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Merger Control Letter Of Intent Ws 2 Prep Task And Ws Tasks Notes

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Prep Task and WS Tasks

1. Factors impacting on the method of sale: a. Mergers are regulated in the UK by the Enterprise Act 2002 (EA 2002). However, where European Regulation 139/2004 applies (ie where the merger has a 'Community dimension') this overrides the UK legislation, or that of any other EU Member State. b. There are two options for the sale, a Private Sale and an Auction Sale. The choice depends on whether: c. ¿Is it a Public or a Private Co.? This is a Private Company. Auction Sale
- By S.755(1) CA 2006 Private Co.'s cannot offer shares for sale to general public. BUT,
- By s.756(3) and advertisement issued to specifically identified B's is the exception, BUT
- Note FSMA 2000

d. e. f. g.

Private Sale
- there are no restrictions on the company to be sold in a private sale.

¿How quickly do they want to do it?
¿Are the potential buyers serious about the purchase?
Confidentiality Agreement + Due Diligence Negotiating favourable terms within the SPA

2. Application of merger control regulation in the EU or the UK if the private sale proceeds:

1. Apply the EU Test: The EU Merger Regulation 139/2004 will apply to anasset/share/merger purchaseof a Pub or Priv Co. if it constitutes a concentration with a Community dimension:

Say

Apply

1. Merger of two or more independent undertakings:

¿Is there a Concentrat ion?
Under Art. 3 of EU Reg. 139/2004

¿Does The 2/3rdsRule apply?p.27 EU
¿Is there a Community Dimension
?

Comme nt YES

Or,

2. Acquisition of direct/indirect control of the whole or part of an undertaking or undertakings:
- Control means: more than just voting control it includes a situation where one party can exercise decisive influence over another (over 25% is being purchased)
- Acquisition means:a direct financial purchase by contract, a purchase of shares or securitiesor any other resources. If the main impact 2/3rdsof the merger is within one Member State, it will not have a Community dimension. It may be caught by national competition rules. If the 2/3rdsrule applies the commission will not have jurisdiction. Test 1 1. The Aggregate Worldwide turnover of all the parties exceeds €5,000m; and

2. The aggregate community-wide turnover of each of at least two of the parties exceeds Or,
€250m

YES

No

No

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