International M&A Subcommittee Meeting

Minutes of: International M&A Subcommittee Meeting

Held at: Silver Room, Mezzanine Level, Tower Building, Sheraton Denver Downtown Hotel, Denver, Colorado, USA

At: 2.30pm - 4.30pm, Friday, 23 April 2010

Chair: Stan Freedman

1 Welcome and Introductions – Stan Freedman welcomed those in attendance and, in accordance with usual practice, each person present introduced themselves.

2 Audrey Chen (Jun He Law Offices, Beijing) gave a presentation on Current M&A Developments in China, which included an outline of regulation of M&A and Foreign Direct Investment in China. In particular, she covered:

(1) Central government policies and directions;

(2) Key issues in foreign direct investment and M&A including:

(a) restrictions;

(b) business structures;

(c) process of setting up a co-operative joint venture (CJV);

(d) other issues including dealing with State-owned assets;

(3) Update re legislation affecting foreign direct investment and M&A including changes to:

(a) taxation of representative offices;

(b) SAIC rules on foreign investment partnerships;

(c) merger control law and MOFCOM Practice;

(4) The practical approach to foreign direct investment and M&A in China.

3 Cynthia Kalathas reported on the status of the Survey on Post-Closing Dispute Resolution in International M&A Deals. Cynthia reported that 30 different countries have now completed surveys, and that a progress report is available on our website. There are several countries outstanding including Korea, UAE and China. The survey in its completed form may be posted on the ABA website or, possibly, may become an ABA publication.

4 Christiaan de Brauw and Reid Felman presented on Supranational Business Entities and Merger Structures in Europe. The presentation included:

(1) an outline of the EU legal environment;

(2) cross-border merger structures – without statutory merger;

(3) cross-border statutory mergers;

(4) Societas Europa entities.

5 Stan Freedman gave an update on the Public Company Acquisition Issues Questionnaire. He indicated that ultimately it was proposed to create an international appendix to the public company acquisition agreement.

6 Mireille Fontaine provided an update in relation to the International Joint Venture Project. Mireille reported that 43 countries have contributed, and contributions will be updated over the next 3 months by a 10-member editorial committee, which will consult with each contributing country to ensure the contributions remain accurate. She reported that the aim was to publish early next year.

7 Frank Picciola reported on the status of the Foreign Direct Investment Survey. Frank reported that firms from 10 countries had responded to date, and that it was intended that answers to the questionnaire world be available on our website. Ultimately, consideration would be given to the possibility of publishing the results. Leigh Walton commented that the M&A Committee supports production of content on the website in this way, so that the output is more immediate.

8 Peter Haver reported on IP Issues in International M&A. He summarised key points from a recent paper including:

(1) IP general background – patents, trademarks, copyright, trade secrets and other IP;

(2) techniques for dealing with IP ownership issues in M&A transactions;

(3) target’s transfer of IP rights to buyer;

(4) third party rights and seller’s IP;

(5) possible infringement of third party IP rights (note these materials were also posted on the website).

9 Future Projects and Programs – Stan Freedman requested suggestions for additional topics for future projects and programs.

10 Open Mike – Daniel Rosenberg (in attendance on the telephone) thanked Stan Freedman for chairing. Daniel mentioned a number of recent developments in the UK including: (1) the new UK Bribery Act 2010, which potentially attaches to acts by foreign entities and has broader application than US law – Daniel mentioned that the new Act includes the crime of failing to prevent bribery, applies to corruption in the private sector as well as the public sector, contains no carve-out for facilitation payments (payments to a foreign public official of such a nature are prohibited) and applies to both the giving and the receiving of a bribe;

(2) Takeover Code – Daniel mentioned changes which give more focus on the interests of the acquirer;

(3) issues relating to the recoverability of VAT on deal costs.

Stan Freedman thanked everybody for attending and declared the meeting closed.

Website

The Subcommittee's website at www.abanet.org/dch/committee.cfm?com=CL560016 contains:

 the slides from the presentation by Audrey Chen on Current M&A Developments in China;

 the slides from the presentation by Christiaan de Brauw and Reid Felman on Supranational Business Entities and Merger Structures in Europe;

 the handout from the presentation by Peter Haver on IP Issues in International M&A;

 the questionnaire relating to the Subcommittee’s Foreign Direct Investment project;

 the questionnaire and draft general report relating to the Subcommittee’s Post- Closing Dispute Resolution in International M&A Deals project;

 a memorandum by Daniel Rosenberg expanding on his comments at the meeting on the recoverability of VAT on deal costs;

 details of the Subcommittee’s publications, future meetings, work-in-progress and past program materials.