In 2023, despite the problems associated with the coronavirus pandemic, activity in the field of mergers and acquisitions in Ireland continues. Ireland is often associated with such a concept as "offshore jurisdiction", which is erroneous. This is a country with favorable tax conditions which can be tax-free for non-residents. Therefore, the country continues to be an attractive destination for foreign investors.
Selling shares in Ireland remains consistently popular. American and British investors continue to be active in the Irish M&A market, despite some uncertainty over US tax reforms and Brexit. Ireland is a member of the EU and this makes it possible to use the benefits specified in the EU Directives.
Private companies acquisition and sale in Ireland
Selling and buying Irish private companies usually begins with negotiations between buyer and seller. A sale normally involves a seller-controlled auction in which a number of potential buyers participate. A two-way sales process includes:
- conclusion of a confidentiality agreement and may also include an exclusivity agreement;
- due diligence of the target Irish company, when the buyer is given access to information about its operations and financial status;
- revision and conclusion of the entire agreement.
In the auction plan, a letter issued by or on behalf of the seller will provide potential buyers with information on how the process will proceed (for example, access to supplier due diligence reports, indicative bids, detailed agreement on final results).
Typically, it takes several months to finalize a deal but it could be much longer depending on the deal complexity. The deal time schedule will also be affected by permissions that may be required from the regulating bodies.
The Irish laws generally govern agreements for the sale and purchase of shares in an Irish company. However, it is possible that the contract is governed by the laws of other jurisdictions. In this case, the Irish legal requirements for the sale still apply as a whole and must be respected.
Due diligence of M&A deals in Ireland are obligatory. This is a series of measures to form an objective view of the target object. At the same time, not only a legal entity, but also rights of claim, a land plot or a real estate object can act as such an object.
In conducting due diligence, as a rule, the investor is interested, that is, the one who is going to buy or invest money in this or that company. When making a deal, especially a large one, it is very important to have comprehensive information about the object of financing, its real value and possible legal and tax consequences.
The overall goal of due diligence is to reduce existing business risks or completely avoid them, including the risk of acquiring a block of shares at an overvalued value, failure to fulfill obligations, the risk of losing money or property.
The number of persons interested in conducting due diligence in Ireland, in addition to external investors, includes the company's shareholders, as well as its top managers. The indicators obtained as a result of verification can subsequently help in the preparation of a securities issue or the development of a mechanism to protect against a hostile takeover.
There are no restrictions on foreign ownership, and this is really good news for those considering starting an M&A transaction in Ireland. You will just need to obtain approval from the Irish Competition Commission if certain financial thresholds are met. These thresholds are met when in the last financial year, the turnover of each of the participating companies was at least EUR 10 million.
If you are planning to start an M&A transaction in Ireland, additional documents may be required, including:
- lease documentation;
- licenses for intellectual property;
- safety documentation.
In some cases, permission from the Central Bank of Ireland may also be required for certain banking and insurance transactions.
The specialists of our company provide clients with comprehensive assistance in registering a foreign private company in Ireland, provide advice on minimizing risks in Irish M&A transactions. Our seasoned professionals conduct legal due diligence of a business or individual assets to attract investments, sell companies, transfer business assets as collateral. Reach out to us using the feedback form below.