The main piece of legislation governing M&A transactions in the Republic of Cyprus is the M&A Control Act. M&A deals involving major corporations & transfer of substantial financial resources must be reported to the regulator (the CPC) prior to their conclusion.
The prerequisite for obtaining permission for concluding an M&A deal in the Republic of Cyprus is the drafting of a relevant agreement or publication of information on the purchase of a controlling stake in a Cypriotic company in a print media outlet. When it comes to takeovers, a notification containing details of an upcoming transaction must be sent to the regulator. Conducting a transaction (either partially or fully) without getting the regulator’s authorization is punishable by administrative penalties.
As mentioned earlier, parties (either individually or jointly) must send a written notification of a large concentration to the regulator .In all other cases, the responsibility for notifying the regulator lies with a company acquiring control. The filing fee is set at one thousand euros. If conducting an M&A transaction in the Republic of Cyprus requires launching an indepth investigation (Stage II), participants must pay a fee of six thousand euros.
Once a notification is sent and a filing fee is paid, the regulator must inform the applicant(s) of whether a transaction has been authorized (normally, within thirty days). If no response is received by the required deadline, it can be extended by 2 more weeks.
Prior to extending the deadline, the regulator must notify the participants of its intention (normally, within seven days).
Prior to launching an investigation into an M&A transaction in the Republic of Cyprus, the regulator must notify the participants of its decision (normally, within 120 days after receipt of notification or supplementary information). Conducting a transaction (either partially or fully) without obtaining authorization is punishable by a fine of up to ten percent of the total turnover achieved in the preceding fiscal year.
The regulator may temporarily authorize a transaction if the participants can prove that they will incur substantial financial losses due to the delay in getting permission.
Cyprus: Initiating an M&A Deal
Acquiring a controlling stake in a Cypriotic company requires notifying the regulator (before & after a transaction). A notification must be in Greek & sent together with:
- copies of transaction-related documents;
- an application copy;
- copies of participants’ financial reports, including audited ones;
- copies of transaction-related reports;
- copies of studies assessing a transaction (in terms of the competition & markets involved);
- transaction-related information (nature, volume, structure & participants' turnover);
- relationships between participants & other enterprises (including shares in the respective markets);
- analysis of the respective markets.
Failure to provide the said documents is punishable by a fine of up to fifty thousand euros. A fine is also imposed for providing inaccurate or misleading information.
- Stage I
- preparing & submitting a written notification to the regulator;
- assessment of a transaction by the regulator;
- making a decision by the regulator.
- Stage II
- preparing a report of the findings (within 120 days after receiving a notification),
- paying a fee (if an indepth investigation is required);
- informing participants of a decision made.
Considering concluding an M&A deal in the Republic of Cyprus? Need advice on M&A regulation in the Republic of Cyprus? Why not contact IQ Decision UK?