Practical approach to mergers and acquisitions in Finland

Practical approach to mergers and acquisitions in Finland Seppo Toivainen Helsingin Liikejuridiikka Oy www. finland-law. ru 31. 1. 2012

Helsingin Liikejuridiikka Oy l l Russian and Finnish personnel, understanding of both cultures l Finnish legal environment, business culture, M&A, finance and administration l 2 Assists russian companies to operate in Finland EU Even though Russia and Finland are neighbours, the differencies in business culture are huge. www. finland-law. ru 31. 1. 2012

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 3 www. finland-law. ru 31. 1. 2012

Buying a company from Finland Everything is possible… however, with two exceptions: 1. Act on Protecting Competition on the Market (948/2011) l Protects free competition against price fixing, market dominance and monopolies l 4 Acquisitions are seldom denied, they are re-negotiated (=restructured). Maybe 1 -2 cases per year. www. finland-law. ru 31. 1. 2012

Buying a company from Finland 2. Act on Monitoring Foreign Corporate Acquisitions (1612/1992) l Protects important national interests, practically: the defence sector l l The law will be updated during this year (EU harmonized) l 5 Strategic acquisitions have to be confirmed by the Council of State Acquisitions denied during the last 10 years: 0 (none) www. finland-law. ru 31. 1. 2012

Buying a company from Finland l l 6 In practise the Finnish legislation is not an obstacle foreigners’ corporate acquisition So, we can focus our efforts on real-life challenges. There are many of those, because… www. finland-law. ru 31. 1. 2012

Challenges ”Over 60% of corporate acquisitions fail” Why? l l l 7 Unrealistic expectations Inadequate background information Weak agreements Insufficient planning Unsuccessful take-over phase www. finland-law. ru 31. 1. 2012

A short acquisition check-list l l l l 8 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) www. finland-law. ru 31. 1. 2012

Acquisition, please remember: l l Choose a local advisor to quide you through the process l Do your ”homework” well, calculations, scenarios l Due Diligence – to avoid unpleasant surprises l Be careful with the agreement, special terms and conditions l 9 Take your time, do not rush Plan the take-over process well www. finland-law. ru 31. 1. 2012

Acquisition in Finland l l Foreign ownership is not restricted l Corporate taxes are among the lowest in OECD countries l Corporate legislation is modern and very streamlined l 10 Finland is a stable and secure environment for a company Добро пожаловать! www. finland-law. ru 31. 1. 2012

THANK YOU FOR YOUR ATTENTION! Helsingin Liikejuridiikka Oy Seppo Toivainen +358 40 5011266 +358 44 2232322 (по-русски) 11 www. finland-law. ru 31. 1. 2012