Acquisitions 2020

of Law

Sujets

• Droit et juridique
• Corporate law

Informations

• Publié par: College of Law Publishing
• Date de parution: 01 janvier 0001
• Nombre de lectures: 0
• EAN13: 9781913226350
• Langue: English

Extrait

ACQUISITIONS

Published by
College of Law Publishing,
Braboeuf Manor, Portsmouth Road, St Catherines, Guildford GU3 1HA
© The University of Law 2020
All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any way or by any means, including photocopying or recording, without the written permission of the copyright holder, application for which should be addressed to the publisher.
British Library Cataloguing-in-Publication Data
A catalogue record for this book is available from the British Library.
ISBN 978 1 913226 23 7 EISBN 978 1 913226 35 0
Typeset by Style Photosetting Ltd, Mayfield, East Sussex
Tables and index by Moira Greenhalgh, Arnside, Cumbria
Preface
This book is designed to provide an introduction to the legal and taxation implications of buying and selling a business enterprise either by purchase of a business as a going concern by purchasing all of its assets, or by acquiring the entire issued share capital of a private company. The book highlights the various areas of the law that may fall to be considered during an acquisition transaction, focusing on the issues and legislative provisions which are most commonly relevant, and taking in the extra considerations where the transaction is an international one.
In the writing of this edition, no account has been taken of the possible impact on legislative and regulatory matters of the UK’s expected departure from the European Union (EU) on 31 October 2019. Article 122 of the draft withdrawal agreement between the UK and the EU dated 19 March 2018 provides that EU law will continue to apply in the UK until 31 December 2020, subject to certain limited exceptions. Even if a final withdrawal agreement is not agreed between the UK and the EU, UK regulations derived from EU legislation will remain applicable unless and until changes are made by the UK Parliament.
Part I of the book deals with factors relevant when planning an acquisition, and Part II provides detailed explanations of the main terms of agreement and how those terms may vary according to the type of transaction. Part III examines the particular concerns specific to an asset purchase and a share purchase, as well as issues relevant where the target is, or is to become, part of a corporate group. There is also a chapter highlighting the main implications for an acquisition transaction of private equity funding.
Although many of the principles described are of general application to all acquisition transactions, it is worth noting that this book does not attempt to deal with the different procedures and additional obligations involved where the seller, the buyer or the target company is a public company listed on the Stock Exchange. For a detailed explanation of those further issues, the reader is referred to Public Companies and Equity Finance .
It is hoped that as an illustration of the main principles of acquisitions work this book will prove a useful guide for trainee solicitors in corporate seats, and for lawyers and advisers in other areas of commercial practice who may find themselves called upon from time to time to form part of an often extensive acquisitions team. The fundamentals of international acquisitions are considered by reference to the law and practice of England and Wales, but with comparisons and references to the variety of differing approaches taken in other jurisdictions. This book provides a flavour of international law and practice in the area, rather than attempting to provide a comprehensive guide to the practice in all jurisdictions. Lawyers requiring in-depth consideration of the practice in particular jurisdictions outside the UK should consult more detailed sources.
In the interests of brevity, the masculine pronoun has been used throughout to include the feminine.
The law is stated as at 1 August 2019.
Contents
PREFACE
TABLE OF CASES
TABLE OF STATUTES
TABLE OF SECONDARY LEGISLATION
TABLE OF ABBREVIATIONS
Part I PLANNING AN ACQUISITION
Chapter 1 TYPES OF ACQUISITION
1.1 Introduction
1.2 Types of acquisition
1.3 Factors affecting choice of acquisition
1.4 Pre-sale restructuring
Chapter 2 THE ACQUISITION PROCESS
2.1 Role of advisers
2.2 European merger control
2.3 Procedural overview
2.4 Methods of sale
2.5 Pre-contractual documentation
2.6 Summary of procedure for conditional contracts by private sale
Chapter 3 INVESTIGATING THE TARGET
3.1 What are the buyer’s objectives?
3.2 Types of due diligence
3.3 Scope of legal due diligence
3.4 Undertaking a due diligence investigation
3.5 Common areas of investigation
3.6 Due diligence reports
Part II THE TERMS OF THE ACQUISITION
Chapter 4 THE SALE AND PURCHASE AGREEMENT
4.1 Structure of the agreement
4.2 Parties
4.3 Operative provisions
4.4 Schedules
4.5 Execution
Chapter 5 ALLOCATION OF RISK: BUYER’S PROTECTION
5.1 Introduction
5.2 Protections implied into the contract
5.3 Full or limited title guarantee
5.4 Warranties
5.5 Representations
5.6 Indemnities
5.7 Tax consequences in the UK of payments under warranties and indemnities
5.8 Who gives warranties and indemnities?
5.9 Buyer’s security for breach
5.10 Restrictions on the seller
Chapter 6 ALLOCATION OF RISK: SELLER’S LIMITATIONS
6.1 Limiting the scope of warranties, representations and indemnities
6.2 Limitations on claims
6.3 Disclosure
6.4 Insuring against liability
Chapter 7 COMPLETING THE ACQUISITION
7.1 Reasons for conditionality
7.2 Risk allocation on conditional contracts
7.3 Completing an acquisition
7.4 Post-completion matters
Part III VARIATIONS
Chapter 8 ASSET ACQUISITIONS
8.1 Agreeing what to transfer
8.2 Transfer of assets
8.3 Protection of employees
8.4 Taxation in the UK
Chapter 9 SHARE ACQUISITIONS
9.1 The transfer of shares
9.2 Regulatory provisions in the UK
9.3 Acquiring tax liabilities
9.4 Taxation on a share acquisition in the UK
Chapter 10 PRIVATE EQUITY ACQUISITIONS
10.1 Private equity overview
10.2 Management buyout
10.3 Institutional leveraged buyout
10.4 Key documentation
Chapter 11 GROUP REORGANISATIONS
11.1 Introduction to group companies
11.2 Overview of group reorganisations
11.3 Regulatory issues on intra-group transfers in the UK
11.4 Tax implications of intra-group transfers in the UK
INDEX
Table of Cases Numerics 116 Cardamon Ltd v MacAlister [2019] EWHC 1200 (Comm) 100 A Allen v Amalgamated Construction Co Ltd [2000] IRLR 119 137 Aveling Barford v Perion Ltd [1989] BCLC 626 198 B BBC Worldwide Ltd v Bee Load Ltd [2007] EWHC 134 39 Berriman v Delabole Slate Ltd [1985] IRLR 305, CA 143 Botzen v Rotterdamsche Droogdok Maatschappij BV [1986] 2 CMLR 50, ECJ 139 Briggs v Oates [1991] 1 All ER 411 58 , 170 Brookes v Borough Care Services and CLS Care Services Ltd [1998] IRLR 636 137 C Caparo Industries plc v Dickman [1990] 2 WLR 358 66 Carisway Cleaning Contracts Ltd v Richards (EAT/629/97, 19 June 1998) 139 Cavendish Square Holding BV v Talal El Makdessi [2015] UKSC 67 86 Charterbridge Corporation v Lloyds Bank Limited [1970] Ch 62 198 Crystal Palace FC & Another v Kavanagh & Others [2013] EWCA Civ 1410 143 D Dr Sophie Redmond Stichting v Bartol [1992] IRLR 366 136 Duncan Webb Offset (Maidstone) Ltd v Cooper [1995] IRLR 633 139 E Eurocopy plc v Teesdale [1992] BCLC 1067 107 F Faccenda Chicken Ltd v Fowler [1986] IRLR 69, CA 58 , 170 G General Billposting Co Ltd v Atkinson [1909] AC 118, HL 58 , 170 Green v Elan Care Ltd [2002] All ER (D) 17 143 H Hadley v Baxendale (1854) 9 Exch 341 85 Hynd v Armstrong [2007] IRLR 338 143 I Infiniteland Ltd v Artisan Contracting Ltd [2005] EWCA Civ 758 106 , 107 K Kason Kek-Gardner Ltd v Process Components Ltd [2017] EWCA Civ 2132 50 L Levison v Farin [1978] 2 All ER 1149 106 Litster v Forth Dry Dock and Engineering Co Ltd [1989] IRLR 161 138 M MAN Nutzfahrzeuge AG v Freightliner Ltd [2005] EWHC 2347; [2007] EWCA Civ 910 107 , 108 Marks & Spencer plc v Halsey (Inspector of Taxes) [2007] EWCA Civ 117 201 Marren (Inspector of Taxes) v Ingles [1980] 3 All ER 95 78 , 179 Morgan Crucible plc v Hill Samuel and Co Ltd [1991] 2 WLR 665 67 N New ISG Ltd v Vernon [2007] EWHC 2665 (Ch) 140 P Parkwood Leisure Ltd v Alemo-Herron [2010] EWCA Civ 24 141 Petromec Inc Petro Deep Societa Armanmento SpA v Petroleo Brasilerio SpA [2005] EWCA Civ 891 39 Procter (Inspector of Taxes) v Zim Properties Ltd [1985] STC 90 175 R R v Innospec [2010] EW Misc 7 (EWCC) 64 Radiant Shipping Co and Sea Containers [1995] CLC 976 39 Rolled Steel Products (Holdings) Ltd v British Steel Corporation [1986] Ch 246 198 Ronbar Enterprises Ltd v Green [1954] 2 All ER 266 96 S Secretary of State for Trade and Industry v Cook [1997] ICR 288, EAT 139 Shepherd (Inspector of Taxes) v Law Land plc [1990] STC 795 202 Spijkers v Gebroeders Benedik Abattoir CV [1986] ECR 1119 136 Stirling District Council v Allan [1995] IRLR 301 145 Stobart Group Ltd v William Stobart [2019] EWCA Civ 1376 103 T Teoco UK Ltd v Aircom Jersey 4 Ltd [2018] EWCA Civ 23 103 Tillman v Egon Zehnder [2019] UKSC 32 58 , 96 , 170 Trego v Hunt [1896] AC 7 94 W Walford v Miles [1992] 2 WLR 174 38 Werhof v Freeway Traffic Systems GmbH [2006] IRLR 400 141 West Mercia Safetywear Ltd v Dodds [1988] BCLC 250 198 Wheeler v Patel [1987] IRLR 211 143 Whent v T Cartledge Limited [1997] IRLR 153 141
Table of Statutes
Bribery Act 2010 64
Civil Liability (Contribution) Act 1978 92
ss 1–2 92
Companies Act 1985 7 , 120
s 151 172
s 319 169
Companies Act 2006 7 , 16 , 164 , 171 , 172 , 194 , 195
s 87 120
s 112 118
s 128B 117
s 136 194
s 168 169
s 172 174 , 198
s 177 173
s 188 118 , 169 , 174
s 190 115 , 118 , 173 , 186 , 187 , 194
s 190(4)(b) 194
s 197 194
s 216(2) 174
s 219 174
s 252(2)(a) 173
s 252(2)(b) 173
s 253(2)(c) 173
s 254 186
s 254(2) 186
s 254(2)(a) 173
s 550 53 , 120
s 551 120
s 555 120
s 561 53
s 641(2A) 7
Pt 18 (ss 658–737) 172
s 6