Olivier Clevenbergh, Gisèle Rosselle and Thomas Pouppez of Strelia assess the M&A regulatory framework in Belgium


1.1 What have been the key recent M&A trends or developments in your jurisdiction?

In 2015 the Belgian public M&A market was dominated by a few landmark transactions. These include: the announced merger between Delhaize and Ahold; the acquisition of Base by Liberty Global (Telenet); and the acquisition of SABMiller by AB Inbev. Most of these transactions will close in 2016. Most of the public offerings launched in 2015 were done voluntarily by controlling shareholders with a view to taking the target companies private.

1.2 What is your outlook for public M&A in your jurisdiction over the next 12 months?

The legal environment for public M&A is expected to remain stable in 2016. However, the impact that the speculation tax will have on market is uncertain (see section 5.1).


2.1 What legislation and regulatory bodies govern public M&A activity in your jurisdiction?

In addition to the Belgian Companies Code, which sets out general corporate principles and merger rules, public M&A activity in Belgium is mainly governed by the law of April 1 2007 on public takeover bids and its executing royal decree of April 27 2007. The Financial Services and Markets Authority (FSMA) supervises and enforces the public takeover rules.

Competition law aspects of public M&A are governed by EU competition laws and book IV, chapter 2 of the Belgian Economic Law Code, which sets out Belgian rules on competition. The Belgian Competition Authority monitors compliance with these rules.

2.2 How, by whom, and by what measures, are takeover regulations (or equivalent) enforced?

The FSMA is primarily responsible for supervising the financial markets and listed companies, and for monitoring companies' compliance with public takeover rules.

If a company violates any public takeover rules, the FSMA may require additional information, suspend or prohibit a public offering, carry out inspections, and impose fines. Any measure executed by the FSMA that could lead to a public takeover or affect a public takeover may be challenged before the Court of Appeal of Brussels.


3.1 What are the basic structures for friendly and hostile acquisitions?

A mandatory or voluntary public offering (in a friendly or hostile context) can be structured as: a tender offering whereby the consideration for the acquired shares is in the form of cash; an exchange offer whereby the consideration is in the form of securities and supplemented by a limited amount of cash (equivalent to a maximum of 10% of the shares' value for an exchange offering); or a merger which will lead to an exchange of shares of the merging companies.
3.2 What determines the choice of structure, including in the case of a cross-border deal?

The choice of structure is determined by various factors such as the available means for financing the transaction, the respective weight of the relevant companies, and tax aspects. The hostile or friendly nature of the offering can also influence the structure. A merger will be based on an agreement made by at least a three-quarter majority vote of both entities. If this majority is reached, all shareholders may be forced to exchange their shares.

3.3 How quickly can a bidder complete an acquisition? How long is the deal open to competing bids?

The bid period starts five business days after the FSMA has approved the prospectus. It ends in principle from two to 10 weeks after this date. A competing bid can always be filed up to two business days before the closing of the bid period.

3.4 Are there restrictions on the price offered or its form (cash or shares)?

With respect to public offerings, the price of the offering can consist of cash, securities, or both. A distinction must be made between a mandatory offering and a voluntary offering, however.

In a voluntary offering, the bidder is free to set the price provided that the proposed price enables the bidder to complete the transaction. In a mandatory offering, the price must be at least equal to the higher of the following two figures: (i) the highest price that the bidder or a person acting in concert with it paid for the securities of the target company in the 12 months preceding the announcement of the bid; and (ii) the weighted average of the trading prices of the securities concerned, on the most liquid market, over 30 calendar days before the obligation to launch a bid was triggered.

3.5 What level of acceptance/ownership and other conditions determine whether the acquisition proceeds and can satisfactorily squeeze out or otherwise eliminate minority shareholders?

Provided certain conditions are satisfied, a natural person or legal entity may force the minority shareholders to transfer all their voting securities if it holds, directly or indirectly, alone or in concert with another person, 95% of the voting securities of that company.

3.6 Do minority shareholders enjoy protections against the payment of control premiums, other preferential pricing for selected shareholders, and partial acquisitions, for example by mandatory offer requirements, ownership disclosure obligations and a best price/all holders rule?

All shareholders must be treated equally. If, during the bid period, the bidder or the persons acting in concert with the bidder acquire or commit to acquire, outside the bid, securities of the offeree company at a higher price than that of the bid, the price of the bid must match that higher price. In addition, the FSMA ensures that there is a high level of transparency in the pricing (the price of the bid and the prices being offered).

A mandatory public offering must in principle be launched if a person or entity holds more than the threshold of 30% of voting securities in a listed company following an acquisition of voting securities in that listed company.

3.7 To what extent can buyers make conditional offers, for example subject to financing, absence of material adverse changes or truth of representations? Are bank guarantees or certain funding of the purchase price required?

A bidder may include specific conditions precedent or conditions subsequent to its offer. The FSMA reviews the conditions imposed by the bidder.

Regardless of whether the offer is conditional or not, the bidder must provide sufficient guarantees regarding the price offered. If the price is to be paid in cash, the funds needed to complete the bid must be immediately available. If the price is to be paid in the form of securities, the securities needed to complete the bid must be in the possession of the buyer, or the buyer must be entitled to issue or acquire such securities.


4.1 What are the basic tax considerations and trade-offs?

A roll-over regime applies to a merger, exchange of shares, and other similar transactions, whereby there are certain limitations to the transfer of tax losses and other tax privileges. Specific anti-abuse provisions and the absence of a tax consolidation system should be considered when determining pre- and post-acquisition transactions as well as the funding structure. No stamp duty applies to an acquisition of shares. Since January 1 2016 a so-called speculation tax of 33% has been introduced for private individuals (resident and non-resident). This is due on capital gains realised on securities where a period of less than six months lapses between the acquisition and the sale of such securities.

4.2 Are there special considerations in cross-border deals?

Close attention must be paid to the tax position of both the target and the buyer. Notably, one must define the acquisition vehicle and take advantage of Belgian tax constraints. A similar roll-over regime applies to cross-border mergers and other reorganisations made inside the EU.


5.1 What are the most important forms of anti-takeover defences and are there any restrictions on their use?

The articles of association of the target company can stipulate that the role of the board of directors in a public offering must be a passive one and that the effects of agreements that could frustrate the bid must be suspended. However, such provisions are not compulsory.

If the target company chooses not to include such limitation in its articles of association, it can adopt other anti-takeover defence measures. For example: (i) a pre-emption right could be granted to the target company's shareholders or a requirement for the target company's shareholders to approve the new shareholder(s) (subject to some limitations); (ii) subject to the prior authorisation of the shareholders' meeting, the board of directors could increase the share capital or decide to launch a share buy-back.

5.2 How do targets use anti-takeover defences?

Most companies do not clearly set out in their articles of association the passive role that the board of directors should take and how the effects of agreements that could frustrate the bid should be neutralised in order to enjoy more flexibility in the adoption of anti-takeover defences.

5.3 Is a target required to provide due diligence information to a potential bidder?

There is no law requiring or prohibiting a potential bidder from carrying out due diligence on a listed company. The decision on whether to authorise a company to carry out due diligence lies with the target's board of directors. However, the target's board intervenes twice in the bidding process:

before the prospectus is approved by the FSMA so that it can inform the FSMA and the bidder of any misleading or missing information;
after the prospectus is approved so that it can issue a memorandum of response whereby it: (i) gives its view on the contemplated bid; (ii) indicates whether the directors, in their capacity as holders of securities, will transfer their securities to the bidder as part of the bid; and (iii) indicates whether any provision of the articles of association implies a limitation on the possibility to sell or acquire voting securities.

5.4 How do bidders overcome anti-takeover defences?

A bidder can try to overcome an anti-takeover defence by: (i) filing a complaint with the FSMA about anti-takeover measures; (ii) offering a higher price; or (iii) trying to convince the board of directors to support the bid.

5.5 Are there many examples of successful hostile acquisitions?

Most acquisitions are friendly takeover bids because one or several controlling shareholders usually hold a substantial portion of the shares.


6.1 What are the main ways for a friendly bidder and target to protect a friendly deal from a hostile interloper?

The chance of success of any competing bid may be limited by obtaining the support of the board of directors or of important shareholders, or by setting break-up fees.

6.2 To what extent are deal protections prevented, for example by restrictions on impediments to competing bidders, break fees or lock-up agreements?

With regard to any action taken by the board of directors, the board must always act in the corporate interest of the target company. In addition, from the date it has received notification about the public offering, the board of the target company may not take any measure that will significantly affect the assets or liabilities of the target company without the prior consent of the shareholders meeting. Entering into any lock-up agreement with the target's shareholder's can be considered a so-called action in concert if the purpose of the agreement is to control the target company. In some cases, this triggers a mandatory public offering.


7.1 What are the anti-trust notification thresholds in your jurisdiction?

If (i) the companies involved in the transaction have together a turnover of more than €100 million ($112.9 million) in Belgium, or (ii) at least two of the companies have a turnover of at least €40 million in Belgium, the transaction must be reported to the Belgian Competition Authority (BCA).

7.2 When will transactions falling below those thresholds be investigated?

The BCA has no power to investigate transactions whose thresholds fall below those referred to in section 7.1.

7.3 Is an anti-trust notification filing mandatory or voluntary?

A transaction that meets the thresholds must be notified to the BCA.

7.4 What are the deadlines for filing, and what are the penalties for not filing?

Transactions must be notified before they are completed. The transaction may not in principle be completed before the BCA has authorised it.

7.5 How long are the antitrust review periods?

If it is obvious that the contemplated transaction does not contravene antitrust rules, a simplified review procedure will last 15 business days. If the regular review procedure applies, it could take 40 to 55 business days in normal situations, or longer if additional duties are required of the authority.

7.6 At what level does your antitrust authority have jurisdiction to review and impose penalties for failure to notify deals that do not have local competition effect?

The BCA has jurisdiction over transactions that affect the Belgian market and that fall within the thresholds referred to in section 7.1. In this respect, any failure to notify the authority can trigger fines, which are calculated pro rata according to the companies' turnover.

7.7 What other regulatory or related obstacles do bidders face, including national security or protected industry review, foreign ownership restrictions, employment regulation and other governmental regulation?

From the moment the public offering has been disclosed to the public, representatives of the employees of the bidder and the target company must be informed of the contemplated public offering and must be given a copy the prospectus and the opinion of the board of directors. The directors will explain to the Works Council the strategy of the contemplated transaction and the consequences it will have on employment.


8.1 What is the applicable anti-corruption legislation in your jurisdiction?

The Belgian Criminal Code penalises public and private corruption.

8.2 What are the potential sanctions and how stringently have they been enforced?

A person guilty of corruption can be punished by a fine of €600 to €600,000 and imprisonment of six months to three years (up to 10 years in extreme cases). In addition, companies whose directors or employees are found guilty of corruption can be excluded from any right to participate in public offerings. Alleged corruption cases are often settled with the public prosecutor.


9.1 Are there any other material issues in your jurisdiction that might affect a public M&A transaction?



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Olivier Clevenbergh

About the author
Olivier Clevenbergh is mainly active in the field of public and private M&A and corporate law. He deals with national and international acquisitions and disposals of shares or assets, private equity and venture capital transactions, mergers and joint ventures. He combines his transactional practice with a contentious practice covering the same areas. He therefore also represents clients in commercial and corporate litigation before the Belgian courts and arbitration tribunals.

He was admitted to the Brussels Bar in 1989 and was admitted as a solicitor of England and Wales in 1995.

Gisèle Rosselle

About the author
Gisèle Rosselle concentrates on corporate: public and private M&A, corporate finance and project finance transactions, with particular experience in cross-border M&A, private equity, and capital market transactions. These involve a wide variety of industries, including banking, chemicals, paper and pulp, technology and energy.

Rosselle was admitted to the Brussels bar in 1994.

She served as chair of the Corporate and M&A Committee of the International Bar Association from 2009 through 2011, after having chaired the Private Equity Subcommittee of the International Bar Association's Corporate and M&A Committee.

Thomas Pouppez

About the author
Thomas Pouppez is mainly active in the field of M&A and corporate law.

He was admitted to the Brussels Bar in 2011. He is a teaching assistant at the Free University of Brussels (ULB) in law relating to legal personality matters.