Local Mergers

A private company may proceed to a joint venture, a merger or an acquisition with any other company or companies when the restructuring plan provides for the transfer of the business or property of the transferring company to another company. In accordance with the provisions of the Companies Law (Cap. 113), the following procedure must be followed prior to the two or more companies merge:

As long as there is a relevant provision in the Articles of Association of the company that allows for a merger, the directors of the companies must prepare the restructuring plan according to the provisions of the Companies Law. It follows that a petition to Court must be submitted to request the convening of a general meeting of the shareholders of the company to approve the restructuring plan by way of a resolution. Once the restructuring plan is approved by the shareholders as well as by the creditors of the company, a second petition must be submitted to the Court to request the Court’s approval of the restructuring plan. The procedure is finalised once the Court judgement is submitted at the Registrar of Companies in Cyprus, which will in turn discontinue the companies absorbed through the merger.

Cross-Border M&A

Every company that is incorporated in the Republic of Cyprus may participate in a cross-border merger, with the exception of companies limited by guarantee and companies under liquidation. A cross-border merger is the merger of companies that have been incorporated in the EU or the EEA, provided that at least two of these companies are governed by the law of different member states. Such cross-border mergers may take the form of an acquisition, an amalgamation, or an absorption.

A cross-border merger that takes the form of an acquisition, an amalgamation or an absorption, and at least one of the merging companies is a Cypriot company or the company that is created from the merger is a Cypriot company, is subject to the following requirements. In order to begin the cross-border procedure between companies, the directors of each of the Cypriot companies that take place in the cross-border merger as well as the competent administrative organ of the company/ies that are incorporated in EU/EEA member states and participate(s) in the cross-border merger must prepare a common plan for the cross-border merger and filed it with the Registrar of Companies, along with the requisite accompanying documentation.

Alongside the filing of a common plan for the cross-border merger with the Registrar of Companies, each of the merging companies must prepare a directors’ report and an independent expert’s report, which must be put before the members at least a month before the intended date of calling a general meeting to approve the cross-border merger.

Following the approval of the cross-border merger by the members at the general meetings of each of the merging companies, every Cypriot company files an application at the appropriate District Court for the issuing of a Court Order approving the completion of the cross-border merger. This application is accompanied by a pre-merger certificate that the merging companies incorporated in EU/EEA member states obtain and forward to the Cypriot acquired / absorbed / newly-incorporated company, as the case may be. Following the issuing of the Court Order, every merging Cypriot company files the Court Order with the Registrar of Companies, along with the required accompanying documentation.

In cases where the completion of the cross-border merger results in the incorporation of a new company in the Republic of Cyprus, the above procedure is supplemented with the procedure for the incorporation of a company in Cyprus and a copy of the Court Order will accompany the memorandum of the newly-incorporated company.

The Registrar of Companies proceeds to publishing the announcement of the completion of the cross-border merger in the Official Gazette of the Republic of Cyprus and to issuing the Merger Certificate or the Certified Memorandum and Articles of Association along with the Court Order, depending on the nature of the merger.

Merger Control

The Law relating to the Control of Concentrations Between Undertakings (Law 83(I)/2014) governs the control of concentrations between undertakings in Cyprus, in line with the EC Merger Regulation 139/2004. The competent independent authority entrusted with the implementation of this Law is the Commission for the Protection of Competition of the Republic of Cyprus (the Commission), which declares whether a concentration is compatible or incompatible with the functioning of competition in the market.

A transaction is deemed to be of major importance if it meets certain jurisdictional thresholds, thereby falling within the scope of application of Law 83(I)/2014, which requires the filing of the proposed concentration to the Cyprus Commission for the Protection of Competition for clearance.

The Republic of Cyprus has a comparatively low jurisdictional threshold requirements compared to those of other European Union member states. In fact, a concentration of undertakings is deemed to be of major importance if:

  • the aggregate turnover achieved by at least two of the participating undertakings exceeds (in relation to each one of them) €3.5 million;
  • at least two of the participating undertakings achieve a turnover within the Republic of Cyprus; and
  • at least €3.5 million of the aggregate turnover of all participating undertakings is achieved within the Republic of Cyprus.

The Law 83(I)/2014 further vests the power to the Minister of Energy, Commerce and Industry to declare a concentration as a concentration of major importance and thereby falling within the scope of the Law, even though the jurisdictional thresholds are not met.

Coinciding laws

Joint ventures, mergers and acquisitions require the engagement of knowledgeable and skilful professionals, who will assess the application and advise on the compliance of the entities concerned with other coinciding legal requirements. Although the application of such legal requirements is largely  dependent on the transaction(s) in question, one or more of the following laws may be applicable: The Income Tax Law of 2002 (Law 118(I)/2002), as amended; The Provision for Public Takeover Bids for the Acquisition of Securities of Companies and Related Matters Law of 2007 (Law 41(I)/2007), as amended; The Cyprus Securities and Stock Exchange Law of 1993 (Law 14(I)/1993), as amended; The Transparency Requirements (Securities Admitted on a Regulated Market) Law of 2007 (Law 190(I)/2007), as amended; The Market Abuse Law of 2016 (Law 102(I)/2016); and The Safeguarding and Protection of Employees Rights in the Event of the Transfer of Undertakings, Businesses or Parts Thereof Law of 2000 (Law 104(I)/2000), as amended.

Our M&A Practice Portfolio

At ServPRO, we advise our clientele in all aspects relating to M&A transactions providing them with a comprehensive set of services tailored to meet each client’s needs. Indicatively, we assist our clients in devising their business’ restructuring plan and apply on their behalf to the competent Court of the Republic of Cyprus to secure a Court Order approving the restructuring plan, which is a mandated step prior to the notification to the Department of Registrar of Companies and Intellectual Property (DRCIP) of the Republic of Cyprus. In addition, we always conduct a case-by-case assessment of any and all coinciding legal requirements, which may need to be complied with to ensure that the transaction in question is legitimate in all its aspects and pursue the best possible outcome for our clients’ interests.

Moreover, for those concentrations that are deemed of major importance, falling within the scope of the Law 83(I)/2014, we advise and undertake on behalf of our clientele the entire process of preparation, drafting and filing process for concentrations of major importance to the Commission in order to secure the requisite approvals. Our spherical approach in undertaking the entire process before the Commission affords our clients with peace of mind, knowing that they can entrust us to handle the case on their behalf.



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