The main legal framework governing mergers and acquisitions in Cyprus are the:
- Companies Law, Cap 113
- Public Takeover Bids for the Acquisition of Securities of Companies and Related Matters Law (41(I)/2007).
1. The Companies Law, Cap 113 regulates the merger and restructuring of private Cyprus companies and the merger and division of public companies. The aforementioned law implemented Directive 2005/56/EC on cross-border mergers of limited liability companies (Cross-border Mergers Directive) into Cyprus law.
Although the subsequent Directive (EU) 2017/1132 repealed, with effect from 20 July 2017, the Cross-border Mergers Directive remains relevant for determining the framework for cross border mergers, since the 2017 directive essentially codified six existing and different directives relating to company and commercial law.
Further, since the 2017 directive has a direct effect in Cyprus, the provisions Chapter II of the EU Directive 2017/1132/EC are also relevant.
2. The Public Takeover Bids for the Acquisition of Securities of Companies and Related Matters Law (41(I)/2007), implementing the EU Takeover Directive (2004/25/EC) into domestic legislation. this legislation regulates public company takeover bids where:
- the target’s registered office is in Cyprus and its securities are traded on a Cyprus-regulated market and
- the target’s securities are not admitted to trading on a regulated market in the EU member state in which the target has its registered office, provided that certain conditions are met.
3. Other legislation whose relevancy must be considered in merger and acquisition transactions include the :
- Cyprus Securities and Stock Exchange Law (14(I)/1993);
- Business of Credit Institutions Law (66(I)/1997);
- Preservation and Safeguarding of Employees’ Rights on the Transfer of Business, Facilities or Parts of Business or Facilities Law (104(I)/2000);
- Income Tax Law (118(I)/2002);
- Transparency Requirements (Securities Admitted to Trading on a Regulated Market) Law (190(I)/2007);
- Control of Concentrations between Undertakings Law (83(I)/2014) and
- Market Abuse Law (102(I)/2016).
It should also be noted that Law 41(I)/2007 gives the Cyprus Securities and Exchange Commission authority to issue subsidiary legislation for further regulating such bids.
How can we help?
We have acted or advised in relation to numerous mergers and acquisitions, of both local and international character. We can assist and provide advice with regards to all aspects of mergers. In particular we can assist in:
- structuring and control of mergers, acquisitions and joint ventures;
- cross-border transactions;
- contract drafting and review;
- legal, financial and tax due diligence;
- share and asset acquisition and management;
- corporate dispute resolution.
Theodorou Law is a Cyprus law firm with Cyprus lawyers and other legal experts on legal matters involving Cyprus law, EU law and international law.
The above should be used as a source of general information only. It is not intended to give a definitive statement of the law.
If you have a query or wish to receive further information, please contact us using [email protected]