practical approach to mergers and acquisitions in finland seppo toivainen helsingin liikejuridiikka...

Practical approach to mergers and acquisitions in Finland

Seppo Toivainen

Helsingin Liikejuridiikka Oy

www.finland-law.ru 31.1.20122

Helsingin Liikejuridiikka Oy

Assists russian companies to operate in Finland and EU

Russian and Finnish personnel, understanding of both cultures

Finnish legal environment, business culture, M&A, finance and administration

Even though Russia and Finland are neighbours, the differencies in business culture are huge.


Buying a company from Finland

MAIN RULE:

Anybody can establish a company in Finland (Oy, ”LLC”, ”Ltd”)

Anybody can buy, sell and own shares of a Finnish company

Anybody=anybody from anywhere



Everything is possible… however, with two exceptions:

1. Act on Protecting Competition on the Market (948/2011)

Protects free competition against price fixing, market dominance and monopolies

Acquisitions are seldom denied, they are re-negotiated (=re-structured). Maybe 1-2 cases per year.



2. Act on Monitoring Foreign Corporate Acquisitions (1612/1992)

Protects important national interests, practically: the defence sector

Strategic acquisitions have to be confirmed by the Council of State

The law will be updated during this year (EU harmonized)

Acquisitions denied during the last 10 years: 0 (none)



In practise the Finnish legislation is not an obstacle for foreigners’ corporate acquisition

So, we can focus our efforts on real-life challenges. There are many of those, because…


Challenges

”Over 60% of corporate acquisitions fail”

Why?

Unrealistic expectations Inadequate background information Weak agreements Insufficient planning Unsuccessful take-over phase


A short acquisition check-list

Search possible candidates for acquisition (first contacts, in Finnish!) Non-disclosure-agreement (NDA), Letter-of-intent (LOI) Financial analysis and calculations (local financial specialist) Agreement negotiations, special T & C, milestones (recommended) Plan your ownership structure (many possible variants) Tax consequences (depends on the form of acquisition) Price estimates based on calculations Due Diligence Contacts to banks and financial institutions (sometimes a deal breaker!) Contacts to key employees, personnel issues, EU regulations A shareholders’ agreement (a must!) Payments always via bank transfer (”money laundering” regulations) Plan the take-over phase carefully (respect local culture)


Acquisition, please remember:

Take your time, do not rush

Choose a local advisor to quide you through the process

Do your ”homework” well, calculations, scenarios

Due Diligence – to avoid unpleasant surprises

Be careful with the agreement, special terms and conditions

Plan the take-over process well


Acquisition in Finland

Finland is a stable and secure environment for a company

Foreign ownership is not restricted

Corporate taxes are among the lowest in OECD countries

Corporate legislation is modern and very streamlined

Добро пожаловать!


THANK YOU FOR YOUR ATTENTION!

Helsingin Liikejuridiikka OySeppo Toivainen+358 40 5011266

+358 44 2232322 (по-русски)

practical approach to mergers and acquisitions in finland seppo toivainen helsingin liikejuridiikka...

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