Corporate M&A 2026 Comparisons

The Lebanese M&A market remains cautious and constrained rather than expansionary compared to 12 months ago. Activity has stabilised, but has not materially accelerated, and transactions continue to take place within an environment shaped by banking sector dysfunction, currency volatility, and geopolitical uncertainty.

Deals are thus primarily equity-funded, often supported by offshore liquidity, with limited use of leverage.

Acquisition structures remain conservative. Investors avoid financing exposure and instead rely on deferred consideration, most commonly through earn-outs. In large and cross-border transactions, parties may also seek international warranty and indemnity insurance to mitigate the risk of contingent liabilities.

Against this backdrop, regulatory measures encouraging corporate consolidation, including favourable tax treatment for qualifying mergers under the Budget Law (Law No 10/2022), as implemented by Ministerial Decision No 907/2023, (the “2022 Budget Law”), have introduced a tax framework facilitating restructuring transactions. At the same time, Competition Law No 281/2022 (the “Competition Law”) has formally introduced a merger control regime, adding a layer of procedural consideration for certain transactions. However, these regulatory developments have not materially altered deal flow.

M&A activity continues to function primarily as a restructuring mechanism. Transactions focus on stabilising operations and rationalising costs, rather than expansion. Groups are increasingly streamlining to eliminate operational duplication – a logic that has driven defensive deals across several sectors.

In this context, fiscal incentives remain a key driver for these moves. Ministry of Finance Decision No 907/2023 provides income tax exemptions and reduced rates on fixed asset revaluation, offering a practical pathway for balance-sheet management. A rising trend of “carve-outs” has also emerged, where diversified conglomerates divest non-core Lebanese assets to focus on regional growth or to settle local liabilities.

Looking ahead, the banking sector remains the anticipated catalyst for future deal flow. Under the Law on the Reform and Restructuring of the Banking Sector in Lebanon No 23/2025 (the “Banking Reform Law”), consolidation is no longer solely left to the initiative of banks. The law formally empowers a bicameral Higher Banking Commission (HBC) to determine, oversee and implement the restructuring, merger, or liquidation of institutions.

Overall, the market reflects strategic re-calibration and portfolio optimisation rather than organic expansion.

M&A activity has been concentrated in sectors demonstrating relative resilience and operational adaptability despite Lebanon’s economic constraints.

• Technology & Digital Services: Technology and digital service providers have attracted investor interest given their scalability and capacity to generate revenue outside the domestic market. Recent cross-border strategic combinations, particularly in media and digital platforms, reflect this dynamic.
• Insurance: The insurance sector is gradually consolidating as companies respond to financial pressure and stricter regulatory oversight. Smaller insurers are under pressure to strengthen their capital position, often by seeking new investors or merging with stronger players. As a result, well-capitalised groups with access to hard-currency funding have become natural buyers in the market.
• Engineering & Consultancy: Firms with regional operations and technical expertise continue to attract interest due to their ability to generate foreign-currency income.
• Energy & Renewables: This sector has seen growth driven by both necessity and a clearer legal framework. The Distributed Renewable Energy Law (Law No 318/2023), ratified in December 2023, now facilitates peer-to-peer trading and direct power purchase agreements (PPAs), fostering specialised M&A in the solar space.
• Real Estate & Healthcare: Healthcare transactions are driven by cost rationalisation. Real estate deals remain opportunistic and often require enhanced local risk assessment.

In Lebanon, a company is typically acquired through a share acquisition, and less commonly through a statutory merger or an asset transaction. The choice of structure mainly determines whether liabilities remain with the target or are selectively assumed by the buyer.

Share acquisitions are the most usual approach. The buyer acquires shares in a joint stock company (SAL) or quotas in a limited liability company (SARL), while the legal entity remains unchanged and continues to hold its assets, contracts, licences and liabilities. Completion requires corporate approvals and registration of the share transfer with the Commercial Register.

Statutory mergers (by absorption or by formation of a new company) are mainly used for group reorganisations. By operation of law, all rights and obligations of the merged entity transfer to the surviving or newly formed company without individual assignment of contracts.

Asset transactions are less frequent for operating businesses. Although they allow the buyer to limit exposure to historical liabilities, assets, contracts, employees and permits must generally be transferred individually, which can make execution more complex and time-consuming. As a result, buyers place particular emphasis on payment security, and transactions commonly include escrow arrangements, deferred consideration or offshore settlement structures.

Certain sectors are subject to additional approvals. Transactions involving banks require regulatory consent under the Legislative Decree No 13513/1963 (the “Code of Money and Credit”) and acquisitions of real estate rights by foreign persons may require governmental authorisation. Listed companies are additionally subject to capital markets and stock exchange rules.

M&A activity in Lebanon does not fall under the supervision of a single dedicated takeover authority. Instead, oversight is fragmented and depends largely on the sector in which the target operates.

Under the Competition Law, the National Competition Authority (NCA) is responsible for the review of economic concentrations. Transactions that may result in a significant market share must be notified to the NCA and may be subject to prior clearance. Although the Authority remains in a transitional phase toward full operational capacity, its statutory power to review and prohibit anti-competitive mergers introduces a formal merger control review mechanism.

At corporate level, transactions are formalised through the Commercial Register, which records share transfers, mergers, and corporate restructurings in accordance with the Code of Commerce. Registration and publication render the transaction effective vis-à-vis third parties. The Commercial Register plays a constitutive and publicity role rather than a regulatory one, but it acts as the central authority through which changes of control become legally enforceable.

In regulated sectors, supervisory authorities exercise substantive oversight. Transactions involving banks and financial institutions fall under the supervision of the Central Bank of Lebanon (BDL) pursuant to the Code of Money and Credit. Mergers between banks require prior approval from the Central Council of the BDL, following consultation with the Banking Control Commission of Lebanon (BCCL). In addition, under the Banking Reform Law, the HBC is vested with authority to determine bank restructuring and mandatory mergers as part of the financial sector recovery framework.

For public companies and securities-related transactions, the Capital Markets Authority (CMA), established by Law No 161/2011, supervises significant share acquisitions and public acquisition offers. Listed companies are also subject to the rules of the Beirut Stock Exchange (BSE), particularly regarding disclosure obligations, trading transparency and market conduct.

In the insurance sector, the Insurance Control Commission (ICC) serves as the primary regulator and oversees mergers, acquisitions and recapitalisation measures aimed at maintaining solvency and protecting policyholders.

As a result, M&A transactions in Lebanon involve a combination of corporate formalities, competition review and sector-specific approvals, depending on the nature of the target’s activity.

Foreign investment is generally permitted without a local partner. A foreign individual or company may incorporate a Lebanese company or acquire shares in an existing company without prior governmental approval, subject mainly to sector-specific licensing requirements. Foreign investors may also participate in commercial activities and public tenders, subject only to sector-specific licensing requirements. However, it is important to note that, for companies engaged in exclusive commercial representation, Legislative Decree No 34/1967 still requires Lebanese citizens to hold the majority of the capital and the manager be a Lebanese national.

Lebanese law recognises the principle of free capital movement. Under the Code of Money and Credit and the Capital Markets Law (CML), foreign investors may hold and trade financial instruments and transfer funds in foreign currency. That said, since the financial crisis, the banking system has imposed practical transfer limitations.

Restrictions exist, but they are specific, rather than general. The most important relates to real estate. Under Legislative Decree No 11614/1969 (as amended by Law No 296/2001), a foreign person or entity generally needs a decree from the Council of Ministers to acquire real property in Lebanon, except for relatively small surface areas of up to 3,000 m². In addition, foreign ownership cannot exceed 3% of the Lebanese territory and, within Beirut, 10% of the city’s area. Long-term leases exceeding ten years are treated similarly.

Some regulated sectors such as banking, insurance, media, transportation, and defence-related activities require licences from the relevant authorities.

Finally, Law No 360/2001 created the Investment Development Authority of Lebanon (IDAL), which grants incentives and facilitation measures for qualifying projects. Its approval is not required to invest; it is an optional incentive regime.

In practice, foreign investment restrictions rarely prevent acquisitions of operating companies. The principal transaction risk arises only where the target holds significant real estate assets or operates in a regulated sector, in which case governmental approvals may become a timing condition to closing rather than a prohibition on the transaction.

The Competition Law introduced, for the first time in Lebanon, a formal merger control regime. Prior to its adoption, business combinations were not subject to a dedicated competition review, and transactions were generally assessed only from a corporate and regulatory standpoint.

The NCA reviews transactions constituting an “economic concentration”, including mergers, acquisitions of control and certain joint ventures. Notification is required where the parties’ combined market share in the relevant market exceeds 30% during the preceding three fiscal years.

The NCA assesses whether a transaction is likely to significantly restrict competition, in particular through the creation or strengthening of a dominant position. Following its review, the authority may approve the transaction, approve it subject to commitments, or prohibit it. The statutory review period is 60 days from submission of a complete filing, subject to limited extension. Failure to notify a notifiable transaction may result in financial penalties, and the authority may order suspension of the transaction or restoration of the situation existing prior to completion.

In addition to merger review, the Competition Law prohibits anti-competitive agreements and abuse of a dominant position. Article 5 notably removed the enforceability of exclusive commercial representation rights against third parties, allowing parallel importation of products previously subject to exclusive distribution. This change has increased the importance of competition due diligence for targets operating in the distribution and retail sectors.

Because decisional practice remains limited and the authority is still operationally developing, merger control currently functions primarily as a procedural risk rather than a substantive prohibition risk. Parties therefore address it through conditions precedent and long-stop dates, rather than through structural remedies.

In Lebanon, acquiring a company does not terminate employment relationships. Employees automatically remain employed after the transaction because the employer, the legal entity itself, continues to exist. The acquirer therefore effectively steps into the position of employer and inherits all related obligations, including salaries, benefits, seniority, accrued rights and any past non-compliance. For this reason, labour due diligence is primarily directed at understanding the company’s existing employment practices and hidden liabilities rather than renegotiating employment contracts.

This continuity directly affects post-closing restructuring. Although dismissals for economic or technical reasons, such as reorganisation or downsizing, are permitted under the Labour Law of 23 September 1946 (“Labour Law”), they are subject to administrative supervision. The employer must notify and consult the Ministry of Labour in advance and submit a termination plan that takes into account employees’ seniority, age, specialisation and social circumstances. Layoffs therefore cannot be implemented immediately following closing, and may be challenged if they appear intended merely to replace the workforce after the takeover.

The same logic applies to employee financial exposure. Lebanon operates a statutory end-of-service indemnity regime administered through the National Social Security Fund (NSSF) rather than a pension system, and the acquirer inherits the full accumulated indemnity liability, including service years preceding the acquisition. In addition, benefits granted in practice such as bonuses, transportation allowances or other regular advantages, are often treated by the Labour Arbitration Council as acquired rights. As a result, they cannot easily be withdrawn, even where not expressly written in the employment contract.

Recent developments in working arrangements add further considerations. Remote, part-time and flexible work practices have become common, while workplace accident and insurance rules were originally designed for employees working on the employer’s premises. Because the acquirer immediately becomes the employer, it may assume liability connected to remote employees under existing insurance or safety policies, even where internal procedures are unclear.

For that reason, labour due diligence in Lebanon typically extends beyond headcount and payroll and includes verification of social security registration, payment of NSSF contributions, wage tax withholding and employee insurance coverage. Any deficiencies in these areas transfer with the company and may only become apparent after completion.

For buyers, employment exposure is therefore treated as a pricing issue rather than a closing condition, and indemnities or purchase price adjustments are commonly negotiated to cover undisclosed employment liabilities.

Lebanon does not operate a dedicated national security screening regime for acquisitions. Unlike jurisdictions that subject foreign investments to prior geopolitical or strategic review, Lebanese law does not provide a standalone authority empowered to block or condition a transaction purely on national security grounds. Transactions are instead assessed under corporate, regulatory, and competition frameworks.

That said, national interest considerations may arise indirectly. In regulated sectors, such as banking, media, telecommunications, and defence-related activities, the competent authorities retain broad supervisory powers and may refuse approvals where public order or financial stability is implicated.

Lebanon also maintains strict boycott legislation. The Law of 23 June 1955 prohibits Lebanese persons and entities from entering into commercial or financial dealings, directly or indirectly, with Israeli nationals or companies connected to Israel. Violations may give rise to criminal sanctions.

In practice, foreign investors acquiring Lebanese assets are commonly required to obtain a “clean” declaration from the Ministry of Economy’s Boycott Office confirming the absence of prohibited Israeli links. This operates as a de facto screening mechanism during due diligence.

Overall, Lebanon has no general foreign investment screening system, but certain transactions may be restricted through sectoral approvals and boycott regulations, which are typically addressed during regulatory approval and due diligence rather than through a formal national security review.

To our knowledge, there have been no landmark court decisions specifically addressing M&A transactions, largely because acquisition agreements commonly provide for arbitration.

However, two legislative developments have materially affected the M&A framework.

First, the 2025 Banking Reform Law introduced a bank resolution regime under which the HBC may mandate mergers or transfers of assets and liabilities of distressed banks as part of sector restructuring. This mechanism operates as a resolution tool rather than a negotiated acquisition and may override shareholder consent.

Second, amendments to the 2022 Budget Law introduced tax incentives for corporate mergers, including reduced taxation on asset revaluation and exemptions from certain duties, addressing a traditional obstacle to restructuring transactions.

Taken together, these reforms indicate an increasing use of M&A as a restructuring and regulatory tool. Transactions increasingly operate not only as expansion or acquisition strategies but also as mechanisms of corporate compliance, restructuring and, in certain sectors, financial stabilisation.

Lebanon does not have a standalone takeover statute or a mandatory tender offer regime comparable to those found in many jurisdictions. Acquisitions of control are primarily governed by the general provisions of the Code of Commerce and, in the case of listed companies, by the regulatory framework of the CMA and the rules of the BSE.

While general takeover law remains stable, the past 12 months have introduced significant sector-specific “forced takeover” mechanisms. The most critical development is the Banking Reform Law. This legislation empowers the HBC to mandate the merger of distressed banks or the compulsory transfer of their assets and liabilities to a third-party acquirer. This represents a departure from voluntary M&A, allowing the regulator to initiate takeovers to preserve financial stability.

Overall, while the core corporate framework remains unchanged, the intersection of banking resolution has created a more complex and regulated takeover environment in Lebanon.

In Lebanon, stakebuilding prior to a formal offer is not common and is primarily observed in the limited number of listed companies on the BSE. For private companies (SAL or SARL), acquisitions are almost exclusively negotiated directly with major shareholders, making hostile stakebuilding practically impossible due to the closely-held nature of Lebanese firms and the common presence of “right of first refusal” clauses in company bylaws.

In the public market, a bidder may attempt to accumulate shares through open-market purchases. However, this is constrained by low liquidity and the 5% disclosure threshold. Strategies typically focus on “friendly” block trades negotiated with existing institutional or family shareholders before a public announcement.

Disclosure requirements in Lebanon differ between listed and private companies.

For listed companies, any person acquiring a significant participation in voting shares must notify the CMA. The notification obligation is generally triggered at or above a 5% shareholding and aims to inform the market of shareholders capable of influencing corporate decisions.

For private companies, transparency is addressed through beneficial ownership rules rather than market disclosure. Companies must identify and record their ultimate beneficial owners, generally defined as natural persons who directly or indirectly hold at least 20% of the capital or voting rights or otherwise exercise effective control. This information must be filed with the Commercial Register and declared to the tax authorities, but it is not publicly disseminated to investors.

In addition, following Law No 40/2026 (the “2026 Budget Law”), any transfer of shares or change in shareholders must be notified to the Tax Administration at the Ministry of Finance within one month from the date of change or share transfer in order to update the company’s fiscal records.

Statutory disclosure thresholds applicable under the capital markets framework cannot be reduced or waived by a company through its articles of incorporation or bylaws. Reporting obligations imposed by law, including disclosure of significant shareholdings in listed companies (the 5% threshold under CMA regulations), are mandatory and prevail over any internal corporate provisions.

A company may, however, introduce additional governance mechanisms that require notification or approval at higher internal thresholds. For example, constitutional documents or shareholders’ agreements may require a shareholder to notify the company or obtain consent once a certain percentage of shares is acquired. Such provisions operate at the contractual or corporate level and do not replace statutory disclosure obligations. In fact, most Lebanese SAL companies include “right of first refusal” or “prior board approval” clauses for any share transfer in their bylaws, which act as a significant barrier to hostile or uncoordinated stakebuilding.

Accordingly, while companies may impose stricter internal requirements, they cannot lower or circumvent reporting thresholds established by law.

Lebanese law recognises derivative instruments. Article 2 of CML includes options, futures and other structured financial products within the definition of financial instruments. Accordingly, derivatives transactions are legally permissible under Lebanese financial regulation.

However, professional dealing in derivatives is a regulated activity. Entities carrying out brokerage, portfolio management or intermediation in such instruments must be licensed and supervised by the CMA in accordance with the capital markets regulatory framework. The regulatory regime therefore governs the intermediaries and the activity, rather than prohibiting the instruments themselves.

Lebanon does not currently have an organised derivatives trading market. The BSE operates essentially as a cash market limited to shares and bonds, and derivatives transactions are typically concluded over-the-counter with banks or licensed financial institutions rather than traded on an exchange.

From a legal perspective, derivatives are contracts whose value is linked to an underlying asset, such as shares, but they do not themselves constitute ownership of that asset. The contract creates financial rights and obligations between the parties without transferring the underlying securities. Consequently, derivatives are treated as financial contracts rather than corporate ownership interests.

Lebanese law does not provide a separate disclosure regime specifically applicable to derivatives positions. Reporting obligations arise primarily through securities transparency rules.

Under the capital markets framework, disclosure is linked to ownership of shares and voting rights rather than purely economic exposure. Because derivative instruments such as options or swaps generally do not transfer legal title to shares, entering into a derivatives contract does not, by itself, trigger a notification obligation to the regulator or the market. A filing obligation arises only where the arrangement results in the acquisition of shares, or settlement in shares, or otherwise grants the investor voting rights or the ability to exercise shareholder powers. In that situation, the investor is treated as a shareholder and must disclose the participation once the relevant thresholds are met.

From a competition law perspective, the analysis focuses on control rather than ownership. In the uncommon event that a derivative arrangement grants a party decisive influence over the company’s management or strategy, it could be characterised as an economic concentration and require prior notification to the NCA under Competition Law.

Accordingly, derivatives themselves are generally outside disclosure requirements, but regulatory filings may arise if they lead to voting rights or effective control.

Lebanese law does not require a shareholder to disclose the purpose of an investment or its intentions regarding control of the company. A person may acquire shares and remain silent as to strategy, governance plans or future influence. The capital markets framework is primarily concerned with transparency of ownership, identifying who holds voting power, rather than the motives behind the investment.

The situation changes where an acquisition indicates a possible change of control in a listed company. Under the BSE bylaws, a person seeking to acquire more than 10% of the voting rights in a company listed on the official or secondary market, or a participation than can lead to effective control, must proceed through a public tender offer procedure. The threshold functions as an early-warning mechanism rather than a determination of legal control, as even a minority block may allow a shareholder to exercise material influence in a company with dispersed ownership.

Once a tender offer is launched, the bidder is no longer treated as a passive investor. The offer documentation (“Prospectus”) must include a statement of the bidder’s intentions regarding the company, including its future management and governance. This disclosure allows shareholders and the market to assess the consequences of the proposed acquisition and decide whether to retain or dispose of their shares.

Separately, Lebanese corporate law imposes transparency obligations within the context of mergers and demergers. Under the merger provisions of the Code of Commerce, the companies involved must prepare a merger plan, deposit it with the Commercial Register and publish a summary in the Official Gazette and a local newspaper. The document must state, among other matters, the purpose and conditions of the transaction, the valuation of assets and liabilities, and the exchange ratio. This publication requirement does not concern the intentions of an investor but ensures that shareholders and creditors are informed of the proposed corporate reorganisation.

Accordingly, Lebanese law does not generally require investors to justify why they acquire shares. Disclosure of intentions becomes mandatory only when the acquisition may affect control of a listed company, while corporate reorganisations are made transparent through publication of the merger documentation.

A company is not required to disclose a potential transaction during preliminary negotiations or at first approach. Initial approaches by a potential investor, discussions, due diligence and even the execution of a non-binding memorandum of understanding may remain confidential.

For listed companies, disclosure obligations arise only once the transaction constitutes material information likely to affect the price of the company’s securities under the CML and the regulations of the CMA. As issuer of traded securities, the company must inform the CMA and the public when the transaction becomes sufficiently definite and price-sensitive, typically at the point of board approval, execution of binding agreements or when the parties have reached a firm commitment to proceed.

For private companies, there is no public disclosure requirement at the negotiation or signing stage. The transaction becomes public only upon registration of the relevant corporate acts with the Commercial Register following completion.

Separately, a filing obligation may arise under Competition Law. Where the transaction constitutes an economic concentration and the parties’ combined market share in the relevant market exceeds 30% over the preceding three financial years, the parties must notify the NCA before implementation and may not complete the transaction prior to clearance.

Although Lebanese law requires disclosure only once a transaction becomes material and price-sensitive, market practice may lead to earlier announcements in certain circumstances.

In principle, companies seek to maintain confidentiality and will typically wait until a binding agreement is executed. However, this approach is contingent on the ability to preserve confidentiality. If negotiations become public, rumours circulate, or unusual trading activity suggests information leakage, issuers will generally disclose the transaction earlier to ensure equal access to information and avoid misleading the market.

This approach remains consistent with the legal disclosure framework. The law sets the minimum disclosure threshold but, in practice, the timing of the announcement depends on the degree of certainty and the company’s ability to safeguard confidentiality.

In Lebanon, due diligence in a negotiated business combination is directed less at the mechanics of the transfer and more at the consequences of taking control of the company and continuing its operations.

The exercise typically begins with a review of corporate documentation to confirm the company’s ownership structure and the authority of its governing bodies. This includes examining filings at the Commercial Register and verifying that the shares are validly issued and transferable. The review then moves to the company’s contractual position. Lawyers examine principal commercial contracts and financing arrangements, with particular attention to provisions that may be affected by a change of control.

The investigation then focuses on liabilities that will survive the transaction. Counsel commonly reviews pending litigation, employment matters and the company’s tax situation, since these obligations remain with the company after completion. In practice, special attention is typically given to tax compliance, NSSF contributions and undocumented employment arrangements, which frequently represent the most significant sources of post-closing liability.

Where the company operates in a regulated sector, verification of licences and regulatory approvals is also necessary. Financial information is reviewed with accountants to assess debt exposure and the company’s financial position.

As a result, Lebanese due diligence is less confirmatory and more investigative in nature, and its findings frequently influence valuation and payment structure rather than the decision to proceed with the transaction itself.

In Lebanese practice, buyers are more likely to request exclusivity than sellers are to demand a standstill. Exclusivity typically arises once negotiations become serious, often at the stage of the confidentiality agreement and more commonly in the letter of intent, when the buyer is preparing to conduct and finance due diligence. At that point, the buyer begins incurring significant legal, financial and advisory costs, and therefore seeks a protected negotiation period during which the seller undertakes not to solicit or negotiate with competing bidders. The purpose is to avoid a situation in which the seller relies on the buyer’s due diligence to test valuation and then approaches other purchasers to obtain a higher offer.

The protection may be reinforced by a break-up fee compensating the buyer if the seller withdraws from the transaction or accepts a competing offer after the buyer has invested substantial resources. However, under Article 266 of the Code of Obligations and Contracts, a Lebanese judge retains the power to reduce a break-up fee if it is deemed “excessive” or “disproportionate” to the actual damages suffered, regardless of the amount agreed in the contract. Sellers, however, often resist broad exclusivity because it limits their ability to seek a better price and weakens their bargaining position; they may therefore shorten its duration or grant it only after the buyer demonstrates serious intent – eg, by presenting an indicative price or evidence of financing.

Standstill undertakings are less common and tend to arise in specific situations, particularly where the target fears that a potential buyer could acquire shares outside the negotiated transaction, eg, in companies with relatively dispersed ownership.

Lebanese law does not require a tender offer to be preceded by a definitive acquisition agreement. A public tender offer is formally a unilateral offer addressed to all shareholders once approved by the CMA.

In practice, however, tender offers are rarely launched without prior arrangements. Where control is held by one or more significant shareholders, the bidder will typically negotiate the principal terms of the acquisition with them in advance, often through a share purchase agreement or similar arrangement. The public offer is then structured to reflect the price and conditions already agreed with those shareholders and extended to the remaining shareholders on equivalent terms.

Accordingly, while the tender offer itself is not documented as a bilateral definitive agreement with all shareholders, it commonly follows a negotiated transaction with key shareholders and functions as the mechanism for extending that agreed deal to the market.

Acquiring or selling a business in Lebanon generally takes approximately four to six months, although the timing varies depending on the complexity of the transaction and the level of regulatory involvement.

The process is largely driven by due diligence and negotiation of transaction documents during the initial phase, followed by completion steps, such as corporate approvals, regulatory clearances where required, and registration formalities. In practice, filings before the Commercial Register and, in regulated sectors, approvals from competent authorities, rather than the negotiation itself, often represent the main timing constraint. The legal documentation can typically be completed more quickly, although the timetable is driven primarily by administrative filings and regulatory approvals rather than negotiation complexity.

Lebanese law does not provide for a mandatory tender offer threshold in the classic sense. Acquiring control of a listed company does not automatically oblige the acquirer to purchase the shares of all remaining shareholders.

Public acquisition offers are instead governed by the BSE bylaws. Under its Article 162, a bidder launching a public offer must specify the minimum and maximum number of securities and voting rights it intends to acquire. The bidder is therefore free to determine the scope of the acquisition and is not legally required to acquire all outstanding shares.

However, the regulations impose a procedural trigger. A person seeking to acquire more than 10% of the voting rights in a listed company, or a participation capable of leading to effective control, must submit a draft public tender offer to the Stock Exchange authorities. The rule requires the transaction to be conducted through a public offer mechanism but does not convert it into a mandatory buyout of minority shareholders.

In practice, Lebanese law distinguishes between a tender offer trigger and a mandatory offer obligation: significant acquisitions may require launching a public offer, yet the bidder is not compelled to acquire all remaining shares.

Accordingly, Lebanese law regulates when a tender offer must be launched, but not the percentage of shares that must ultimately be acquired for the offer to succeed.

In Lebanon, acquisitions are most commonly structured as cash transactions. In private companies, the purchase price may be paid in instalments, and sellers commonly require security, such as a pledge over the transferred shares, to secure deferred amounts.

In listed companies, acquisitions are typically conducted through a public tender offer in which the bidder offers cash to all shareholders, while share consideration is uncommon.

Mergers differ in structure. Rather than a purchase price, the surviving company issues shares to the shareholders of the absorbed company according to an agreed exchange ratio. Lebanese law permits only a limited cash adjustment not exceeding 10% of the nominal value of the shares issued, resulting in a combination of ownership rather than a cash sale.

Where valuation uncertainty exists, parties frequently use earn-outs or deferred payment mechanisms to bridge price expectations and allocate risk based on future performance.

In Lebanon, the permissibility of conditions in a takeover offer depends on the type of company involved.

For private companies, parties have broad contractual freedom and may condition the transaction on matters such as due diligence, financing or the absence of a material adverse change.

For listed or regulated companies, regulatory approval becomes decisive. Public takeovers are supervised by the CMA, and a bidder cannot rely on vague or discretionary conditions to withdraw once the offer is announced. Transactions may also require competition clearance and, in regulated sectors such as banking, prior approval from the competent authority.

Accordingly, takeover conditions are largely negotiable in private deals, but acquisitions of listed or regulated companies are primarily driven by mandatory regulatory approvals.

Lebanese law does not impose a statutory minimum acceptance condition for public tender offers. Unlike jurisdictions that require the bidder to obtain a fixed percentage of shares (such as a majority control threshold), the bidder is free to determine the minimum number of shares it wishes to acquire.

Under the Beirut Stock Exchange rules, the offer document must state the minimum and maximum number of securities or voting rights sought. The offer becomes effective only if the bidder’s stated minimum level of acceptances is reached.

Regulatory review by the CMA and the Stock Exchange Committee (SEC) relates to the admissibility and transparency of the offer rather than to the number of shares tendered. Decisions of the SEC may be challenged before the Civil Chamber of the Beirut Court of Appeal within 15 days of notification.

For private companies, acceptance levels are determined by the articles of association and any contractual transfer restrictions between shareholders.

In private transactions, it is common for a deal to be conditional on the bidder securing financing. The parties may agree that completion will only take place once funding is in place. If the bidder fails to obtain financing, the transaction simply does not close. This is largely a matter of negotiation and risk allocation between the parties.

The situation is different for listed companies. A public tender offer is not treated as a tentative proposal but as a serious and executable commitment. Before the offer is made public, the bidder must submit it to the BSE together with evidence of financial capacity and appropriate guarantees. In practice, this means that financing must already be secured at the time the offer is launched. A bidder cannot realistically announce an offer and later withdraw on the basis that funding was not obtained.

In regulated sectors such as banking, the approach is even stricter. The acquirer must demonstrate financial strength and source of funds in order to obtain regulatory approval. As a result, transactions in these sectors are expected to be fully funded before they are formally pursued.

In short, while financing conditions are acceptable in private deals, public offers in Lebanon are expected to be backed by committed funds from the outset.

Bidders commonly seek contractual protections to preserve the transaction during negotiations and the approval process. The most frequent measures are exclusivity or non-solicitation undertakings, under which the seller or key shareholders agree not to negotiate with competing bidders for a specified period. Bidders may also obtain shareholder support or tender undertakings to secure the votes necessary to complete the transaction.

Additional protections are sometimes agreed. Matching rights may give the bidder an opportunity to match a competing offer, and break-up fees may be payable if the seller withdraws from the transaction or accepts a third-party proposal after negotiations have advanced. These mechanisms are not specifically regulated and operate under general contractual principles.

Certain measures seen in other jurisdictions are less common. Because many Lebanese companies are closely held and controlling shareholders typically determine the outcome of shareholder approvals, provisions such as force-the-vote arrangements rarely play a practical role.

There have been no significant legislative changes introducing a formal takeover timetable. However, transactions involving regulated financial institutions have become more procedurally demanding. Additional regulatory and prudential approvals may be required before completion, which, in practice, can lengthen the interim period between signing and closing.

If the bidder does not seek 100% ownership, it may still obtain influence through contractual governance rights agreed with the other shareholders and reflected in a shareholders’ agreement and, where needed, the articles of association. These typically include the right to appoint board members or observers, veto (reserved-matter) rights over major decisions (such as amendments to the articles, capital increases, major transactions or borrowing), access to financial and operational information, approval of budgets or business plans, and transfer protections such as pre-emption, tag-along and drag-along rights.

Under the Code of Commerce, shareholders may be represented at general meetings by proxy or power of attorney. As a general rule, the representative must be another shareholder unless the articles of association allow representation by a non-shareholder, which is commonly permitted in practice.

In principle, the proxy should relate to a specific meeting and agenda, and an overly broad or unspecified authorisation could be challenged. In practice, however, Lebanese corporate practice accepts broader and even irrevocable powers of attorney granting authority to exercise shareholder rights more generally, and resolutions adopted on this basis are routinely filed with the Commercial Register without objection.

In Lebanon, there is no general statutory squeeze-out allowing a majority shareholder to compel minority shareholders to sell once a high ownership threshold is reached.

The closest equivalent is a drag-along clause, commonly included in shareholders’ agreements and reflected in the articles of association, which permits a majority shareholder selling to a third party to require minority shareholders to sell on the same terms. It is purely contractual and only applies if previously agreed.

A limited exception exists in the banking sector: under the 2025 Bank Resolution Law, the Higher Banking Commission may order the transfer of a bank’s shares or assets to an acquirer as part of a restructuring, effectively operating as a regulatory squeeze-out despite minority opposition.

Bidders typically seek irrevocable commitments from principal shareholders before launching a formal offer, particularly where ownership is concentrated. Negotiations usually occur during the pre-announcement stage, often alongside due diligence and prior to any regulatory filing or public announcement.

These undertakings are documented in a support agreement or tender undertaking and are generally drafted as irrevocable to provide the bidder with deal certainty. In some cases, however, they may include a limited “out” allowing the shareholder to withdraw if a clearly superior competing offer is made.

As the proposed transaction is disclosed to selected shareholders at this stage, the process is conducted under strict confidentiality arrangements (such as NDAs and restricted disclosure) to avoid insider-trading or market-abuse concerns before announcement.

A bid is not made public at the bidder’s discretion. For a listed company, a person wishing to acquire a significant participation must first submit a draft public tender offer to the BSE, usually through a licensed financial intermediary acting on the bidder’s behalf.

The offer is initially confidential. The Stock Exchange authorities review the proposed terms, may request clarifications or amendments and, during this review, trading in the securities may be suspended if necessary to preserve orderly trading and investor protection.

The bid becomes public only once the offer is approved. After acceptance by the SEC, a notice is published in the Official Bulletin of the BSE setting out the terms of the offer and the timetable for shareholders to tender their shares. From that moment, the market is formally informed and the offer period begins.

In Lebanon, the issuance of shares in the context of a business combination is disclosed through the merger plan rather than through a separate securities disclosure document.

Before new shares are issued in a merger, the companies must prepare a written merger plan, deposit it with the Commercial Register and publish a summary. The document informs shareholders of the essential elements of the transaction, including the identity, legal form and registered office of the companies involved, the purpose and conditions of the merger, and the valuation of assets and liabilities. It also specifies the financial closing date adopted for the operation.

Importantly, the merger plan sets out the share exchange ratio indicating how many shares each shareholder of the absorbed company will receive in the surviving company, together with any permitted cash adjustment and any merger premium. This information enables shareholders to understand the economic impact of the transaction, including the effect on ownership and dilution.

Shareholders are given access to this information before the extraordinary general meeting that approves the merger and the resulting issuance of shares, allowing them to make an informed decision on the transaction.

In a public tender offer, the bidder is not generally required to publish audited or pro forma financial statements as part of the offer documentation. The disclosure regime focuses primarily on the terms of the offer and the bidder’s ability to perform it rather than on full financial reporting by the bidder. Instead, listed companies themselves remain subject to periodic financial disclosure obligations.

However, the authorities may require evidence of the bidder’s financial capacity. In particular, the bidder must demonstrate the availability of funds and provide appropriate guarantees supporting the offer price. In regulated sectors, especially banking and financial services, the requirements are more stringent: the proposed acquirer must submit documentation regarding its financial standing and the source of funds in order to obtain regulatory approval.

Outside the public offer framework, financial information is often requested as a matter of practice. In negotiated transactions, sellers commonly ask for financial statements or proof of solvency before granting exclusivity or entering into binding agreements, although this arises from contractual protection rather than a statutory obligation.

As to accounting standards, financial statements in Lebanon are generally prepared in accordance with International Financial Reporting Standards (IFRS), which are widely applied by Lebanese companies, particularly listed and regulated entities.

There is no general obligation in Lebanon to publicly disclose the full transaction documents. In practice, the contractual documentation is made available only to the shareholders whose approval is required, allowing them to review the terms before voting at the general meeting.

For listed companies, disclosure operates differently. The market is informed through the tender offer announcement and the notices issued by the BSE, which present the principal terms of the transaction without reproducing the full agreements. In addition, the resolutions approving the transaction and the filings submitted to the Commercial Register become accessible to the public.

From a legal perspective, the effectiveness of the transaction depends on the completion of corporate formalities rather than the publication of the contracts themselves. A business combination takes effect upon registration with the Commercial Register or, where applicable, upon registration of the minutes of the shareholders’ meeting that approved the operation (subject to any permissible agreed effective date). Accordingly, Lebanese law relies on approval and registration for legal validity, not on full disclosure of the underlying documentation.

In a business combination, the board of directors reviews and negotiates the proposed transaction and submits it to the shareholders for approval. Directors must act in good faith and with due care, determine whether the transaction serves the corporate interest, and provide shareholders with sufficient information to make an informed decision.

Under Lebanese law, directors’ duties are owed primarily to the company itself rather than directly to individual shareholders or to broader stakeholders, such as employees or creditors. The system remains largely shareholder-oriented, as the corporate interest is generally assessed by reference to the collective interest of shareholders. However, in assessing the corporate interest, directors may consider the transaction’s impact on employees, key contractual relationships and business continuity, particularly to support the company’s sustainability following completion.

This is reflected in the merger regime, where procedural safeguards, including independent valuation and reporting requirements, are primarily intended to protect minority shareholders. Where one company already holds all the shares of the other, certain reports may be waived and the procedure simplified.

In Lebanon, boards of directors do not typically establish special or ad hoc committees when a business combination is considered. The board usually acts as a whole, and the legal framework governing joint-stock companies does not organise merger decisions around independent committees in the way seen in some other jurisdictions.

Although a board may form internal committees if permitted by the company’s articles of association, such committees are advisory in nature and do not replace the board’s collective responsibility.

Conflicts of interest are addressed directly by statute. If a director, senior executive or significant shareholder has a personal interest in the transaction, that interest must be disclosed and the interested person must abstain from the deliberations. His or her vote is disregarded, and the transaction must be reported to the auditors and submitted to the shareholders for approval. The safeguard therefore lies in transparency and shareholder oversight rather than in delegation to a special committee.

As a result, even where conflicts exist, the creation of a special committee is not standard practice in Lebanese M&A transactions.

Lebanese law does not expressly recognise a “business judgment rule”, but courts adopt a similar approach.

In takeover or merger situations, courts generally defer to the board’s commercial judgment and do not reassess the economic merits of the transaction, provided the directors acted within their authority, complied with the law and the articles of association, and made an informed decision.

Judicial intervention occurs only where the directors commit a legal violation or a management fault, such as fraud, conflict of interest, self-dealing, or a manifestly unreasonable decision. Under Article 167 of the Code of Commerce, directors may incur personal liability toward the company or third parties for breaches of law, breaches of the articles of association, or errors in management.

As a result, Lebanese courts do not review whether the transaction was a good business decision, but whether the decision-making process was lawful and made in good faith.

In Lebanese business combinations, independent outside advice is primarily provided through the financial and expert reports required in the merger process. The statutory auditors of the merging companies prepare a unified report analysing the financial aspects of the operation, including the valuation of the companies, the proposed share-exchange ratio and the adequacy of the assets transferred. This report is made available to shareholders before the extraordinary general meeting that decides on the transaction.

In addition, the Code of Commerce requires the judge supervising the Commercial Register to appoint one or more supplementary financial experts to review the merger documentation and the auditors’ findings and to submit observations. The judicial appointment is intended to ensure neutrality and provide shareholders with an independent technical assessment of the transaction.

Directors rely on these external analyses when preparing their own report and recommendation to shareholders. Rather than basing their position solely on internal evaluation, the board supports its assessment by reference to independent professional verification.

In practice, this outside review serves a dual function: it allows shareholders to evaluate the fairness of the transaction, and also demonstrates that the directors acted with diligence and good faith in endorsing the business combination.

The Code of Commerce establishes a formal approval mechanism designed to manage conflicts of interest. Directors, senior managers and any shareholder with more than 5% of voting rights must obtain prior authorisation from the board of directors before entering into any contract or arrangement with the company. The interested person must disclose the conflict in writing and may not participate in deliberations or voting, and their shares are excluded from quorum and voting calculations. The authorisation must then be reported to and ratified by the general assembly, with a special report prepared by the statutory auditors.

These rules are particularly relevant within the context of a business combination because transactions are frequently negotiated by controlling shareholders or directors who may stand on both sides of the deal. Where such a situation exists, the conflicted party cannot vote at either board or shareholder level, which can materially affect approval thresholds and transaction timing.

Failure to comply may also give rise to liability. Under Article 253-1 of the Code of Commerce, directors and managers who, in bad faith, use company assets or credit for personal purposes or in favour of an entity in which they have an interest may incur criminal penalties. In parallel, Article 364 of the Penal Code criminalises obtaining personal benefit through one’s position.

Lebanese law does not forbid a hostile tender offer. In theory, a bidder can make a public offer to shareholders even if the target company’s board does not support the transaction.

In practice, however, this rarely happens. Most Lebanese companies are closely held and often family-owned, with control concentrated among a small number of shareholders. Because gaining control usually requires the cooperation of these principal owners, an acquirer normally negotiates with them first. Public offers therefore tend to formalise an agreed sale rather than serve as contested takeover attempts.

Lebanese law does not establish a specific framework authorising takeover defensive measures. In practice, the board of directors has limited ability to resist an acquisition because key corporate actions remain within the powers of the shareholders.

In joint-stock companies, measures that could effectively block a takeover, such as capital increases, issuance of new shares, mergers, or amendments to the articles of association, require approval of the extraordinary general meeting. Directors therefore cannot unilaterally adopt structural defences or frustrate a bid if the shareholders are willing to proceed.

The board’s role is mainly advisory. Directors may evaluate the offer, issue a recommendation, and inform shareholders of legal or regulatory risks (for example, competition or sectoral approvals). They must also disclose conflicts of interest and abstain from deliberations where applicable.

Accordingly, classic defensive tactics are not a feature of Lebanese takeover practice. The outcome of a bid is primarily determined by shareholder approval rather than by defensive action taken by the board.

This matter is not applicable in this Lebanon.

This matter is not applicable in Lebanon.

Please refer to 9.2 Directors’ Use of Defensive Measures.

Court litigation is not a common feature of M&A transactions in Lebanon. Disputes arising out of business combinations are more often resolved privately, as transaction documents frequently contain arbitration clauses and the parties generally prefer confidential dispute resolution over public court proceedings.

This preference is largely practical. M&A disputes typically concern valuation adjustments, representations and warranties or post-closing obligations, matters that parties consider commercially sensitive. Arbitration allows them to appoint specialised decision-makers, preserve confidentiality and avoid the procedural delays often associated with ordinary litigation. As a result, while judicial challenges are possible in principle, arbitration is usually the primary forum for resolving M&A-related disputes.

However, following the Banking Reform Law, disputes follow a different route whereby decisions of the HBC relating to bank restructuring, including imposed mergers, are subject to appeal before a special judicial body which the law provides for but which has not yet been constituted, marking a shift toward specialised administrative litigation for state-mandated deals.

When disputes arise, they are rarely brought at the negotiation stage. Parties generally prefer to preserve the transaction and continue discussions rather than initiate formal proceedings while the deal is still being structured.

Disputes more commonly appear after signing or following closing. They typically relate to breach of representations and warranties, undisclosed liabilities or non-compete obligations. For that reason, proceedings, most often arbitration, are usually commenced in the post-closing phase, once the parties begin performing the contract and disagreements materialise in practice.

The COVID-19 pandemic, combined with Lebanon’s financial crisis, has significantly influenced the drafting of force majeure and material adverse change (MAC) clauses in transaction agreements.

Lebanese courts and arbitral tribunals apply a restrictive interpretation of force majeure, requiring an unforeseeable, irresistible and external event that makes performance impossible. While the pandemic qualified as an external event, its economic and valuation effects were generally treated as commercial risk unless epidemics or similar events were expressly covered by the contract.

As a result, parties increasingly rely on detailed MAC provisions. Rather than broad “material adverse effect” language, agreements now often include objective financial triggers, such as defined reductions in revenue or EBITDA, in order to allocate risk more clearly between signing and closing.

Lebanese law does not recognise a doctrine allowing courts to revise a contract merely because performance has become excessively onerous. Consequently, broken-deal disputes largely depend on the wording of MAC and termination provisions.

Shareholder activism is not a significant force in Lebanon. The legal framework does not recognise activist shareholders as a distinct category, and most companies are closely held.

Following the 2019 amendments to the Code of Commerce, corporate governance principles were strengthened, including equal treatment of shareholders, cancellation of double voting rights, enhanced disclosure obligations, and reinforcement of directors’ duties of loyalty. Shareholder influence therefore operates through statutory rights, access to information and corporate governance safeguards rather than through public campaigns.

There is no established practice of shareholders publicly pressuring companies to enter into M&A transactions or major restructurings. Strategic decisions such as mergers, splits or transformations are governed by statutory procedures and shareholder approval thresholds.

In Lebanon, interference with an announced transaction typically takes a judicial rather than a public-relations form. Minority shareholders or creditors who consider themselves prejudiced by a proposed merger or acquisition do not generally resort to media campaigns; instead, they seek relief through the courts.