Where completion of the transaction is contingent on receipt of merger control clearances, it will also be important to ensure that any steps taken to prepare for implementation of the deal do not infringe gun jumping rules which also carry heavy sanctions. Failure to make such filings could expose the parties to sanctions (including significant fines or liability for directors) regardless of whether competition issues are raised by the JV. Parties also need to be careful not to miss mandatory filings in jurisdictions that may have little or nothing to do with the operational location of the JV but which catch transactions on the basis of the revenues or assets held by the parent companies (for example, the EU regime captures joint ventures operating entirely outside the EU if the corporate groups of the parent companies achieve sufficient revenues in the EU). over its budget, business plan, major investments or appointment of senior management) or because the regimes in some jurisdictions catch low levels of strategic influence or shareholding (for example, in the UK acquisitions of material influence over a business are covered a concept which is interpreted broadly). This may be because the minority shareholder will have veto rights over important aspects of the JV company’s strategy (e.g. Identifying required regulatory or merger control approvals: Joint venture arrangements take many different forms but even minority investments may require merger control clearances. Here we consider key matters which will be relevant not only at the outset of a joint venture, but also throughout the life of the arrangement.įor guidance or further information on particular topics mentioned here, you will find contact details for the Norton Rose Fulbright team in the biographies listed below.
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