Here you may find a brief overview of the merger procedure, information about Merger (Accession) Agreement or Separation (Extraction, Transformation) Plan and overview of anti-monopoly regulations. For detailed information concerning M&A; transaction in Ukraine see Mergers, acquisitions and incorporation of a new company.
In general, the merger procedure contains following basic steps:
A merger is considered finished from the date of the introduction of an entry into the Unified State Register of Enterprises and Organizations of Ukraine (Unified State Register) concerning the liquidation of the merger participants and the registration of the newly created legal successor.
Merger (Accession) Agreement or Separation (Extraction, Transformation) Plan
The supervisory council of every company participating in an M&A; transaction must draw up the terms and conditions of either the merger (accession) agreement or separation (extraction, transformation) plan.
Without regard to the type of transaction, the agreement or plan must include, at a minimum, the following:
Besides aforesaid the supervisory council of each participant must prepare for its shareholders an explanation of the terms and conditions of the merger (accession) agreement or separation (extraction, transformation) plan. This explanation is required to include the appraisal value of the company’s assets and a calculation of the coefficient of the conversion of shares of stock and other securities, in other words – the economic substantiation of the transaction.
A conclusion of an independent expert (auditor, appraiser), concerning the terms and conditions of the proposed transaction, must be obtained by the supervisory council in case when a participating company has over 100 ordinary shareholders. This conclusion is required to include an evaluation of the substantiality and adequateness of the methods applied to the share conversion calculation and appraisal of property.
After preparing all necessary documents the supervisory council must send these materials to the shareholders. These documents must contain the draft merger (accession) agreement or separation (extraction, transformation) plan, if necessary – the conclusion of the independent expert, an explanation of the terms and conditions of the agreement or plan, and, in case of a merger or accession, the annual financial report of the other participating companies for the past three years.
According to Ukrainian legislation, mergers and acquisitions are considered a concentration and are subject to prior approval by the Anti-Monopoly Committee of Ukraine (AMC). The AMC is responsible for preventing monopolies from abusing their dominant position and/or restricting market competition.
Approval of the AMC may be required in respect of mergers, acquisitions of shares and incorporation of a new company, in the following cases:
A merger or acquisition that is subject to approval by the Anti-Monopoly Committee of Ukraine cannot be concluded until such approval has been granted.
Also Ukraine’s legislation provides for specific rules to apply to M&As; in particular sectors of the economy. Especially, there are certain restrictions concerning companies recognized as monopolies, including natural monopolies.
Only Ukrainian citizens, Ukrainian legal entities, the President of Ukraine and the Verkhovna Rada have the right to establish radio and TV broadcasting companies in Ukraine. Foreign investment in domestic TV and radio broadcasters is limited to 30 % of the authorized capital of an existing company. Foreign investments in radio and TV broadcasters are subject to the approval of the National Radio and Television Council of Ukraine.
Print media can be established by Ukrainian as well as by foreign citizens and companies. But neither a company nor an individual citizen may establish or control more than 5 % of socio-political print media in Ukraine.
The activity of commercial banks in Ukraine is regulated by the National Bank of Ukraine. Any type of reorganization of commercial banks, including mergers and acquisitions is subject to approval of the NBU.
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