Acquisition of shares
Depending on the type of share transfer different formalities must be observed.
As a first step, in case of a voluntary takeover bid, the bidder must obtain approval from the Financial Supervision Authority (FSA), for the preliminary announcement regarding the offer. Further to receiving the approval from the FSA, the bidder will publish the preliminary announcement in a local and national newspaper and send it to the target company and to the relevant stock exchange market.
Moreover, the target’s board of directors will draft within five business days a report evidencing its input on the offer which will include matters such as consequences on the company’s interest, jobs, the strategic plan of the bidder etc. This document will be further communicated to the FSA, the bidder, the stock exchange market and the target’s employees.
In 30 business days further to publishing the announcement, the bidder will submit to the FSA the documents for the approval of the offer document.
Subsequent to obtaining the approval of the offer document, the announcement concerning the offer can be published in two daily national newspapers. The offer document can be made available via the following means: by being published (i) in one or more national newspapers, (ii) in electronic form on the bidder’s website and on the broker’s website, or (iii) in electronic form on the website of the market operator, etc.
In seven business days of the closing date of the offer, the bidder notifies the FSA, the stock exchange market and the central depository of the results which will be further published on the website of the stock exchange.
The same undertakings apply in the case of mandatory takeover bids or regular purchase offers with the exception regarding the requirement of the board of directors to draft a report regarding the consequences of the targeted operations.
The FSA or the Bucharest Stock Exchange withhold specific fees for operations such as public purchase offers, mandatory or voluntary takeover bids, which are set considering the value of the transaction. Additionally, the approval of the prospectus or the offer documents by the FSA or publishing documents with the Official Gazette or newspapers are subject to administrative fees.
Acquisition of business or assets
In the process of acquiring a business or assets, special attention needs to be paid to immovable assets. According to the provisions of the Civil Code, the transfer of ownership right over immovable assets has to be signed before a public notary. Moreover, to ensure that the operation is valid towards third parties, the agreement must be registered in the Land Book.
Concluding an immovable assets purchase agreement in front of a public notary is subject to specific notary fees. Moreover, the registration in the Land Book of the sale purchase agreement is subject to registration fees. The notary fees and registration taxes add up to approximately 1 per cent on the value of the transaction.
No specific fees must be paid for the sale purchase agreement of movable assets (except for special regime movable assets such as vehicles, where administrative fees apply).
Mergers and spin-offs
The directors of the companies will draft the merger or spin-off terms that are registered with the Trade Registry and then publish it in the Official Gazette of Romania (or on the website of the companies). Further to the publishing, a 30-day creditors’ opposition term must be observed.
The directors draft a report explaining and justifying the merger or spin-off terms and the legal and economic grounds of the process.
One month prior to the shareholders’ meeting deciding on the merger or spin-off, the directors make available to the shareholders information regarding the merger or spin-off terms; the directors’ report (if any); the independent experts’ report (if any), the annual financial statements and management reports drafted for three years prior to the merger.
According to the capital market regulation, listed companies have the obligation to submit within 24 hours to the FSA and the stock exchange a report concerning either the preliminary resolution of the Extraordinary General Meeting of Shareholders (EGMS) approving the merger or spin off (if applicable) or the publishing of the merger or spin-off project in the Official Gazette. This report shall also be published in a national newspaper.
In the second phase of such operation, the shareholders approve the merger or spin-off and the documentation is subsequently submitted with the relevant court for final approval and registration.
Administrative fees will be charged for the registration with the Trade Registry of the aforementioned operations as well as for publishing of the relevant documents in the Official Gazette. If the aforementioned operations entail a transfer of immovable assets between the companies involved in a merger or spin-off, a tax of approximately 1 per cent on the book value of the immovable assets will apply.
Approval from the Romanian Competition Council (RCC)
Control by the Romanian Competition Council
Under Romanian Competition Law, an economic concentration (meaning any acquisition of control over an undertaking by means of share or asset deals or joint ventures) is subject to control and must be notified to the Romanian Competition Council (RCC) prior to its implementation (and in case of public undertakings after the announcement of the public offer), if the following conditions are cumulatively met:
- the combined aggregate turnover (for the year prior to the economic concentration) of all the undertakings concerned is more than the Romanian leu equivalent of €10 million; and
- the turnover in Romania of each of at least two of the undertakings concerned (for the year prior to the economic concentration) is more than the Romanian leu equivalent of €4 million.
The undertakings concerned are required to abide by the standstill obligation until a competition clearance is achieved. Non-observance of this standstill obligation is sanctioned with a fine of up to 10 per cent of the turnover achieved by the undertaking in default in the year prior to the sanctioning decision.
However, the standstill obligation does not impede the implementation of a public offer or of a series of securities transactions (including securities convertible into other types of securities) accepted for trading on a market such as the stock exchange, through which control is acquired from different sellers. Such transactions may be put into effect until clearance is obtained, provided that the following conditions are cumulatively met:
- the economic concentration must be notified without delay to the Competition Council, according to the legal provisions; and
- the acquirer of control must not use the voting rights associated with the securities in question (or only do so in order to preserve the full value of his investment on the grounds of a derogation granted by the Competition Council).
The procedure for obtaining a derogation from the competition authority must be observed (ie, the Competition Council may grant, upon prior request, a derogation from the standstill obligation). The request must be motivated by the party seeking it, and the Competition Council may decide to grant the derogation conditional upon the completion of certain conditions and obligations in order to ensure effective competition on the market. A derogation may be granted either before or after the notification has been made.
The notification process requires the notifying party (in general it is the acquirer of control, but in the specific case of public offers it is the one making the public offer who has this obligation) to submit a specific form to the RCC, in either its simplified or complete version, and the RCC then reviews the information received. While the procedure and the legal deadlines for the simplified or the complete form are the same, the simplified notification form requires less data and information, thus speeding up the RCC’s processing and time response. The complete notification form will require more detailed information and data and it will also entail a more in-depth analysis from the RCC. The focus of the RCC is mainly on market position, market structure, nature of the products, barriers to entry, size of competitors and other competition-related criteria.
The time frame for obtaining a formal decision from the RCC usually is of two to three months, but this is highly dependent on the manner in which the notification file is completed. Also, the time frame can be shortened or lengthened considering the impact of the economic concentration on the relevant market and any sensitive issues related to the economic concentrations, etc. Economic concentrations that could give rise to or strengthen a dominant position, or otherwise concern oligopolistic markets may trigger competition investigations or proceedings related to commitments, in which case the estimated time frame for the processing of an economic concentration file ranges from six months to over a year.
The following fees will apply:
- a notification fee of approximately €1,000, which is required when the notification file is submitted; and
- an authorisation fee amounting to a sum between €10,000 and €25,000 and which is calculated based on the turnover of the undertaking concerned in the year prior to the notified transaction.
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