The M&A market seems to be picking up since the second half of 2023. After a very active pandemic year in 2021, M&A activity slowed down in Slovakia in 2022 and the start of 2023. However, market participants appear to be adjusting to challenging macroeconomic conditions, such as high energy prices, high interest rates, and inflation, as well as challenging political conditions, such as the war in Ukraine.

There has been a significant uptick in M&A activity, signalling a shift from previous trends. Despite being early in 2024, the current level of M&A engagement notably surpasses that of the same period twelve months prior.

Strategic investors have been more active in the past couple of months, especially those that are not dependent on external financing and are looking to expand their business to a new region. We are also starting to see increased activity from private equity firms on both sides of M&A transactions – either disposing of portfolio companies or investing into various sectors.

It is difficult to provide reliable data since the vast majority of transactions in Slovakia are private and rarely announced. From publicly available sources, we have seen some interesting deals in the insurance, energy and telecom sectors. There have also been interesting deals in the real estate sector, which is a positive development given the fact that the real estate sector, especially commercial real estate, was badly hit by the COVID-19 pandemic.

Other industries that have been particularly affected by the COVID-19 pandemic include retail and tourism. The automotive industry, a core of the Slovak economy, was given a boost by the arrival of Volvo in Slovakia. However, the industry’s full recovery hinges on the complete recovery of companies within its supply chain.

The majority of Slovak transactions are private and structured as a transfer of ownership interest (obchodný podiel) when the target is a limited liability company (spoločnosť s ručením obmedzeným), or a sale of shares (akcie) when the target is a joint stock company (akciová spoločnosť).

Other structures of M&A transactions in Slovakia include:

• asset deals – ie, the acquisition of certain specific assets, such as real estate;
• transfer of an enterprise/part of an enterprise (prevod podniku alebo jeho časti) – ie, the acquisition of assets, rights and obligations necessary to operate a business;
• fusion (fúzia) – ie, a merger (where one or more companies are dissolved and their capital is transferred to an existing company) or amalgamation (where one or more companies are dissolved and their capital is transferred to an emerging company) of companies;
• de-merger – ie, a full de-merger (where the de-merged company ceases to exist and its capital (imanie) is transferred to existing companies, newly established companies, or a combination of both, and a spin-off (where a (partially) de-merged company continues to exist while transferring some of its capital to one or more companies, whether existing or newly established, or a combination of both).

Furthermore, takeover bids and squeeze-outs are available for public joint stock companies with publicly traded shares, subject to certain conditions outlined in the Slovak Securities Act, which governs the rules of such procedures.

The new Transformation Act, which came into force on 1 March 2024, is now one of the most important sources governing rules relevant to M&A transactions.

The Slovak Commercial Code remains important legislation as it covers transfers of ownership interests of limited liability companies and the sale of an enterprise (or part thereof). It also includes corporate governance rules, including rights and obligations of corporate bodies.

The Slovak Civil Code, as the cornerstone of our civil law system, deals with general contractual matters.

Other relevant legislation depends on the nature of the target and the structure of the transaction. As mentioned in 2.1 Acquiring a Company, takeover bids and squeeze-outs, which are applicable when selling shares in joint stock companies, are governed by the Securities Act.

Regulated targets are subject to further rules specified in various acts – eg, the Civil Aviation Act, Act on Energy, Electronic Telecommunication Act, Banking Act, Insurance Act, Act on Broadcasting and Retransmission, and many others.

The Act on Protection of Competition includes conditions for merger control. Certain M&A structures necessitate compliance with the rules outlined in the Labour Code to address employment-related matters.

The relatively new FDI Act contains detailed conditions for screening transactions by foreign investors.

The new FDI Act, which came into force on 1 March 2023, affects foreign investors investing in Slovakia. As a result, transactions of foreign investors are subject to scrutiny by the Slovak Ministry of Economy. Foreign investors are investors from outside EU countries, therefore investors from, for example, the UK or USA, investing in Slovakia are affected by the FDI Act. Investments (asset deals, share deals of at least 10%, increase of shareholding to 20%, 33% or 50%, acquisition of control, acquisition of assets or rights to use such assets that are substantial for a target company) of foreign investors in certain sectors (military, defence industry, biotechnology, mass media, cybersecurity, etc) are subject to prior screening by the Slovak Ministry of Economy.

Investments (asset deals, share deals of at least 25%, increase of shareholding to 50%, acquisition of control) of foreign investors in other “non-critical” sectors are not subject to prior screening by the Ministry of Economy. However, the Ministry of Economy can still decide to screen such transactions within two years after closing, and order the foreign investor to reverse the transaction.

The antitrust regulations in Slovakia are primarily governed by Act No 187/2021 Coll., on the Protection of Competition (the “Competition Act”). The Competition Act includes, inter alia, provisions related to merger control to ensure fair competition in the Slovak market.

Under the Competition Act, business concentrations that meet certain thresholds are subject to mandatory notification to the Antimonopoly Office of the Slovak Republic for approval before they can be implemented.

Concentrations are (i) fusions (as defined in the Transformation Act) and (ii) acquisitions of direct or indirect control over an entrepreneur or any part thereof.

A concentration is subject to control by the Antimonopoly Office if:

• the joint total turnover of the participants of the concentration achieved during the accounting period that preceded the concentration in the Slovak Republic is at least EUR46 million and at least two participants of the concentration achieved a total turnover in the Slovak Republic of at least EUR14 million each for the accounting period preceding the concentration; or
• the total achieved turnover for the accounting period that precedes the concentration in the Slovak Republic:
1. of one of the participants of the concentration is at least EUR14 million, and at the same time the worldwide total turnover for the accounting period that proceeds the concentration of another participant of the concentration is at least EUR46 million, in case of a fusion;
2. of one of the participants, over which or over part of which control is acquired, is at least EUR14 million, and at the same time the worldwide total turnover for the accounting period that precedes the concentration of the other participant of the concentration is at least EUR46 million, in case of the acquisition of direct or indirect control over an entrepreneur.

The Antimonopoly Office assesses whether a proposed concentration would significantly impede competition in the Slovak market. If the Antimonopoly Office determines that a proposed concentration would harm competition, it can impose conditions on the concentration or prohibit it altogether.

Requirements related to labour law aspects depend on the structure of the M&A transaction.

In share deals, there are no changes related to a target (which is the employer) and the employment conditions remain the same. Employees or their representatives are rarely part of M&A negotiations in share deals. Acquirers often require a break-down of costs of all employees and information on bonus schemes during the due diligence process.

In case of the sale of an enterprise (part thereof), the rights and obligations from the employment relationships are transferred from the seller to the buyer. As a result, there is a change of employer and thus, the employees or their representatives must be informed in advance of such change. In accordance with the Slovak Labour Code, both the seller and the buyer have an obligation to inform employees or their representatives in writing at least one month before closing regarding:

• the date or proposed date of transition;
• the reasons for the transition;
• the employment, economic and social consequences of the transition (ie, changes affecting employees); and
• planned transition measures relating to employees (for example, will there be restructuring and related lay-offs).

Planned transition measures must be consulted with employees or their representatives separately at least one month before closing.

In asset deals, whether the rights and obligations from the employment relationships will pass to a buyer will depend on various circumstances that characterise the asset deal. In essence, the employment relationships will pass to a buyer if all assets being transferred form an economic unit that has preserved its identity. It is advisable to conduct a detailed legal analysis in each asset deal to ascertain whether there is indeed a transfer of employees.

There are no special national security review processes for acquisitions in the Slovak Republic other than those stipulated in 2.3 Restrictions on Foreign Investments.

Litigating M&A disputes is quite rare in Slovakia. Significant transactions often incorporate arbitration clauses due to the expertise of arbitrators in handling complex M&A issues, and the enhanced confidentiality afforded by arbitration proceedings.

Regulators (such as the National Bank of Slovakia, the Antimonopoly Office, the Ministry of Economy, etc) may decide on certain aspects of transactions they are regulating or which need their approval in respective areas. Such decisions are mostly eligible for review by respective courts. 

The most significant law adopted in Slovakia over the past 12 months is the new Transformation Act, which came into force on 1 March 2024. This act aims to provide a modern and comprehensive legal framework for various types of M&A transactions, including changes in the legal form of companies, both domestically and across borders.

Another important change of law affecting M&A is the new FDI Act which entered into force on 1 March 2023. The FDI Act stipulates the rules for screening foreign (generally non-EU) investments.

The Slovak Securities Act deals with the takeover procedure.

The vast majority of transactions in Slovakia are private and offers are launched directly by third parties or by existing shareholders. Any stakebuilding strategies are very rare.

When the shares of a company are publicly traded, and a shareholder has acquired or transferred the shares of such company (and such shares have voting rights associated with them) to another person, this person is obliged to notify the company of their ownership of these voting rights if they reach, exceed, or fall below specific thresholds (5%, 10%, 15%, 20%, 25%, 30%, 50%, and 75%).  This notification requirement applies even if the change in voting rights occurs due to circumstances altering the distribution of these rights.

Acquiring a share of 33% or more in a company with publicly traded shares triggers the obligation to conduct a mandatory takeover. The shareholder must notify its obligation to conduct a mandatory takeover to the board of directors of the target company and to the National Bank of Slovakia. The shareholders must further publish the notice of the takeover bid in a daily newspaper with national coverage in the Slovak Republic and in those member states on the regulated markets of which the shares of the target company were accepted for trading.

If the shareholder conducting the takeover bid accumulates shares representing at least 95% of the target company’s share capital and carrying at least 95% of the voting rights, they have the right to squeeze out the remaining shareholders. Similar notification and publishing obligations apply in this case as with mandatory takeovers.

The are no shareholding disclosure thresholds in private transactions.

The material shareholding disclosures are stipulated by law and cannot be changed.

Generally, companies may (and do) add other hurdles to stakebuilding in their incorporation documents requiring consent from the company, its bodies, special committees (eg, investment committees) or other shareholders (requirement to waive pre-emptive rights).

Dealings in derivatives are allowed. The respective license of the National Bank of Slovakia is required (subject to certain exemptions).

The reporting obligations stipulated in 4.2 Material Shareholding Disclosure Threshold are also applicable to a person who directly or indirectly holds financial instruments (including derivatives) which entitle that person to acquire shares with associated voting rights. This requirement applies when such financial instruments are issued by a company whose shares are publicly traded, and the total number of voting rights held directly or indirectly by the individual, along with those related to financial instruments, reaches, exceeds or falls below the limits stipulated in 4.2 Material Shareholding Disclosure Threshold.

From a competition perspective, an option to purchase or convert shares cannot in itself confer sole control unless the option will be exercised in the near future according to legally binding agreements. However, in exceptional circumstances an option, together with other elements, may lead to the conclusion that there is de facto sole control, potentially raising competition concerns.

In a private transaction, there is no obligation to inform about the purpose of the acquisition or intention to control the company.

In the takeover bid proposal, the shareholder must disclose, inter alia:

• its goals and intentions in relation to the target company;
• the goals and intentions that relate to the future use of the target company’s assets, the continuation of the target company’s business activities, the reorganisation of the target company and companies controlled by the target company;
• changes in the statutory body and the supervisory body;
• changes in the by-laws;
• changes in the number of employees and employment conditions; and
• employee participation in profit-sharing and management matters.

In private transactions, there is no general obligation to disclose a deal. In most cases, a deal is discussed with the management. It also depends on how a deal is structured. Sometimes, the employees or their representatives must be informed about the transaction in advance (see 2.5 Labour Law Regulations).

In transformations (see 2.1 Acquiring a Company), proposals of the transformation projects must be submitted to the collection of deeds (zbierka listín), which is a publicly accessible register, at least one month before such proposal is approved.

The bidder must notify the board of directors of the target company and the National Bank of Slovakia of the decision to make a takeover offer in writing, and to publish such notification in a national newspaper.

Subsequently, after delivery of the notification, the board of directors of the target company informs the supervisory board of the target company of its content, and the board of directors of the target company and the bidder inform the representatives of the employees of the target company or employees directly of its content.

Market practice on timing of disclosure does not differ from legal requirements. The timing, however, may depend on the circumstances of the deal and the decision of the parties involved to announce the upcoming process.

The scope of due diligence depends mostly on the business of the target. The timing and budget may play an important role in identifying the scope of due diligence. In general, legal, tax and financial due diligence is conducted. In some cases, technical and environmental due diligence is performed too. Investors are starting to be more interested in ESG compliance. AML considerations have come under much closer scrutiny recently. The vast majority of due diligence processes are conducted through virtual data rooms, and the scope of due diligence itself has not been significantly impacted by the COVID-19 pandemic.

Exclusivity is sometimes requested by a buyer for a shorter period of time to prevent sellers from negotiating with other parties.

In deals related to private targets, the definitive agreement (share purchase agreement, merger agreement, agreement on sale of an enterprise, etc) is typically negotiated and signed during the signing stage.

On the other hand, bidders making a tender offer (takeover bid) must submit to the National Bank of Slovakia a takeover proposal containing strict requirements stipulated in the Securities Act. From a legal point of view, a takeover proposal is a public proposal to conclude a contract. The terms and conditions of a takeover proposal cannot be negotiated. The shareholders of the target may either accept the proposal or reject it. The takeover proposal must be approved by the National Bank of Slovakia. If the shareholder(s) of the target accept the takeover proposal, they enter into a definitive agreement on the transfer of shares with the bidder.

The timeframe in private transactions depends on the business of the target, and consequently the scope of due diligence, parties involved, preparedness of the sellers to sell, whether it is a privately negotiated business or an auction, etc. The usual timeframe for a private transaction is three to four months. If regulatory approvals or merger clearance are required, this can prolong the transaction closing timeframe.

The public takeover process is governed by strict rules stipulated in the Securities Act, including prescribed timelines. Depending on the circumstances, public takeovers take approximately three to six months.

If a bidder, alone or together with persons acting in concert with it, reaches or exceeds the controlling stake in the target, it must make a takeover bid for all the shares of such target. A controlling stake means a share of at least 33% of the voting rights associated with the shares of the target company.

Cash consideration is much more common than any other form of consideration in private deals in Slovakia. From time to time, earn-out structures are used, especially when the top management or key persons remain with the company to ensure operational continuity.

In takeovers and mandatory takeovers, the consideration may be in cash or in securities.

As a takeover offer is a strictly regulated process, special conditions cannot be agreed upon. However, the bidder may set the minimum number of shares that it undertakes to acquire, or determine the number of securities it wants to acquire (“partial takeover offer”). These conditions are forbidden in a mandatory takeover.

When the takeover is voluntary, there are no thresholds, although, as mentioned in 6.4 Common Conditions for a Takeover Offer, the bidder may set the condition of the minimum number of shares that it undertakes to acquire or submit a partial takeover offer.

When the takeover is mandatory (see 6.2 Mandatory Offer Threshold), the bidder must bid for all shares in the target company.

In a private transaction, it is possible to condition the completion of the deal on the buyer obtaining financing but this is very rare and such a condition is typically unacceptable to the seller.

In public takeover bids, the funds must be secured. The bidder must state in the takeover offer information on the sources and method of financing of its obligations resulting from the takeover offer. Additionally, any anticipated indebtedness related to meeting these obligations must be transparently disclosed.

In private transactions, non-solicitation/non-compete clauses are used. Non-compete clauses, however, must be used reasonably in order not to trigger antimonopoly issues. Break-up fees are also used but they are uncommon.

In public takeover bids, the conditions of the offer are strictly stipulated by the law, thus the types of deal security measures seen in private transactions cannot be applied.

With the COVID-19 pandemic receding, there have not been any new contractual considerations or tools for managing “pandemic risk”. In fact, extraordinary measures adopted during the COVID-19 pandemic or the existence of a state of emergency are often expressly excluded from Material Adverse Change (MAC) clauses.

In private transactions, the buyer will usually seek additional governance rights through a shareholder agreement, which outlines additional corporate governance rules and share transfer restrictions.

In public companies, shareholder agreements are not an option. However, more sophisticated rules related to corporate governance and duties of corporate bodies are usually included in a company’s by-laws.

It is possible for shareholders to vote by proxy in Slovakia.

In limited liability companies, the proxy cannot be an executive (konateľ) or member of the supervisory board of the company.

In joint stock companies, the proxy cannot be a member of the supervisory board of the company. This restriction does not apply to public joint stock companies.

Under the Transformation Act, the shareholders that (i) were shareholders of a participating company at the time of the general meeting that decided on the transformation; (ii) were present at this general meeting; (iii) voted against the approval of the transformation project proposal; and (iv) requested to record their dissenting opinion in the minutes, and at the same time asked for a draft agreement on the sale of their shares, have the right to demand that the successor company buys the shares from them for adequate monetary consideration.

In public companies, a shareholder who conducted a takeover bid that was not partial or conditioned has the right to squeeze out all the remaining shareholders of the target company if it owns shares representing at least 95% of the share capital of the target company carrying at least 95% of the voting rights in the target company.

Obtaining irrevocable commitments to tender or vote by principal shareholders of the target company are not common in Slovakia. Obtaining such commitments should be legally possible. However, they would rarely be binding.

As mentioned in 5.1 Requirement to Disclose a Deal, the bidder must notify the board of directors of the target company and National Bank of Slovakia of its decision to conduct a takeover offer in writing, and to publish such notification in a national newspaper. Once published in a newspaper, the bid becomes public.

Private transactions tend to be more discreet. Transformation project proposals must be submitted to the collection of deeds (zbierka listín), which is a publicly accessible register, at least one month before such proposal is approved.

For traditional share deals or asset deals it is quite common that they only become public after closing (through certain mandatory changes in the companies register).

When the issuance of shares is conducted through a public offer for a share subscription, a prospectus must be drawn up. Regulation (EU) 2017/1129 lays down requirements for the drawing up, approval and distribution of the prospectus to be published when securities are offered to the public. In Slovakia, the obligation to publish a prospectus does not apply to public offers of shares if the total value of each such offer in the European Union calculated over a period of 12 months is less than EUR1 million.

In takeover offers, the bidder’s proposal, if it involves exchanging the shares of the target company for other securities, must include the number, type, form and nominal value of these securities and their exchange ratio for the shares of the target company, as well as the methods used to determine the exchange ratio.

In mergers, the merger project must contain, inter alia, the determination of the exchange ratio of the shares of the successor company intended to be exchanged for the shares of the dissolving companies, indicating their form, type and nominal value, and the auditor’s statement as to whether the share exchange ratio and any additional payments are adequate.

In private transactions, there is no requirement to produce financial statements. In tender offers, or in prospectuses, the bidder/issuer must prove its financial condition by submitting financial statements.

In private transactions, certain transaction documents will be easily accessible in public registers at some point. See 5.1 Requirement to Disclose a Deal regarding transformations.

A takeover offer (with all relevant information, including the consideration offered for shares) which was approved by the National Bank of Slovakia must be published in nationwide newspapers.

In traditional private share deals, the parties often opt to only submit a so-called transfer document to the commercial register – ie, a share transfer document that only contains statutory requirements and references to a “General/Master SPA”.

In general, directors are obliged to perform their duties with due care, which includes the obligation to perform them with professional care and in accordance with the interests of the company and all its shareholders. In particular, they are obliged to obtain and take into account all available information related to the subject of the decision, to maintain confidentiality about confidential information and facts, the disclosure of which to third parties could cause damage to the company or endanger its interests or the interests of its shareholders, and in the exercise of their powers they must not prioritise their interests, the interests of only some shareholders or the interests of third parties before the interests of the company.

In transformations, the board of directors of each participating company is obliged to prepare a written report in which it explains and justifies the transformation from a legal and economic point of view, the details of the proposal of the transformation project, especially the exchange ratio of shares. The written report must indicate specific difficulties in determining the share exchange ratio, if any.

In the public takeover, from the notification of the takeover offer until the results of the takeover offer are published, members of the board of directors of the target company, the supervisory board of the target company and members of the executive bodies of the target company are prohibited from taking any measures or actions that could impede shareholders of the target company from making an informed decision on the takeover offer, except for negotiating more favourable terms or seeking a competing takeover offer.

The members of the board of directors of the target company, in co-operation with the members of the supervisory board of the target company, with the exception of those who carry out a competitive takeover offer, are obliged to draw up a joint opinion on the takeover offer within five working days from the date of delivery of the takeover offer, in which they must state:

• whether the takeover offer is in line with the interests of the shareholders, employees and creditors of the target company, together with the reasons on which this opinion is based;
• the consequences that the implementation of the takeover offer will have in relation to the interests of the target company, the interests of its shareholders, creditors and especially employees;
• the strategic plans of the bidder regarding the target company and their expected impact on the employment and location of the performance of business activities of the target company;
• possible different opinions of anyone participating in the preparation of the joint opinion;
• any possible legal defects or factual defects in the takeover offer; and
• any potential conflicts of interest between the persons preparing the joint opinion and the interests of the target company or its shareholders, including whether board members are shareholders of the target company.

It is unusual for a board of directors to formally create a special or ad hoc committee to advise in M&A transactions. Instead, special working teams are often assembled to focus on the specific deal, particularly in larger transactions.

Slovak law does not recognise the business judgement rule in respect of liability of directors. Instead, the liability of the directors is objective – ie, it is presumed.

Since most transactions in Slovakia are private, directors do not usually have their own outside advisers (ie, for themselves). The advisers (legal, financial, tax, accounting, and sometimes special advisers, like technical or environmental experts) are, in most cases, retained by buyers on one side, and sellers (ie, shareholders) on the other side.

In transformations, auditors must be appointed by the participating companies in order to review transformation projects of each participating company and prepare a written report thereof. In mandatory takeovers, the appraiser must determine an adequate consideration for shares of the target company. In both cases, the involved parties typically engage other advisers (mostly lawyers) to help them with the process.

When the issuance of shares is conducted through a public offer, all involved parties (issuer, arranger, administrator) typically have legal counsels. The issuer’s auditors must be involved too.

Slovak law recognises rules regarding conflicts of interest of directors (executives), or managers (employees). Conflicts of interest rules may be extended to shareholders. However, such conflicts are rarely tried and the case law in this regard is not developed.

Hostile takeover offers are rare in Slovakia. The reason is that the takeover offers must follow a strict and formalised procedure under the supervision of the National Bank of Slovakia, and the respective law clearly stipulates the role of the board of directors in this process.

In private transactions, approval for share transfers is typically granted by shareholders rather than executives or the board of directors. However, if the board does have authority over share transfers, any reasons for denial must be clearly stated in the target company’s by-laws and cannot be vague.

Directors have limited scope to employ defensive measures.

As mentioned in 8.1 Principal Directors’ Duties, in takeover offers, members of the board of directors of the target company, the supervisory board of the target company and members of the executive bodies of the target company are prohibited from taking any measures or actions that could impede shareholders of the target company from making an informed decision on the takeover offer, except for negotiating more favourable terms or seeking a competing takeover offer.

As mentioned in 9.1 Hostile Tender Offers, in private transactions, the board of directors may only deny a transfer of shares based on reasons listed in the target’s company by-laws.

The most common defensive measures of the board of directors in a takeover offer are negotiating more favourable terms of the takeover offer and seeking a competing takeover offer. The COVID-19 pandemic did not change this in any way.

As in any other cases, when enacting defensive measures, directors must comply with their general obligations to perform their duties with due care as described in 8.1 Principal Directors’ Duties. In particular, in the exercise of their powers, they must not prioritise their interests, the interests of only some shareholders or the interests of third parties before the interests of the company.

The directors cannot just say no. As mentioned in 9.2 Directors’ Use of Defensive Measures and 9.3 Common Defensive Measures, their ability to use defensive measures is rather limited. They may influence the takeover offer by finding a more favourable competing takeover offer or by submitting a well-reasoned negative opinion that the takeover offer is not in line with the interests of the shareholders, employees and creditors of the target company, stipulating the grounds on which this opinion is based.

See 3.1 Significant Court Decisions or Legal Developments.

There is no general rule regarding the stage at which a deal is brought to the court. Mostly, it is after completion (eg, litigation stemming from a breach of warranties). It is possible to claim damages in the case of unfair contract negotiations, but this is rare. Sophisticated parties usually establish work on the basis of the consensus rule, which holds that unless everything is agreed, nothing is agreed.

“Broken deal” disputes are uncommon.

Shareholder activism is not a significant force in the country. The size of the market does not attract big hedge funds or similar investors that invest in minority stakes in companies and try to influence them from the inside. Furthermore, since most companies in Slovakia are private, the importance of shareholder activism is further diminished.

However, minority shareholders in Slovakia do have certain rights protected by the Slovak Commercial Code and the Securities Act. These include rights:

• to participate in the shareholder meetings and to vote at it;
• to request information and explanations regarding the affairs of the company;
• to submit proposals for the agenda at shareholder meetings;
• to call shareholder meetings (subject to having at least a 10% shareholding in limited liability companies, and 5% shareholding in joint stock companies);
• to demand information/explanations from the company;
• to review certain documents; and
• to file a petition with the courts to have a shareholders’ resolution declared invalid if it is in conflict with the law or the internal documents of the company.

The Securities Act allows a minority shareholder, inter alia:

• to file a petition with the courts to have a shareholders’ resolution, by which the transfer of shares in a squeeze-out was approved, declared invalid; and
• to object to the majority shareholder about the inadequacy of the consideration offered for their shares in a squeeze-out process, and if unsuccessful, demand that the court takes a decision on adequate consideration.

It is not common for shareholder activists to encourage companies to enter into M&A transactions, spin-offs or major divestitures. The pandemic had no impact on this.

See 11.2 Aims of Activists.