In cases of an intent for acquisition of more than 25 per cent of the total number of stocks with voting right in a publicly listed company, the potential acquirer must adhere to the binding public offering procedure as prescribed in the Takeover Law. The procedure of public offering prescribes an obligation for notification for the intent to acquire, namely the potential acquirer would have to notify the management body of the target company, the Securities Exchange Commission, the Central Securities Depository and submit a notification to the Commission for Protection of Competition, and make a public announcement of the intent. Additionally, the potential acquirer would have to obtain prior approval for the public offer from the Securities Exchange Commission before its public announcement.
The mandatory regulations prescribe an obligation to pay administrative fees; however total amount of administrative fees of the procedure vary depending on the business activity of the target company (from €250 up to €2,000 or more).
It should be noted that the public offer is not compulsory in cases when the value of the transaction is less than €25,000 or the potential acquirer intends to acquire less than 25 per cent of the company’s basic share capital. The transaction made by way of a public offering is not performed on the stock exchange market, but directly in the Central Securities Depository.
When a business combination involves the merger of public companies, the procedure is quite similar and includes two phases: Phase I is the ‘Pre-registration’ or ‘Announcement’ phase, and Phase II concerns closing of the transaction - adoption of a decision for confirmation of the agreement by the shareholders’ assembly.
That is, after the transaction agreement has been signed (an agreement for merger of companies by the management bodies of the companies involved), a compulsory pre-registration procedure must be carried out. The parties are obliged to notify and report the conclusion of the agreement to the North Macedonian Stock Exchange reporting system immediately after the signing of the agreement.
During the Phase I procedure, the agreement shall be reviewed by one or more certified auditors. An auditor shall be appointed separately for each company by the management bodies of the companies that participate in the merger. However, the audit may be performed by one audit firm for all of the companies involved if appointed by the court upon their joint request.
One month prior to the adoption of decision for confirmation of the transaction agreement, the management bodies of the companies that concluded the agreement shall, no later than one month prior to the adoption of the final decision on the merger (adopted by the shareholders’ meeting), jointly publish a public announcement on the concluded agreement in the Official Gazette of the Republic of North Macedonia and in at least one daily newspaper. Where a company is aware of creditors whose claims exceed €10,000 in denar counter-value, each of them shall be notified separately in writing. Additionally, the conclusion of the transaction agreement must be registered in the Central Register of Trade Companies within the same term.
Once the agreement has been entered, a notice shall be published in the Official Gazette of North Macedonia stating that the pre-registration has been entered in the commercial register and that the agreement is available for inspection by any interested third parties (shareholders or creditors).
Additionally, within the same term (ie, at least 30 days prior to the scheduled shareholders’ meeting), the companies involved must make a public announcement and thereby, invite the shareholders’ to participate and to vote on the shareholders’ meeting.
Each company participating in the merger shall enable its shareholders to review the documents relevant to the merger for a period of at least one month prior the date on which the shareholders’ meeting is scheduled.
The Phase 2 procedure starts after expiry of the compulsory 30-day period, and thereby, the shareholders’ meetings of all companies involved shall adopt a decision for approval of the transaction agreement with a simple majority vote. The agreement shall become effective once the shareholders’ general meetings of the companies involved in the transaction approve it.
The procedure may be simplified, if the acquiring company owns at least 90 per cent of the parts or shares represented by the share capital of the target company in a way that the approval of the shareholders’ meetings shall not be required.
The merger procedure includes costs for administrative fees payable to the CTR ranging from of €10 to €150, depending on the subject of registration.
Note that if the business combination qualifies as a concentration pursuant to the Competition Law, a compulsory notification to the Competition Commission is required.
A concentration shall be deemed to arise where a change of control on a lasting basis results from the merger of two or more previously independent undertakings or parts of undertakings or the acquisition, by one or more persons already controlling at least one undertaking, or by one or more undertakings, whether by purchase of shares or assets, by contract or by any other means prescribed by an order of law, of direct or indirect control of the whole or parts of one or more other undertakings.
The following thresholds shall apply when the concentration is subject to compulsory notification to the Competition Commission:
- the aggregate income of all participating undertakings, generated by the sale of goods or services on the world market, was more than the equivalent of 10 million denar in the business year preceding the concentration and provided that at least one participant is registered on the territory of North Macedonia;
- the aggregate income of all participating undertakings, generated by sales of goods or services on the territory of North Macedonia in the business year preceding the concentration, is more than the equivalent of 2.5 million denar counter-value; or
- the market share of one of the undertaking participants exceeds 40 per cent or their joint market share on the market exceeds 60 per cent.
The administrative fees for notification in front of the Commission for Protection of Competition may vary from €100 to approximately €600.
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