above code of ethics.” What opportunities are currently available and who is currently investing? “Investing in the current economic downturn of Greece especially when taking into consideration the rising uncertainty and high volatility of the global markets is difficult. Eurobank Properties REIC is seeking for investment opportunities that offer high returns and low risk. An attractive investment opportunity is characterised by reasonable rent, premium location, solid tenant, long-term lease and entry yield that adequately reflect the risk. There are few investment proposals in the Greek and SE Europe coming from distressed sellers however the majority of them fail to meet the Company’s investment criteria as cited earlier. “Lastly, the privatisation of state owned real estate expected to take place in the next few years may give rise to opportunities for real estate funds to exploit.” What are the main challenges ahead for the Greek fund industry given the current turbulent economic environment? “The main challenges for the real estate funds are the maintenance of low vacancy rates, the effective management of rent renegotiation and rent collection. In addition, obtaining finance at reasonable interest rates will also be challenging in the next few years especially for those that have low liquidity.”

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D in

Map Phil Masterson managerservices@seic.com www.seic.com/ims Tel: +353 1 638-2435 Styne House, Upper Hatch Street, 2nd Floor, Dublin 2, Ireland.

Ian Asvakovith ian@pfsglobal.com www.pfsglobal.com Tel: (877) 386-3107 1604 Spring Hill Road, 3rd Floor, Vienna, VA 22182.

Frank Franiak franiak@woodfieldllc.com www.woodfieldllc.com Tel: (847) 385-2203 3601 Algonquin Road, Suite 900 Rolling Meadows, IL 60008.

K k w T P P

Denzil Boschat pepf@rbc.com Tel: +44 (0) 8000 566 550 The Channel Islands Fund Industry

International Air Transport Law – USA timothy.lynes@kattenlaw.com www.kattenlaw.com Tel: (202) 625-3686 Fax(202) 295-1118 2900 K Street NW, North Tower - Suite 200 Washington, DC 20007-5118

Lesley Piner Lesley.Piner@bedellgroup.com www.bedellgroup.com T: +44 (0)1534 814814 26 New Street, St Helier, Jersey JE2 3RA T: +44 (0)1481 812812 La Plaiderie House, St Peter Port, La Plaiderie, Guernsey GY1 1WG

Doing Business in Guinea

Aminata Bah Tall tallaminata@nimba-conseil.com Mobile: +224 24 55 55 02 Doing Business in Togo

Jean-Luc Gbati Sonhaye T.: +228 91 15 21 95 www.fondation-heinrich-klose.org Rue Elavagnon, Tokoin-Doumasséssé 13 BP 129 Lomé-Togo Doing Business in Nigeria Chief Anse Agu Ezetah www.aguezetahandco.com anseezetah3@gmail.com

Global Patterns of Project Finance

Philip Forsang Ndikum Tel: +237 3347 1537 Tel alt: +237 7509 1542 Philip@NdikumLawOffices.com

Sity Four

Andre Le Roux andre.leroux@maitlandgroup.com www.maitlandgroup.com Tel: +27 (0)21 681 8010 Maitland House 1, River Park Gloucester Road, Mowbray, Cape Town, South Africa


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Doing Business in Poland

Katarzyna Buczkiewicz katarzyna.buczkiewicz@gide.com www.gide.com Tel.: +48 22 344 00 91 Pl. Piłsudskiego 1, 00-078 Warszawa, Poland

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Central Securities Depository Malta Stock Exchange plc email csd@borzamalta.com.mt www.borzamalta.com.mt Tel: (+00356) 2569 6000 Bor a ta’ Malta, Castille Place, Valletta VLT 1063, MALTA

Map

International Auditing & Assurance - Mongolia Enkhbold B. Manager Citico-Audit LLC citico@mongol.net

Doing Business in Romania Svetlana Neceva sneceva@on.net.mk www.pepeljugoski.com.mk T: +389 2 3211 004

Str. Veljko Vlahovik No. 4/1-1, 1000 Skopje, Republic of Macedonia Romanian Fund Industry

Marko Simić T: 0040 21 539 66 10 www.zepter-invest.ro

SAI ZEPTER SA, Piata Alba Iulia nr.2, Bl. i1 Sc. 2, Et. 2, Ap. 19, Sect. 3 031104 Bucuresti, Romania

The Cross Border Tax Specialist – China Yoyo Zhongtianyue 2011-05-25 梁景旭 1989218abcd@163.com

Doing Business in UAE

Pradeep Bhandari proteam@companyanywhere.com T: 914425611073 #7 Sriji Place, 17, EVK Sampath Road, Vepery, chennai, Tamilnadu, 600007, India Doing Business in Egypt

Ahmed Abou Ali agaa@hassouna-abouali.com www.hassouna-abouali.net T: +20 (0)2 27924101 2 Abdel Kader Hamza St.,, Cairo Center Bldg, Garden City, Cairo, Egypt

Doing Business in Uganda Doing Business in the Democratic Republic of Congo

Roux p.com p.com 8010 Park, Cape Africa.

Irénée Falanka Bingi irefalanka@yahoo.fr T: (+243) 999936633

86, avenue Maringa , Commune de Kasa-Vubu, Kinshasa, République Démocra tique du Congo

Doing Business in Tanzania

c.rwechungura@crbafricalegal.com www.crbafricalegal.com T: +255 222 137 046 6th Floor Amani Place, Ohio Street, PO Box 79958, Dar es Salaam, Tanzania

Matovu Emmy emmy.matovu@marma.co.ug matovuemmy@yahoo.com www.marma.co.ug T: +256-414-236818 P. O. Box 29447 Kampala

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Deal Diary

Despite the turbulence in the wider economy, the UK’s small businesses are highly confident about their prospects over the next 12 months, with the vast majority of CEOs forecasting strong growth. According to the latest research from UK private equity firm ECI Partners, 79% of the SME CEOs surveyed expect to see turnover growth of more than 6% over the next year, while 60% forecast doubledigit turnover growth and nearly a third predict growth of over 20%. Overall, the 2011 respondents are even more bullish about growth expectations than last year. Prospects for job creation are equally strong, as 74% of CEOs expect to add to their firm’s head count, and more than 50% forecast growth in employee numbers of more than 6%. Last year only 30% of respondents expected similar levels of employment growth. This year’s figure comes despite predictions of falling private sector employment from media commentators and economists. In fact private sector employment has already grown by more than 500,000 over the last 12 months, according to ONS data. The positive outlook is detailed in ECI’s second annual Growth Survey, which questioned close to 250 chief executives of UK growth companies (those with a turnover between £10m and £200m) about their expectations, aspirations and growth strategies for the year ahead. This size of company employs more than 7.5 million people, accounting for more than one third of private sector jobs in the UK. Optimistic growth prospects summary for next 12 months: • 79% expect to grow turnover by 6% or more, with nearly a third anticipating growth of over 20%. • Profits growth of 6%+ is expected by 76% of CEOs, with 29% forecasting 25% or more. • 74% expect to grow employment, with 50% estimating growth of over 6% (up from 30% in 2010). Investment in the recruitment, development and retention of quality staff is a recurring theme. CEOs’ Growth Strategies: • For 94% of CEOs organic growth will be very significant/significant,

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rather than acquisition, with only 33% rating it as a very significant/significant strategy. • Most will be seeking growth through international markets by increasing international sales (69%) and greater use of overseas suppliers (42%). • Continental Europe and the USA remain the dominant international markets for their expansion but India and China in particular are becoming more important. • Their priorities for year ahead include, “Sales and Marketing” (28%), “R&D/New Product Development” (24%) and “Keeping costs under control in the current inflationary environment” (22%). Barriers to Growth: • The main barriers include the uncertainty in the macro economy, market demand, lack of human capital and competition. • Raising growth finance has become more difficult and the barriers to raising it include the amount of due diligence placed on the company and the overall lack of supply of capital. Sources of Growth Finance: • 96% of CEOs will finance their business’s growth through internal cash flow, but also will be “definitely/likely” considering bank debt (49%) and private equity (40%). • Only 8% of respondents consider the public markets as viable for raising growth finance. Topical factors: • Surprisingly, a third of companies believe that future rises in interest rates will not be a concern for them, perhaps due to their low level of existing debt, cash balances or hedging structures. • On the coalition government, 48% see the impact of their policies as positive or very positive. Industry sector growth expectations: • Software and IT Services sector is the most bullish, with 84% expecting to grow turnover by more than 6%, and 29% expecting turnover growth of 25% or more. Whereas Healthcare respondents were less positive than in 2010, but still 71% anticipate turnover growth of more than 6%, though only 11% of respondents expect growth of 25%+.


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Deal Index

DEAL INDEX Absolute Private Equity AG Adabank API Atos Medical Axel Tuecks CCN CMA Microdialysis' Preclinical Business Corbel Egg Mortgage and Savings business EpiGaN Euro-GPH Group Evolva EYSA five industrial business of Premetalco Inc Fluid Connector Products Inc Jacob Fruitfield Food Group

74 74 74 75 75 75 76 76 68 76 77 77 77 78 78 78

Hoan My Medical Corporation hotel portfolio/Fonciere des Murs Inpac International La Gardenia La Rinascente Lider Armazens Gerais LikeCube Oberthur Oil Field Safety Inc OPTI Perimeter Protection business unit Serventa Stanlow oil refinery Ecobank acquisition of The Trust Bank TWC L'Amy Vulcanic Group Wyde Corp

69 70 79 71 79 79 80 80 80 81 81 81 72 82 73 82 82

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Deal Diary

Yorkshire Building Society cracks Egg

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orkshire Building Society has entered into an agreement with Egg Banking plc, a subsidiary of Citigroup Inc., to acquire its mortgage and savings business, comprising a £2.5 billion savings book and a £430 million mortgage book. As part of the transaction the Yorkshire will also acquire the Egg brand. Yorkshire Building Society, which is the UK’s second largest building society with assets exceeding £30 billion, focuses on providing its members with financial security and longterm value across a comprehensive range of products backed up with excellent customer service.

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We were able at very short notice (within days which is not unusual in this type of transaction) to mobilise a sizeable due diligence team to arrive onsite at the vendor. This in itself can be a challenge but with our considerable experience of 12 years as the UK’s largest firm in our field we are able to balance the vendor and client demands.

Clayton Euro Risk (CER) represented the Yorkshire Building Society (YBS) in its

recent acquisition of the 550,000 mortgage and savings customers of Egg from

Citigroup, the US owner that bought the online bank in 2007. CER has worked

with the YBS since late 2009 with the merger of the Chelsea Building Society. The

team was overseen by Tim Keast CEO of Clayton Euro Risk.

The main challenge of the deal was to assess outcomes including losses under varying macroeconomic and risk scenarios. To over come this we loaded loan level data onto our MIAC|Acadametrics DataRaptor analytics and WinOAS cash flow platforms and used our integrated models to undertake loan by loan revaluation, stress testing, and cash flow analytics.

David Pickles Strategy & Development Director led the MIAC-Acadametrics

team, that acted on behalf of Yorkshire B.S on the deal.

Yorkshire Building Society Acquisition Of Egg Banking plc’s mortgage and savings business Legal Adviser to the Purchaser

Financial Adviser to the Purchaser Legal Advisers to the Vendor Tax Advisers IP Due Diligence Provider Risk & Insurance Due Diligence Providers

Virtual Data Room Provider

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Hoan My Medical Corporation acquired

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ortis Healthcare International Pte Ltd (“Fortis International”) has entered into an agreement to acquire a 65% stake in Hoan My Medical Corporation in Vietnam for US$ 64 million. This marks the entry of Fortis International into one of Asia's fastest growing economies and the group’s first acquisition of a hospital chain outside of India. Hoan My Medical Corporation (“HMC”) was established in 1997 and has grown to become one of Vietnam’s largest private healthcare provider groups with 700 beds across 5 Hospitals. It recorded revenue of US $ 23.8 million in FY10. Its new 200 bed state-of-the-art tertiary care hospital is scheduled to open in Ho Chi Minh City by November 2011. The group also has a strong foundation of 450 empanelled physicians.

Fortis Healthcare International Pte Ltd Acquisition of Hoan My Medical Corporation Legal Advisers to the Purchaser

Financial Adviser to the Purchaser

Deal Diary

This transaction was rather complicated as it involved multiple sellers with varying requirements, as well as structural issues associated with cross-border M&A transactions. Macquarie’s extensive M&A experience in the international healthcare sector and VinaSecurities’ in-depth knowledge of Vietnam corporate finance practices enabled this landmark healthcare deal in Vietnam to be completed well within the allocated three month execution period.

Macquarie Capital and VinaSecurities acted as Sole Financial Advisers to

Vietnam’s Hoan My Medical Corporation (“HMC”) in selling a 65% stake to Fortis

Healthcare International (“Fortis International”) for US$64 mm. The transaction

team was led by Nick Peterson from Macquarie and Hunt Macnguyen from

VinaSecurities.

There are certain ambiguities in the regulatory procedures affecting the implementation of the buyer’s intended structure, stemming from a number of bureaucratic vacuums and lack of specific guidelines in Vietnam for private placement and related matters. The transaction involves different sellers with different sets of interests and requires different structures and approaches. The closing process is elaborate in that it involves corporate issues to be streamlined throughout the network of subsidiaries and affiliates of the target company in Vietnam. This transaction was assisted by a very well orchestrated team of advisors to Fortis International, including the legal teams of Linklaters and Russin & Vecchi, bringing a nice blend of extensive international and local expertise. The two firms have had a relationship for the past 15 years. Russin & Vecchi is Linklaters’ recommended counsel for significant transactions involving Vietnam.

Linklaters Allen & Gledhill represented Fortis Healthcare

International as lead counsel, alongside Russin & Vecchi as

Vietnamese counsel with Nhut Nguyen, heading Russin & Vecchi

Corporate/M&A team in Vietnam.

nhmnhut@russinvecchi.com.vn www.russinvecchi.com

Financial Due Diligence Provider Legal Adviser to the Vendor Financial Advisers to the Vendor

Tax Adviser

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Deal Diary

Six hotels from Foncière des Murs acquired

A

joint venture partnership between an investment vehicle of an AXA Group insurance company, Caisse des Dépôts, and Sogecap, has signed an agreement to acquire a portfolio of six hotels from Foncière des Murs for EUR132.9 million, on a pure equity basis. The transaction, which was sourced off-market and put together by AXA Real Estate, is expected to complete before the current year end.

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This disinvestment, the first for Foncière des Murs in Belgium, was structured as a mix of share deals and asset deals, what makes it a little bit more complex. Loyens & Loeff acts as legal and tax advisor to Foncière des Murs since its first acquisition of a portfolio in Belgium in 2006.

Loyens & Loeff acted as legal and tax adviser to the vendor in this portfolio

transaction including two hotels in Belgium. The team was led by Senior

Associate Ariane Brohez, assisted by Associate Laura Hermant.

ariane.brohez@loyensloeff.com www.loyensloeff.com

Providing a total of 1,569 rooms, four of the hotels are located in Paris area, one is in Brussels with the other in Gent. All are strategically positioned in highly desirable locations with close proximity to developing business districts. In addition, as each hotel has recently undergone an extensive refurbishment programme, the JV does not expect there will be a requirement to invest any material capex into the portfolio.

Gide Loyrette Nouel acted as legal and tax advisor to Axa, Caisse des Depots et Consignations and Sogecap for the

acquisition of four hotels located in France. The team was led by partners Erwan Le Douce-Bercot and Guillaume

Jolly, and included associates Louise Duvernois and Nicolas Moreau Simont Braun, a major Belgian independent law firm, has acted as legal and tax advisor to AXA and its partners for all the Belgian legal aspects linked to the

AXA Group Insurance Company and Caisse des Dépôts Acquisition of Six hotels from Foncière des Murs Legal Adviser to the Purchaser

Legal Adviser to the Vendor

Vendor Due Diligence Provider

Seventy

acquisition of the two hotels located in Brussels and Gent. The team was co-lead

by Real Estate partner Manuela von Kuegelgen and Corporate partner Vanessa

Marquette.

vanessa.marquette@simontbraun.eu.

manuela.vonkuegelgen@simontbraun.eu


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Bridgepoint acquires La Gardenia

a Gardenia, the No 2 player in the Italian perfumery market, has been acquired by Bridgepoint from its current owners L Capital and Ergon Capital for an undisclosed sum.

Deal Diary

Gianluca Ghersini’s team assisted the private equity funds L Capital and Ergon Capital Partners (Vendors) with which Gianluca has been having a long-standing working relationship. Gianluca has been assisting the funds in several of their investments/exits in Italy in the last 10 years.

The team at Gianni, Origoni, Grippo & Partners (“GOGP”) was led by Gianluca

Ghersini, a Partner at GOGP since 2001 and currently a member of its Executive Committee and Co-Head of GOGP Private Equity Department. The team was

formed also by Giovanna Puppo (Junior Partner), Andrea Gritti (Senior

Associate), Andrea Civati and Tommaso Fassati (Associates), all from GOGP

M&A/Private Equity Department.

Electa Group provided deal structuring and funds flow structuring for the whole

operation.

gghersini@gop.it

KPMG Transaction Services assisted Bridgepoint in the financial due diligence, which included a detailed analysis of synergies with Limoni. The KPMG team, led by Paolo Mascaretti, leveraged on deep sector knowledge and experience of assisting PE in complex transactions. Full access to La Gardenia management, their open cooperation and mutual trust was key for the success of the due diligence as we analysed confidential business information.

pmascaretti@kpmg.it

Bank finance for the transaction was provided by Banca Imi, IKB , and MPS

Bridgepoint Acquisition of La Gardenia Debt Providers

Capital Services (acting as mandated lead arrangers, underwriters and

bookrunners) and advisers involved in the transaction included: for Bridgepoint

– Lazard, Société Générale and Banca Imi ( corporate finance and debt advisory),

KPMG (financial due diligence), Bain (market), Willis (insurance), Pavia & Ansaldo (legal), Maisto & Associati ( tax); for vendors CBVLex (tax).

Deal structuring & Funds Flow Legal Adviser to the Purchaser

Financial Adviser to the Purchaser Financial Adviser to the Equity Provider Financial Adviser to the Equity Provider Legal Adviser to the Sellers

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Deal Diary

Stanlow oil refinery acquired

E

ssar Energy plc has completed the $350 million acquisition of the oil refinery and other associated assets at Stanlow, near Ellesmere Port, Cheshire, from Shell UK Limited. The Stanlow refinery, near to Ellesmere Port in the north west of England, is the second largest refinery in the UK with a nameplate capacity of 296,000 barrels of oil a day. It supplies approximately one sixth of the UK’s petrol, as well as being a key manufacturer of diesel and aircraft fuel. The acquisition of the Stanlow refinery gives Essar Energy direct access to the UK market.

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Essar, a long standing client of KBC, greatly valued KBC’s advice and gave the following feedback to Duncan Micklem following completion of the transaction: “You have been a material contributor to this achievement, and I would personally like to thank you and the broader KBC team for your support on this transforming project for Essar. I’m sure the view is shared with all my Essar colleagues when I say, “I look forward to working with KBC again”!”.

KBC was commissioned as Essar's Environmental adviser on the deal. The team was led by Duncan Micklem, Senior Consultant,

included assessment of operational risks, liabilities and synergies

relating to Environmental, Health and Safety matters and provision

of extensive technical input into developing Heads of Terms and negotiating the

transaction's Sale & Purchase Agreement (SPA). KBC also advised on integration

matters post-signing of the SPA.

DMicklem@kbcat.com

A particular challenge of this deal for Essar was to be able to secure the strategic position while maintaining competitiveness outside its traditional home markets. RPS Energy, whose consultants are all experienced ex-Oil company professionals, was able to bring the relevant regional and local knowledge to compliment Essar’s deep refining expertise acquired in India. Over the last 3 years RPS has provided a wide range of support across Upstream as well as Refining, Trading, IT and Marketing issues for Essar.

Essar Energy plc Acquisition of Stanlow Oil Refinery Legal M&A

Technical/Commercial Adviser

HR&Pensions

Environment Due Diligence Providers

General Advisers

Seventy Two

Commercial support for Essar on the deal was provided by RPS Energy, led by

their Downstream Director, Simon Telling.


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L Capital acquires 35% stake in TWC L'Amy

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Capital, a PE firm sponsored by luxury group LVMH, has acquired a 35% stake in French fashion accessories company TWC L'Amy from Edmond de Rothschild Investment Partners (EdRIP). The value of the investment has not yet been disclosed, but L Capital usually invests €15-40m per transaction. EdRIP, which acquired its stake in an owner buyout of the business in 2009, will fully exit TWC L'Amy.

Deal Diary

Our group is extremely pleased to be involved in this mezzanine finance opportunity alongside other financial institutions. The financing structure is sound whilst TWC is performing extremely well. Our investment in TWC perfectly matches our fund strategy that aims at mezzanine tickets of between EUR 5 to 40 million. In the particular case of TWC, we accompany a small-mid market group to pass to their next development stage. We also believe that L Capital was the best choice of financial sponsor. L Capital has an unmatchable industry expertise and network. L Capital will open a broad window of opportunities for TWC to enter new markets.

Cesar Rodriguez Montes led the LFPI team providing mezzanine finance on the deal.

One of the challenges faced was to be able to properly assess the specificities as well as the quality of TCW L’Amy’s business model, all this in a very short period of time. Advention Business Partners represented L Capital with whom it

has a long-standing relationship on the deal. Alban Neveux, the

Managing Director of Advention Business Partners led the team

along with Nicholas Veg, Manager.

L Capital Acquisition Of a 35% stake in TWC L'Amy Mezzanine Finance

Mezzanine Adviser

Legal Adviser to the Seller

Strategic Due Diligence Provider

Seventy Three


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Deal Diary

Public tender offer for Absolute

GFH unit acquires Adabank in Turkey

HarbourVest Partners, LLC , HarbourVest Global Private Equity Limited, and the board of Absolute Private Equity Ltd have announced that a total of 43'005'846 shares of Absolute have been tendered to HarbourVest Acquisition GmbH under the public tender offer published on June 7, 2011 for all publicly held bearer shares of Absolute, with a nominal value of CHF 10 each.

G Capital, a Dubai-based company and a subsidiary of Bahrain’s Gulf Finance House (GFH), has acquired Turkey’s Adabank for $75 million in partnership with Gürmen Group.

Given the current tender level of 98.68%, HarbourVest plans to squeezeout the remaining minority shareholders and, subsequently, to delist Absolute from SIX Swiss Exchange and operate it as a privately held entity.

Although our client has been interested in entering the Turkish financial sector for some time, the announcement of the tender and the tasks necessary to participate in it were realized very quickly. The main challenge was arranging the shareholding structure and other agreements between the partners, documentation from different countries, and the tender strategy, all within the time limit. Our firm’s experience and dedicated, around-the-clock work with our client are behind our success.

The combination of regulatory (collective investment scheme, stock exchange) and public takeover law issues made the structuring of the deal particularly complex. Another layer of complexity was added to the deal when a second bidder publicly announced a private purchase offer to the majority shareholder of Absolute and when, later on, a third bidder launched a competing partial tender offer for Absolute. Pestalozzi Attorneys at Law acted on behalf of

HarbourVest on Swiss public-m&a, corporate regulatory

Adabank is headquartered in Istanbul and was placed for sale by the Savings Deposit Insurance Fund (TMSF), said a statement.

RPM acquires API S.p.A.,

RPM International Inc.’s Performance Coatings Group has acquired API S.p.A., a $28 million producer and installer of polyurethane and urethanebased flooring and decking solutions for cruise ships, mega-yachts and naval applications. Based in Genoa, Italy, API also produces epoxy and polyurethane flooring systems for the Italian building market. API will continue to be led by Giorgio Magnaghi, managing director and grandson of company founder Mario Magnaghi, along with his management team, which includes Vittorio and Beniamino Magnaghi, also grandsons of the founder.

the deal. Dr. Ali Göksu, the founding partner, and

API enhances RPM's presence in the decorative flooring market and will complement the strengths of our Stonhard and Flowcrete commercial polymer flooring businesses," stated Frank C. Sullivan, RPM chairman and chief executive officer. "We're fortunate to have Giorgio Magnaghi and his team continue to run this business as part of RPM, and their joining with us is yet another example of RPM's appeal as an ideal home for entrepreneurs in our industry.

info@gsimeridian.com

Pavia e Ansaldo Law Firm represented the sellers in the

GSI Meridian acted on behalf of G Capital Limited on

Lale Deliveli, a partner, led the team.

transaction. The team was led by the partner Giuseppe

and tax law on the deal. Severin Roelli, Partner led the

Dell’Acqua. Partner Enrico Del Guerra, head of labour

issues) and Pierre-Olivier Gehriger, Partner (tax law).

with labour issues associated with the acquisition.

team, assisted by Oliver Widmer, Partner: (regulatory

Absolute Private Equity Public Tender Offer

department, assisted API’s managers in connection

GFH unit Acquisition of Adabank

RPM Acquisition of API S.p.A.

Legal Adviser to Gulf Finance House

Legal Adviser to the Seller

Legal Adviser to the Purchaser

Legal Adviser to the Vendor Financial Due Diligence Provider to Gulf Finance House Financial Adviser to the Vendor

Virtual Data Room Provider

Seventy Four

Due Diligence Provider


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Deal Diary

Nordic Capital Fund V sells Atos Medical to EQT VI

Nordic Capital Fund V has announced the divestment of the medical devices company Atos Medical to EQT VI. The parties have agreed not to disclose the terms of the transaction. Atos Medical, headquartered in Hörby in southern Sweden, was acquired by Nordic Capital in 2005 from Fisher Scientific International. Through a transaction like Atos Medical, Moelis & Company has once again demonstrated its growth into a truly global independent investment bank that is successfully competing with the bulge bracket houses. Handling a sellside mandate like Atos Medical involves, among other things, contacting potential corporate and private equity buyers on a global basis and deploying the manpower required to conduct a full blown broad auction process with all the due diligence coordination and other elements such a process entails. Moelis & Company represented Nordic Capital and

Atos Medical in this transaction. The team was led by

Kasim Kutay, Managing Director, and head of healthcare at Moelis & Company.

kasim.kutay@moelis.com

EQT VI Acquisition of Atos Medical Debt Providers

Axel Tücks GmbH acquired

Marwyn Management Partners plc (“MMP”) subsidiary Marwyn European Transport plc (“MET”) has agreed to acquire all of the issued share capital of Axel Tücks GmbH (“Tücks”), the German bus operator, together with related assets and operations, for an initial consideration of €3.75m payable in cash.

Tücks currently operates more than 100 buses within the Rhine-Ruhr region of South West Germany, incorporating a diversified mix of school buses, social services transport and local public buses on behalf of a number of local authorities. In the year ended 31 December 2010, Tücks generated unaudited revenue of approximately €5.0m and EBITDA (prepared consistently with MET plc’s accounting policies) of €0.9m. Tücks’s current management team will remain in place following completion of the acquisition. Additional consideration payments of up to €1.25m in cash may become payable subject to the achievement of specific financial performance targets.

Deloitte provided financial and tax due diligence services to Marwyn European Transport, with the work being led by David Krüger (partner) and Chris Fisher (director) from the Munich Transaction Services team. Taxation services were led by Marcus Roth (partner). Deloitte leveraged its deep experience in the German transport sector to help ensure that Marwyn obtained a comprehensive understanding of the key business drivers and financial metrics within the target. Deloitte worked pragmatically with the seller’s management team to ensure Marwyn’s due diligence objectives were fully and efficiently met.

Marwyn European Transport plc Acquisition of Axel Tücks GmbH Legal Adviser to the Purchaser Financial Adviser to the Purchaser

Financial Advisers to the Equity Provider

Financial Adviser to the Vendor

Legal Adviser to the Vendor

Financial Due Diligence Provider & Tax Adviser

Halder backs CCN MBO

German private equity firm Halder has acquired automotive components manufacturer CCN through an MBO. Sellers include industrial private equity fund Helarb Fund who had taken over a majority stake in CCN in 2004. CCN Group was founded in 1986 and specialises in high precision components and castings. In recent years the company has built an international production network including facilities in France, Slovakia and Mexico and is looking into further expansion in Asia. Last year the company recorded sales of approximately €100m. I advised Halder with regard to merger control filing requirements worldwide. I filed a merger control notification with the German Federal Cartel Office and obtained clearance for the transaction. I have been advising Halder on merger control law aspects and coordinating merger control filings for earlier transactions also. My work requires a thorough understanding of private equity fund structures and wide experience in multi-jurisdictional merger control filings. Dr. Rolf Hempel, Partner and competition Law at

CMS Hasche Sigle who advises clients on all matters

of German and EU competition law and on multi-

jurisdictional filings in particular.

Halder Acquisition Of CCN Legal Due Diligence Provider

Market Due Diligence Provider

Financial Due Diligence Provider

Legal Adviser to the Vendor Financial Adviser to the Vendor Merger Control

Seventy Five


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Deal Diary

CMA Microdialysis' Preclinical Business acquisition

Harvard Bioscience, Inc. (Nasdaq:HBIO), a global developer, manufacturer, and marketer of a broad range of tools to advance life science research and regenerative medicine has acquired the preclinical business unit of CMA Microdialysis AB through a purchase of assets. CMA Microdialysis AB is a privately held Swedish manufacturer of microdialysis products. Founded in 1984, the company pioneered the microdialysis technique for in vivo sampling and monitoring of organs and tissues. This acquisition is complementary to the current Harvard Apparatus research products for neuroscience applications. Chane Graziano, CEO of Harvard Bioscience, commented: "The acquisition of CMA Microdialysis' preclinical business provides Harvard with a leading technology to add to our line of specialized tools for biological research. The business unit will remain in Sweden under the leadership of Erik Düring. We expect this acquisition to be immediately accretive to earnings." Sara M. Kruse, Partner led the Jaffe Raitt

Heuer and Wiess team that acted on behalf

of Harvard Bioscience, Inc. on the deal.

Johan Palmgren, partner led the Ramberg team

Valedo I invests in Corbel

Valedo Partners Fund I AB (“Valedo I”) has acquired Corbel Oy (”Corbel”), a market leader in property management services in Finland, from Sentica Partners. Corbel's existing management will continue to run the company and remain as significant owners and with support from Valedo implement a strategy for accelerated expansion. Corbel is the final investment in Valedo I and consequently Valedo Partners Fund II AB (“Valedo II”) has been launched. “Corbel has very exciting future prospect - our ambition is to accelerate Corbel’s expansion through providing new value-added services to our existing customers as well as through gaining new contracts with property owners that are increasingly outsourcing the administration of their real estate. Over the past few years, Corbel has grown substantially and we look forward to continuing and accelerating this growth plan with the support of Valedo.” says Harri Oesch, CEO of Corbel. Arthur D Little acted on behalf of Valedo on the deal,

Harvard Bioscience, Inc. Acquisition of CMA Microdialysis AB Stake Legal Adviser to the Purchaser

Capricorn Ventures, Robert Bosch Venture Capital and LRM have invested €4m in Belgian renewable energy equipment company EpiGaN. Capricorn Ventures invested through the Capricorn Cleantech Fund, which closed on €100m in 2008. Robert Bosch Venture Capital is the VC arm of the Bosch corporation, while LRM is a venture capital firm investing in the Limburg region.The series-A round of funding will allow EpiGaN to launch volume production of GaN-on-silicon wafers. We represented the founders and the company throughout the entire spin-off and investment cycle, from setting up the company and its management structure, licensing out the IP from IMEC, assisting the management in its search for attracting investment and in the negotiation and documentation of the actual investment. Laga assisted EpiGaN and its three founders, Dr

Marianne Germain, CEO, Dr Joff Derluyn, CTO and Dr Stefan Degroote, COO, in connection with

reinforcing a long lasting working relationship. Jonas

spinning-off its activities from IMEC, a world-leading

challenges such as working in a niche market with

technology. Christoph Michiels, contract partner led

Andren Manager led the team that overcame

low transparency.

acting on behalf Harvard Bioscience, Inc. on the deal. He was assisted by Michael Krusin, senior associate.

Capricorn et al. in €4m round for EpiGaN

Valedo Partners Fund I AB Acquisition Of Corbel Oy Debt Provider

Helsingin OP Bank Plc

research centre in nano-electronics and nanothe team.

Capricorn Ventures, Robert Bosch Venture Capital and LRM EpiGaN Investment Legal Adviser for the Investors

Legal Adviser to the Vendor Legal Adviser to the Purchaser

Legal Adviser to the Vendor

Financial Adviser to the Vendor

Seventy Six

Legal Adviser the Founders Financial Adviser to the Vendor

Tax Adviser

Commercial Due Diligence Provider

Company Auditor

Tax and Financial Adviser


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Deal Diary

Acquisition of EuroGPH Group EuroGPH Group has complemented an LBO operation together with its CEO, Christine Cottard and the private equity fund Pragma Capital who now owns a majority stake in the company. EuroGPH manufactures, imports and distributes equipment for restaurants, professional kitchens, bakeries, and snack bars. The group, chaired for 19 years by Dominique Laugier, has experienced a strong growth in particular through acquisitions.

Evolva secures funding

Drug delivery business Evolva has raised CHF30m (€26m) from YA Global Master. The round was funded using a Standby Equity Distribution Agreement (SEDA), under which YA Global has agreed to provide the full amount over a 36 month period in individual advances of up to CHF 600,000 with an initial advance of CHF 500,000.

The aim of the new shareholders is to develop the Group furthermore and strengthen its leading position on the French market for the equipment of the professional kitchen.

Evolva has developed a genetic chemistry platform to replicate, on an industrial basis, the ability of nature to create small molecules. The company’s pipeline includes a compound for renal and cardiovascular diseases that entered Phase I at the start of 2009, and anti-fungal and anti-viral compounds that entered Phase I in 2010.

Alterlex acted on behalf of Pragma Capital, responsible for all the legal audit process on the deal. Catherine LEGER Partner led the team. www.alterlex.com

The Swiss company is backed by Auriga Partners, Vinci Capital, Wellington Partners, Astellas Venture, Dansk Innovation, Novartis Bioventures and Sunstone Capital. Ernst & Young acted as Tax advised to Evolva.

EuroGPH Group Leveraged Buy Out

Legal Adviser to the Vendor

Legal Due Diligence Provider

Tax Adviser to the Vendor

Evolva Secures CHF30m (€26m) Funding from YA Global Master Legal Adviser to the Equity Provider

Legal Adviser to the Vendor

Strategic Due Diligence Provider Tax Adviser Financial Due Diligence Provider

Estacionamientos y Servicios S.A acquired Dinamia Capital Privado S.C.R., SA together with other funds managed by Nmas 1 Capital Privado S.G.E.C.R., SA have entered into an agreement to acquire 1005 of the share capital of Estacionamientos y Servicios S.A.Dinamia Capital Privado S.C.R will subscribe and pay up to €15 million for 25% of the share capital. EYSA integrated within FCC Versia until today, a subsidiary that integrated several service divisions within the FCC Group, operates in the car parking sector and manages more than 120, 000 regulated on–street parking spaces and off – street parking spaces. Additionally thecompany manages the municipal two tracks and deposit services in several locations. The closing of the transaction is expected for November 2011, subject to certain conditions precedents, including the approval by the corresponding Spanish anti- trust authorities. Akerton Partners S.L has been Nmas 1 Capital Privado S.G.E.C.R., SA´s Demand Advisor throughout the transaction.

Dinamia Capital Privado S.C.R., SA and Nmas 1 Capital Privado S.G.E.C.R., SA Acquisition of Estacionamientos y Servicios S.A Legal Adviser to the Purchaser

Financial Adviser to the Purchaser & Equity Provider Legal Advisers to the Equity Provider

Legal Adviser to the Debt Providers Commercial Due Diligence Provider

Seventy Seven


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Deal Diary

Portfolio of 5 Canadian industrial Businesses acquired

Nova Capital Management Ltd (“Nova”) the specialist acquirer of corporate and private equity portfolios has completed the acquisition of 5 industrial businesses in Canada. The acquired businesses formed the major part of Premetalco Inc., the Canadian Subsidiary of Amalgamated Metal Corporation Plc (“AMC”), a UK based industrial group. The businesses acquired were Wilkinson Steel and Metals, Exchanger Industries, The East and West Canada divisions of National Concrete Accessories and Debro Chemicals & Pharmaceuticals, a distributor of specialty chemicals. The five acquired businesses have aggregate sales of approximately CAD 400 million and employ more than 720 people in 30 operating facilities across Canada. Nova was advised on the acquisition by HSBC Securities (Canada) Inc., Stikeman Elliott LLP, Simmons & Simmons LLP and KPMG LLP. AMC was advised by McGladrey McGladrey Capital acted on behalf of Amalgamated Metal Corporation Plc on the deal. Malik Sharif, Managing Director led the team.

Nova Capital Management Ltd Acquisition of 5 industrial businesses in Canada Legal Adviser to the Purchaser

Financial Adviser to the Purchaser

McCoy Sales Corporation and Fluid Connector Products Merge to Form Motion & Flow Control Products McCoy Sales Corporation (“McCoy”), a leading distributor of fluid connectors, fluid power equipment, hydronic heating systems, and instrumentation and seal products, has announced it will merge with Portland, Oregon-based Fluid Connector Products Inc. (“FCPI”) to create the largest Parker Hannifin distribution network in the Western United States. Colville Capital, a North Carolina-based private equity firm, has been an investor in McCoy since 2006, and will continue to be the majority shareholder of the combined company. Our clients were both selling their equity in Fluid Connector Products, and acquiring equity in the new entity, MFCP, so both Buyers’ and Sellers’ due diligence processes were conducted and coordinated during negotiation of the closing documents. The compatibility and cooperation of all participants in working towards closing rendered the process friction free. Hunt & Associates, PC represented the shareholders of Fluid Connector Products, Inc. in the negotiation and drafting of the documentation of their clients’ sale of their equity interests in Fluid Connector Products to McCoy Sales Corp. and in their clients’ equity investment in McCoy Sales Corp. Lawrence B. Hunt, President and Shareholder led the team. www.huntpc.com

Fluid Connector Products and McCoy Sales Corporation Merger

Legal Adviser to the Equity Sponsor

Valeo to acquire Jacob Fruitfield Food Group Valeo Foods (“Valeo”) has reached agreement to acquire the business of Jacob Fruitfield Food Group (“Jacob Fruitfield”) for an undisclosed consideration. The deal is subject to regulatory approval. The combined business of Valeo and Jacob Fruitfield will have an annual turnover of approximately €300 million and a combined workforce of nearly 500. The deal is consistent with Valeo’s strategy to grow its business in the Irish food sector where international competition, domestic manufacturing costs and pressure to meet retailers’ and consumers’ requirements in terms of price and value is an ongoing and significant challenge. Combinations of different businesses by their nature are complex, and our experience from previous transactions in detailed business analysis and reporting, and our knowledge of taxation risks and structuring options were key to our input on the deal. Deloitte Corporate Finance acted for Jacobs Fruitfield,

providing due diligence, taxation and deal structuring

advice. Ronan Nolan, Partner in charge of Corporate

Finance led the due diligence and related work, supported

by Craig Bale, Director and Denis Tobin Manager. Padraig Cronin, Partner in charge of Taxation Services led the

taxation advice, supported by Karen Walshe, Director.

rnolan@deloitte.ie

Valeo Foods Acquisition of Jacob Fruitfield Food Group Debt Providers

Legal Adviser to the Seller

Legal Advisers to the Debt Providers

Legal Advisor to the Senior Debt Provider

Financial Due Diligence Provider

Legal Advisor to the Subordinated Debt Provider

Financial Adviser to the Vendor

Accounting Due Diligence Provider for Purchaser

Financial Adviser to the Vendor

Financial Due Diligence Provider

Legal Advisor to the Subordinated Debt Provider

Vendor Due Diligence Provider

Seventy Eight

Legal Adviser to the Vendor


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Deal Diary

Inpac International acquired Stora Enso has completed the acquisition of 51% of the Chinese packaging company Inpac International. The enterprise value of the company is EUR 80 million. Stora Enso will also purchase the production plant site and buildings at Qian'an in northern China for approximately EUR 13 million. Stora Enso is the global rethinker of the packaging, paper and wood products industry. We always rethink the old and expand to the new to offer our customers innovative solutions based on renewable materials. Stora Enso employs some 26,000 people worldwide, and our sales in 2010 amounted to EUR 10.3 billion. Stora Enso shares are listed on NASDAQ OMX Helsinki (STEAV, STERV) and Stockholm (STE A, STE R). In addition, the shares are traded in the USA as ADRs (SEOAY) in the International OTCQX over-the-counter market. Following the acquisition, the new Inpac business unit will be reported as part of Stora Enso's Industrial Packaging segment results from the third quarter of 2011 onwards.

Stora Enso Acquisition of Inpac International Stake Legal Adviser to the Management Team

Sale of La Rinascente s.r.l.

Rinascente/Upim s.r.l., a company owned by a consortium comprising Investitori Associati, Deutsche Bank Real Estate Global Opportunities (DBGO), Prelios and Borletti Group, sold 100% of La Rinascente s.r.l. (“La Rinascente” or the “Company”) share capital for a total consideration €205m (€260m on an enterprise value basis). La Rinascente is an Italian retailer operating a chain of 11 high-end department stores in major Italian cities, generating in 2010 a turnover of ca. €360 mn.

The Company was bought by Thai department store operator Central Retail Corporation. Investitori Associati reaped a money multiple of 2.5x and an IRR of 16% on its investment. Prelios made a profit of more than €30m. The purchase price corresponds to an implied EV / EBITDA multiple of approximately 11x 2010 EBITDA , a substantial premium to both trading multiples of comparable companies and most recent M&A transactions in the space. Citi acted as sole financial advisor to Investitori Associati, DBGO and Prelios in relation to the sale of their indirect controlling interest in La Rinascente. Citi execution team was led by Pier Luigi Colizzi (Head of Italy Banking, pierluigi.colizzi@citi.com) and Andrea Nappi (Head of Italy M&A, andrea.nappi@citi.com). UniCredit acted as sole financial advisor to Rinascente / Upim s.r.l., the company through which Investitori Associati, DBGO, Prelios and Borletti Group held their interest in La Rinascente. UniCredit Corporate Finance Advisory team managed the transaction, with execution led by Andrea Cacciapaglia (Consumer Goods Italy, andrea.cacciapaglia@unicredit.eu)

Central Retail Corporation Acquisition of La Rinascente s.r.l. Financial Adviser to Investitori Associati, DBGO and Prelios

Financial Adviser to Rinascente/Upim s.r.l.. Financial Adviser to the Management Team

Sodrugestvo Group has acquired 100% of Lider Armazens Gerais S.A. Lider, the largest Brazilian private company engaged in the storage and transshipment of grains, owns 15 warehouses located in Brazil's fastest growing agricultural regions. All warehouses are leased to leading agricultural companies, including Sodrugestvo, through exclusive long-term agreements. Lider also owns and operates for Vale two transshipment terminals in Minas Gerais and Tocantins.

We were contacted by the sellers in order to assist them in the corporate restructuring of Lider Armazéns Gerais S.A. and its affiliates and in their afterwards sale to potential investors. We also provided legal support to the sellers during the due diligence process. “Once the preliminary negotiations started regarding the acquisition of shares, we have assisted the sellers in the negotiations regarding the Share Purchase Agreement, as well as in the structuring of the deal. Almeida Bugelli e Valença Advogados Associados represented the sellers in the deal, reinforcing a long standing working relationship. Mrs. Silvia Bugelli, senior partner (responsible for the corporate, capital markets and banking area), led the team throughout the deal together with Michelle Marie Morcos, João Filipe Gomes Pinto and Raphael Augusto Caramuru Fernandes.

Sodrugestvo was advised for the transaction by Machado Meyer. The acquisition was entirely financed by Sodrugestvo’s own fund, without recourse to debt. The Lider operation will be integrated into Carol-Sodru S.A., the joint-venture between Sodrugestvo and CAROL that already operates 14 in the States of Sao Paulo, Goias, and Minas Gerais.

Sodrugestvo Acquisition Of Lider Armazens Gerais S.A Legal Adviser to the Purchaser

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Sodrugestvo acquires Lider Armazens Gerais S.A

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Seventy Nine


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Deal Diary

Time Out acquires LikeCube

Oberthur's card and identity divisions acquired

Total Safety Acquisition of Oilfield Safety

Time Out Group (the leading provider of information on arts, entertainment, culture and food & drink around the globe) has taken a further step in its rapid progression towards consolidation as a digital media group, with the acquisition of Like Cube, the cutting edge personalisation software company that uses semantic analysis to give web and mobile users personalised recommendations.

Private equity firm Advent International has acquired Oberthur's card and identity divisions in a deal valuing the whole unit at EUR1.15 billion.

Total Safety, the leading global provider of integrated safety services and compliance solutions, announced it has acquired Oilfield Safety, Inc. (“OSI”) based in Williston, North Dakota.

Jean-Pierre Savare, founder of the French technology company, and his family are retaining a minority stake of about 10% in the business and also keeping Oberthur's smaller fiduciary printing unit.

With over twenty years of customer service each, the companies will add to Total Safety’s Williston Basin presence through additional air, gas, and fire services. OSI provides critical safety services to the upstream energy markets including air, gas, and fire services to complement their equipment rental fleet.

Once the software is integrated, Time Out will use the intelligence gained from users’ “taste graphs” to further complement its award-winning editorial in providing consumers with an unparalleled service, delivering inspiring ideas, online and via mobile. David King, Time Out’s CEO, says “LikeCube will ensure Time Out can deliver the best, most relevant recommendations to its customers, making sure they get the most out of their time and money”. We provided advice as necessary in respect of the tax aspects of the deal including reviewing the content of the agreement and commenting accordingly and preparing up to date management information.

Taj, Law Firm acted on behalf of Advent International advising on the labour law aspects of the deal. Malik Douaoui, Partner led the team assisted by Corinne Guyot- Chavanon, Senior Manager and Jessica Mauné, lawyer. Landwell & Associés Law Firm acted on behalf of Oberthur Technologies on the legal, tax and labour law vendor due diligence. Partners involved were Cécile Debin for Legal, Rémi Montredon for Tax and Bernard Borrely for Labour Law.

Crowe Horwath LLP acted on behalf of the acquirer, Total Safety US, reinforcing a long-standing relationship with Total Safety going back several years. The due diligence team was led by Mike Lux, Partner, and Stewart Day, Manager. The tax due diligence team was led by Mark Goodman, partner. In a statement regarding the transaction, Mike Lux commented “we enjoyed working with the target company’s owner and team and it was a pleasure to once again assist Total Safety with its expansion plans”.

Bryan Kemsley, Partner at McCabe Ford Williams led the team that acted on behalf of the

director/shareholders of Likecube Limited.

Time Out Acquisition of LikeCube

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Tax Adviser

Advent International Acquisition of Oberthur's card and identity divisions M&A Adviser to Oberthur

Debt Provider

Corporate Adviser to Oberthur

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Environnement Due Diligence Provider

Eighty

Total Safety Acquisition of Oilfield Safety

Management Team Due Diligence Provider


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Deal Diary

CNOOC acquires OPTI Canada

The Perimeter Protection business unit acquired

China’s largest offshore oil producer, CNOOC has acquired OPTI Canada in a takeover bid valued at US$2.1 billion. The takeover will result in CNOOC assuming all of the Canadian’s oil company’s debt and gaining access to their oil sands assets.

Procuritas Capital Investors IV LP A has acquired the Perimeter Protection business unit, a leading European supplier of outdoor perimeter protection products and systems, including high security products, fences, and gates.

China’s largest offshore oil producer, CNOOC, announced the acquisition of OPTI Canada in a takeover bid valued at US$2.1 billion. The takeover will result in CNOOC assuming all of the Canadian’s oil company’s debt and gaining access to their oil sands assets.

The acquisition will take place through a newly established Swedish holding company. Closing will follow customary Competition Authority approval.

The takeover is not the first foray into the Canadian Oil Sands market by a Chinese company. Last year, China Petrochemical spent US$4.65 billion to purchase a major stake in Syncrude Canada, an Alberta-based oil sands venture. OPTI Canada’s main assets include investments in several projects in the Athabasca region of Alberta province, Canada, and a 35% stake in Nexen’s Long Lake project, one of the largest operational oil sands mining projects in Canada.

We are very excited about this opportunity. The Perimeter Protection Group with its associated brands, like Gunnebo-stängsel in the Nordic Countries and elkosta in continental Europe, has a strong legacy, and is a market leading player in a number of markets. We believe the group will be in a better position to service its customers and to grow profitably in its core markets.” said Tomas Johansson, Partner at Procuritas AB, adviser to PCI IV.

Serventa disposal

European private equity investors N+1 Private Equity and Dinamia Capital Privado have sold their entire shareholding in vending services company Serventa to private equity-backed vending machine operator Autobar Group. Vending operator’s activity consists of the refilling and maintenance of vending machines installed in client sites. Operators own the machines which can be installed in private facilities, mainly work places, or public spaces as hospitals, subway, etc. where general public has access to the machines. Collection from sales, as well as the cost of the goods sold, belongs to the operator although in some cases operators might pay a fee to client for the space. Arcano, the leading Spanish investment banking

firm, led the transaction as financial adviser to the sellers on the deal, while PWC was the legal and

financial adviser to the buyer.

diligence on the target on behalf of

We have a long standing relationship with Nmás1 as we are one of the firms they usually work with. One of the most challenging elements in this sale was to achieve a speedy process in order to assure that the deal was completed before August.

Fredrik Vernersson, Senior Executive adviser and

Garrigues acted for the seller, the funds managed and

Booz & Co conducted the commercial due

Procuritas Capital Investors IV on the deal.

Per-Ola Karlsson, Senior Vice President led the team.

advised by Nmás1 Private Equity on the deal. The

Garrigues team was led by partner Rafael González-

Gallarza. José Sánchez Montalban, a senior associate, also played a key role.

CNOOC Acquisition of OPTI Canada

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Procuritas Capital Investors IV LP A Acqusition of Perimeter Protection business unit

Autobar Acquisition of Serventa

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Financial Advisers to the Vendor Management and Audit Due Diligence

Eighty One


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Deal Diary

The Trust Bank, Ghana Limited (TTB) acquired Ecobank Transnational Incorporated (Ecobank), the parent company of the Ecobank Group has acquired The Trust Bank, Ghana Limited (TTB), strengthening Ecobank’s operations as a Pan-African bank. Ecobank, which is the only banking group with a presence in 32 African countries, has said that the transaction is to strategically create the requisite synergies to position the merged entity as the leading bank in Ghana. Ecobank’s interest in the acquisition is said to be inspired primarily by TTB’s approach to SME banking as well as its strategic branch network.

Vulcanic acquired

Abénex Capital, in association with Vulcanic's CEO Christian Schott and his team, has acquired Vulcanic from 21 Centrale Partners. Vulcanic is the European leader in the design and manufacture of electrical heating, cooling and temperature control systems for industrial applications. Vulcanic has built a broad and diversified base of over 30,000 loyal customers as well as a portfolio of highly recognised references and has become a widely renowned expert in its industry sector. Over the past 5 years, with the support of 21 Centrale Partners, Vulcanic further consolidated key fragmented niche markets and conducted grouplevel integration via implementation of governance principles, sale of non-core assets, industrial rationalization and strengthening of the management team. Advention Business Partners conducted the vendor strategic due diligence of Vulcanic which highlighted its key growth areas and the potential for future value creation.

Ecobank Transnational Incorporated (Ecobank) Acquisition Of The Trust Bank, Ghana Limited (TTB),

Abénex Capital Acquisition of Vulcanic

Financial Adviser to the Purchaser

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Legal Adviser to the Purchaser

M&A Adviser

Wyde Corp acquired

Indian software services provider Mphasis Ltd has acquired U.S.-based software vendor Wyde Corp, which is the Bangalore-based co's second investment in the insurance sector. Wyde's revenue was over $30 million in 2010. The mid-sized Indian software firm had acquired AIG Software Systems in 2009, its first buy in the insurance space. Post acquisition, Wyde, which has over 200 employees with insurance domain expertise, would operate as a product business of Mphasis, the Indian firm said in a statement. Nishith Desai Associates, an international law firm acted as MphasiS's Indian legal Counsel and also

undertook and implemented legal project

management for the transaction. The team was co-

led by Mr. Vaibhav Parikh, Partner and Mr. Huzefa

Tavawalla, Senior Associate from Nishith Desai Associates

Mphasis Ltd Acquisition of U.S.-based software vendor Wyde Corp Legal Advisers to the Purchaser

Vendor Due Diligence Provider Financial Due Diligence Provider

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Eighty Two

Strategic Due Diligence Provider

Investor Due Diligence Provider

Financial Due Diligence Provider

Virtual Data Room Provider


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The Spirit of Independence


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