Public mergers and acquisitions in the Russian Federation

The country-specific Q&A glances at:

current market activity;
the regulation of suggested and hostile bids;
pre-bid formalities;
including due diligence;
procedures for announcing and making an offer (including documentation and mandatory offers);
stakebuilding, and agreements;
post-bid considerations (including squeeze-out and de-listing procedures);
tax issues;
defending hostile bids;
other regulatory requirements and restrictions;
possible reform of proposals.

What is the current status of the M&A market in your jurisdiction?

In 2021, both deal numbers and values increased. Despite the sanctions imposed on numerous Russian private and public companies., foreign investment also increased

M&A deals totaled USD63 billion, less than 1% of the global M&A market

Oil and gas sector M&As are prominent, particularly liquid natural gas (LNG) projects.

In 2018 and 2019, the key driver of the Russian M&A market was NOVATEK’s share sales in the Arctic LNG-2 project to:

Total in 2018.
China’s CNPC and Japan’s Mitsui in 2019.

The innovation and technology sector is second in investment value and deals.

The most important deals were the following:

Sale of software developer Luxoft to the USA’s DXC Technology for nearly USD2 billion.
Acquisition of Avito shares by South Africa’s Naspers media group.
Initial Public Offering (IPO) by HeadHunter (hh.ru) recruitment agency, the first Russian company to go public in two years.

True public takeovers remain rare in Russia. The vast majority of M&As are:

Private (for example, Arctic LNG-2 project is managed through a limited liability company controlled by NOVATEC).
Acquisition of a foreign holding company (for instance, the sale of Luxoft).

What are the primary means of obtaining control of a public company?

There are several ways to acquire a public company (public joint-stock company (PJSC)), in particular:

The direct private purchase of shares.
The indirect private purchase of shares by acquiring control over the company’s majority shareholder. This is typically done outside the Russian jurisdiction via developing a foreign particular purpose vehicle (SPV) that is the majority shareholder in a public company.
Voluntary public offers. These are:
- voluntary acquisitions of more than 30% of the vote shares in a PJSC through a public offer; and
- Voluntary acquisitions of the voting shares in a PJSC through a public offer by a bidder that was the exclusive shareholder in a public company and as a result of the reorganization of that company (in the form of a merger with or accession to another company) acquired more than 95% of the shares in the reorganized public company.
Mandatory public offers (see Question 16).
Reorganization in the form of a merger or acquisition. These are pretty rare.

All public takeover bids are subject to rigid rules, including pricing mechanics, though voluntary public offer rules are more flexible.

The public takeover bid rules also involve certain private companies. Generally, these are non-PJSCs that used to be open joint-stock companies (the form preceding the PJSC).

Hostile bids

Are hostile bids allowed? If so, are they common?

There is no legal difference between friendly and hostile takeovers. Hostile takeovers are unusual because few public companies have truly dispersed share capital. Most public companies include a key majority shareholder (either a single person or a group of affiliates), and their managers are controlled by one or a group of significant shareholders. The board can only give suggestions on a public offer and has no legal methods of blocking a public acquisition.

Regulation and regulatory bodies

How are public takeovers and mergers regulated, and by whom?

Principal regulations

The critical legislation regulating public takeovers and mergers includes:

Federal Law No. 208-FZ on Joint-Stock Companies, 26 December 1995 (JSC Law). This is the critical source of rules on public takeovers.
Federal Law No. 39-FZ on the Securities Market, 22 April 1996.
Federal Law No. 135-FZ on Protection of Competition, 26 July 2006.
Federal Law No. 160-FZ on Foreign Investment in the Russian Federation, 9 July 1999.
Federal Law No. 57-FZ on the Procedure for Making Foreign Investments in Business Entities of Strategic Importance for National Defence and State Security, 29 April 2008.
Regulations of the Bank of Russia No. 477-P on Requirements on the Procedure for Individual Actions about Acquisition of More than 30% of the Shares in Joint-Stock Companies and State Control over Acquisition of Shares in a Joint-Stock Company, 5 July 2015.

Regulator

The Bank of Russia regulates public takeovers, specifically the Department of Corporate Affairs.

Other regulators (for example, the Federal Anti-monopoly Service) can also be involved, depending on the type of transaction and the target’s primary activities.

Pre-bid / Due diligence

What due diligence inquiries-inquiries does a bidder generally make before making a recommended and hostile bid? What information is in the public domain?

Recommended bid

Public acquisitions are most commonly made through recommended bids. In a suggested bid, the acquirer is dealing with one or a group of significant shareholders and can therefore be provided with almost any information about the target and conduct a full due diligence investigation into the target’s legal and financial status. Certain exceptions can apply if the target company is a regulated entity. For example, if the target company is a bank, who should consider the rules on banking secrecy.

If the bidder already possesses the target’s shares, it can obtain certain information directly from the target. The amount of intake usually depends on the size of the bidder’s shareholding. The most exclusive access is available to a shareholder (or several shareholders acting in concert) possessing more than 25% of the target’s shares. They can access the target’s corporate and most of its financial documents.

Hostile bid

A complete due diligence analysis is unlikely in a hostile bid. A hostile bidder can receive specific information from the public domain, but this does not usually provide a proper risk assessment and affects the price determination. A fuller risk assessment is possible if the bidder is already a shareholder in the target and has access to more information.

Public domain

Key public references of information include:

The Unified State Register of Legal Entities is operated by the tax authorities and other official corporate registers (for example, Fedresurs). These registers contain the primary corporate information on every legal entity in the Russian Federation, including the companies:
- Articles. However, these do not provide information on the target’s assets and financial standing and do not enable the bidder to make an adequate assessment of its legal and financial exposure;
- particulars;
- financial position (whether in good standing or liquidation/reorganization);
- amount of issued capital; and
- Licensing data.
The Unified State Register of Real Estate includes information on fundamental properties, owners, and encumbrances.
Commercial Court Case Catalogue (CCCC) information system (Информационная система «Картотека арбитражных дел»)(КАД)). This system provides information on the target company’s litigation proceedings.
Obligatory disclosures. Most public companies must release certain information into the general environment, in particular:
- details about their management (CEO, board of directors, and management board);
- annual report and annual financial report;
- list of affiliates;
- material, corporate decisions; and
- Information about events that might significantly influence their shares’ market value.

Secrecy

Are there any rules on maintaining secrecy until the bid is made?

A voluntary or mandatory public offer must comply with a particular procedure. First, who must file the request with the Bank of Russia? Second, who must send it to the target company, distributing it to shareholders. The bidder must not disclose the terms and conditions of the offer until it is sent to the target company (see Question 12).

Agreements with shareholders

Is it common to obtain a memorandum of understanding or undertaking from critical shareholders to sell their shares? If so, are there any disclosure requirements or other restrictions on the nature or terms of the agreement?

Hostile bids

Hostile bids are very rare. Typically, public takeovers are structured through either direct acquisition of a majority shareholding from a particular existing shareholder (or several shareholders) or a public offer. Even voluntary public offers are usually made by bidders already shareholders in the target and have sufficient knowledge of the company’s business, financial status, and corporate affairs.

Privately negotiated acquisitions

If the acquisition is privately negotiated, it is common for the bidder to enter into a memorandum of understanding or other preliminary agreement with the seller before a due diligence investigation is carried out. These initial agreements are not legally binding, except for a minimal number of clauses (for example, exclusivity, confidentiality, and break-up fees). The bidder can rarely enter into a conditional binding sale and purchase agreement at the start of the process. The bidder should care in drafting the contract, especially if they need to obtain anti-monopoly or other regulatory clearance for the transaction.

Public offers

Preliminary agreements are not expected if the acquisition is made through a public offer.

Disclosure

There are no specific rules on disclosing preliminary agreements. However, certain provisions, particularly legally binding ones, can require anti-monopoly clearance or disclosure as a material change event (if the bidder is a public company).

Stakebuilding

If the bidder decides to build a stake in the target (either through a direct shareholding or by using derivatives) before announcing the bid, what disclosure requirements, restrictions, or timetables apply?

Until the bidder accumulates a 30% shareholding, there are no restrictions on acquiring shares in the target before the bid is formally announced. When the 30% threshold is exceeded, further acquisition of shares must be by the mandatory public offer (see Question 16). If the 30% threshold has been exceeded, to protect the interests of the minority shareholders until the binding offer is made, the bidder can only vote with 30% of their shares (these rules also apply to a mandatory offer made as a result of exceeding the 50% or 75% thresholds).

For the public takeover regulations (particularly those covering mandatory offers), the shareholding of the bidder and its affiliates is aggregated so that this 30% threshold (or 50% or 75%, as applicable) includes the shares owned by the bidder and its affiliates. Conversely, derivatives and other securities (including convertible securities) are not considered when determining the threshold.

Certain companies (primarily public) must disclose information about any of their shareholders acquiring more than 5%, 10%, 15%, 20%, 25%, 30%, 50%, 75%, or 95% of the shares (or increasing their stake to above any of these thresholds). If the acquirer is a Russian company, in some instances, it can also be required to disclose information about the acquisition of a joint-stock company.

Agreements in recommended bids

Formal agreements between the bidder and the target are legal but uncommon because:

Most public takeovers are structured through the direct acquisition of shares from an existing majority shareholder (or several shareholders), with a subsequent squeeze out of minority shareholdings.
The target’s board plays a minor role in public takeovers, generally limited to assessing a public offer and making recommendations to the target’s shareholders. , A majority shareholder usually controls company boards, and the concept of a director’s fiduciary duties is not well developed. Therefore, board members are unlikely to be liable for any failure to consider the bid carefully and make proper recommendations to the shareholders. Nor has the board any obligation to solicit other offers.

Break fees

Is it every day on a recommended bid for the target, or the bidder, to agree to pay a break fee if the bid is unsuccessful?

A break fee is not standard because of the minor role of the target and its board in the public takeover process. There is no regulation of break fees. However, a bidder must reimburse the target company all the costs incurred due to the offer, principally notifying the shareholders about the request received.

Break fee agreements are more common in private acquisitions of shares in a public company. Break fees are not explicitly restricted and are therefore enforceable. There is, however, a risk that a court can reduce a break fee if it finds it unreasonable (Civil Code).

Committed funding

Is committed funding required before announcing an offer?

Committed funding is required for a voluntary or mandatory public offer. The bidder must obtain an irrevocable bank guarantee for the entire amount of the offer purchase price. There are no other legal compulsory requirements for committed funding.

Announcing and making the offer

Making the bid public

How (and when) is a bid made public? Is the timetable altered if there is a competing bid?

The timetable for a voluntary public offer and mandatory public offer for a publicly-listed company is as follows:

Who must file the offer with the Bank of Russia before being sent to the company?
No later than the day after the filing date, the bidder must publish basic information (for example, the name of the target company, type of offer (voluntary or mandatory), and class of shares to be purchased) on the filing on the news wires and, if the bidder is a PJSC obliged to disclose information in the form of quarterly reports, on the website used by the bidder for regulatory disclosures.
Within 15 calendar days of the documents being filed, the Bank of Russia can issue a prescriptive order to amend the offer to comply with legislative requirements.
If the Bank of Russia does not provide instructions within 15 calendar days, the bidder can send the offer to the target company. The law does not give specific timing for sending the request to the target company. The target must distribute the details to its shareholders.
The content of the offer (including the class of shares to be purchased and the offer price) must be published on the website used by the bidder for regulatory disclosures and disclosed on the news wires no later than the day after 15 calendar days from the filing date unless the Bank of Russia gives instructions.
It takes about four to five months to complete the offering process, excluding any merger consent or other necessary regulatory approval.

Competing bid

who can make a competing bid 25 calendar days before the expiry of the most recent request received by the company if there is more than one? The competing bid must be made for at least an equal number of shares, and the price offered for the claims must be no less than that in the initial request.

The voluntary and mandatory bid rules apply to a competing bid.

Offer conditions

What conditions are usually attached to a takeover offer? Can an offer be made subject to the satisfaction of preconditions?

There are strict rules governing mandatory public offers, voluntary public offers, squeeze-out, and buyout procedures. For example, the:

The target company must notify shareholders.
Who must acquire shares at their market price? There are different rules for determining the shares’ market price, depending on whether or not they are listed on the securities market (JSC Law).
An irrevocable bank guarantee must secure the offer price (except in a squeeze-out).

The mandatory offer, squeeze-out, and buyout procedures cannot be subject to the satisfaction of preconditions. The voluntary public offer rules are more flexible, and in theory, the bidder can make its offer subject to the satisfaction of certain preconditions. In practice, the only widely used condition is the minimum number of shares to be purchased for the request to be effective.

Bid documents

What documents do the target’s shareholders receive on a recommended and hostile bid?

The primary documents received by the target company shareholders depend on the type of offer.

Voluntary public offer

A voluntary public offer must include the following:

Public offer document. This is prepared by the bidder and must include, among other things:
- the bidder’s details (for example, name and registration number), including details of its affiliates;
- information on the number of target company shares owned by the bidder and its affiliates;
- information on the target company shares that the offer is for (for example, class of shares and issue registration number), and the offer price; and
- The period during which the offer is valid.
Bank guarantee.

Voluntary public offers can also include any other information that the bidder considers essential for the shareholders, for example, the bidder’s plans for the target company and its employees.

Mandatory public offer

A mandatory public offer (see Question 16) must include:

The public offer document. This is prepared by the bidder and must include, among other things:
- the bidder’s details (for example, name and registration number), including details of its affiliates;
- information on the number of target company shares owned by the bidder and its affiliates;
- information on the target company’s shares that the offer is for (for example, type of shares and issue registration number), including the offer price or how the bidder has assessed the fee; and
- The period during which the offer is valid.
An independent appraisal report on the shares in the target company if the target is not listed or a document issued by a stock exchange confirming the average market price of the shares in the target company if the mark is recorded.
The bank guarantee.

A mandatory public offer can also include the bidder’s plans for the target company and its employees.

Employee consultation

Are there any requirements for a target’s board to inform or consult its employees about the offer?

The target’s board has no obligation to inform or consult its employees about the offer. However, the target should consider any change of control provisions in its key employees’ (for example, the chief executive officer and board members) employment contracts.

Mandatory offers

Is there a requirement to make a mandatory offer?

When a bidder (together with its affiliates) acquires more than 30% (and more than 50% and 75%) of a PJSC’s voting shares, they must make a mandatory public offer to the target company’s shareholders to acquire all other voting shares, and securities convertible into voting shares at their market price.

Who can make a voluntary public offer under the rules applicable to mandatory public offers, including the offer pricing rules and minimum offer price? This enables the bidder to acquire the shares in the target company without making a mandatory public offer.

Consideration

What form of consideration is commonly offered on a public takeover?

Bidders must offer cash for publicly acquired shares. However, the offer can also include an option for each shareholder to exchange their shares for other securities offered by the bidder in addition to the cash consideration.

In a squeeze-out or buyout procedure (see Question 20), who can only purchase shares for cash consideration.

Are there any regulations that provide a minimum level of consideration?

Voluntary public offers are not subject to any minimum consideration restrictions. A minimum purchase price is set for:

Mandatory public offers (see Question 16). The minimum purchase price is either the:
- the weighted average price of the shares as quoted on a stock exchange for the preceding six months;
- price determined by an independent appraiser if the shares are not traded or have been traded for less than six months; or
- Maximum price the acquirer (or any of its affiliates) has paid or agreed to pay for the same shares within the preceding six months.
Squeeze-outs (see Question 20). The minimum purchase price is either the:
- price determined by an independent appraiser;
- the price paid for the shares in a public offer resulting in the acquirer holding 95% of the shares;
- maximum price the acquirer (or any of its affiliates) has paid or agreed to pay for the same shares since the expiry of the public offer; or
- The price paid for the shares in a voluntary offer made by a bidder that was the sole shareholder in a public company and, as a result of the reorganization of that company (through a merger with or accession to another company) has acquired more than 95% of the shares in the reorganized public company.
Buyouts (see Question 20). The minimum purchase price is either the:
- price determined by the rules governing a mandatory public offer;
- the price paid for the shares in a public offer resulting in the acquirer holding 95% of the shares; or
- Maximum price the acquirer (or any of its affiliates) has paid or agreed to pay for the same shares since the expiry of the public offer.

Are there additional restrictions or requirements on considering a foreign bidder can offer to shareholders?

There are no additional restrictions on considering what a foreign bidder can offer to shareholders.

Post-bid

Compulsory purchase of minority shareholdings

Can a bidder compulsorily purchase the shares of remaining minority shareholders?

A bidder can squeeze out minority shareholders in a PJSC company if:

the bidder made a voluntary or mandatory public offer resulting in it owning (cumulatively with its affiliates) more than 95% of the total number of the target company’s voting shares, and who acquired at least 10% of the voting shares owned by the bidder through that mandatory or voluntary public offer; or
The bidder was the sole shareholder in a public company reorganized by a merger or accession to another company. As a result of that reorganization, the bidder acquired more than 95% of the shares in the reorganized public company. The bidder made a voluntary general offer for the remaining shares in the public company within five years of the reorganization. As a result of that voluntary public offer, the bidder acquired at least 50% of the remaining shares in the public company.

The bidder can submit a notice demanding the purchase of the shares owned by the minority shareholders within six months of the period for acceptance of the relevant voluntary or mandatory public offer.

The squeeze-out notice is forwarded to the minority shareholders through the target company after the Bank of Russia clearance.

A minority shareholder that disagrees with the squeeze-out price can claim damages if they believe the squeeze-out cost is not correct.

A majority shareholder’s squeeze-out right correlates with the minority shareholders’ right to demand that the majority shareholder buy out their voting shares and other securities convertible into voting shares (buyout).

Restrictions on new offers

If a bidder fails to obtain control of the target, are there any restrictions on launching a new offer or buying shares in the target?

A bidder can make as much voluntary public offers as it wishes if its previous voluntary offers were unsuccessful.

De-listing

What action is required to de-list a company?

The securities are de-listed by the stock exchange on its initiative or an application by the listed company. De-listing is governed by both the:

Bank of Russia de-listing procedure regulations (including a specific list of actions required for de-listing).
Listing (de-listing) rules of a particular stock exchange. These also contain a list of cases when de-listing is mandatory (for example, for certain breaches of the law).

Target’s response

What actions can a target’s board take to defend a hostile bid (pre-and post-bid)?

23. What actions can a target’s board take to defend a hostile bid (pre-and post-bid)?

Hostile bids are uncommon, and the role of the target’s board is minimal.

An offer (either voluntary or mandatory) must be addressed to the target company’s shareholders but sent through the target. The target company must communicate the offer to its shareholders. The target’s board can express its views on the offer and make recommendations to the shareholders, and these should be communicated to the shareholders together with the offer.

The legislation is bidder friendly. It restricts the management powers of the target’s board during a public takeover. In particular, if the target receives a voluntary or mandatory offer, the following corporate decisions must be referred to a target’s shareholders’ meeting (and cannot be resolved by the board), including:

The issue of additional shares.
The approval of sale or disposal of assets worth 10% or more of the target company’s asset book value.
The support of interested party transactions.
An increase in the target company’s top management’s remuneration.

These restrictions apply for 20 days from either the

Expiry of the term for acceptance of the relevant offer.
Election of a new board at a shareholders’ meeting convened by a bidder that has acquired more than 30% of the shares due to a voluntary or mandatory offer.

Tax

Are any transfer duties payable on the sale of shares in a company incorporated and listed in the jurisdiction? Can payment of transfer duties be avoided?

No transfer duties are payable on the sale of a PJSC’s shares.

Other regulatory restrictions

Are any other regulatory approvals required, such as merger control and banking? If so, what is the effect of obtaining these approvals on the public offer timetable?

The public acquisition is usually subject to merger control. The Federal Antimonopoly Service’s prior consent is required for a person or a group of affiliates’ (direct or indirect) acquisition of more than 25%, 50%, or 75% of the voting shares of a company if either the:

The total asset balance value of the bidder (and its group) and the target (and its group) exceeds RUB7 billion, and the total asset balance value of the target (and its group) exceeds RUB400 million.
Total revenues of the bidder (and its group) and the target (and its group) for the previous calendar year exceed RUB10 billion, and the total asset balance value of the target (and its group) exceeds RUB400 million.

Financial institutions are subject to separate thresholds. The Federal Antimonopoly Service’s prior consent is required for the acquisition of more than 25%, 50%, or 75% of the voting shares in a financial institution if the total balance value of its assets exceeds the following thresholds:

Credit institutions: RUB33 billion.
Microfinance institutions: RUB3 billion.
Non-governmental pension funds: RUB2 billion.
Stock/currency exchanges: RUB1 billion.
Mutual insurance societies and credit consumer co-operatives: RUB500 million.
Insurance companies, insurance brokers, professional participants on the securities market, clearing companies, management companies of investment funds, management companies of mutual funds, management companies of non-governmental pension funds, specialized depositories of investment funds, specialized warehouses of mutual funds, specialized depositories of non-governmental pension funds and pawnshops: RUB200 million.
Medical insurance organizations: RUB100 million.

To obtain prior consent from the Federal Antimonopoly Service, a significant number of documents and commercially sensitive information must be prepared, for example, the bidder’s and target’s market and a list of their key suppliers and customers. Preparation for filing and obtaining prior consent usually takes up to two months.

Completing acquisition without obtaining prior consent can incur administrative liability, and the Federal Antimonopoly Service can challenge the purchase.

There is an additional obligation to notify the Bank of Russia on acquisition or receipt in trust of more than 1% of the shares in a credit institution (Federal Law No. 395-1 on Banks and Banking, 2 December 1990). The Bank of Russia’s prior approval is required (who should issue the decision within 30 days of the filing date) for both the:

Direct acquisition or receipt in trust of more than 10%, 25%, 50%, and 75% of the shares in a credit institution.
Add direct or indirect control over a person holding more than 10% of the shares in a credit institution.

Are there restrictions on the foreign ownership of shares (generally and in specific sectors)? If so, what approvals are required for foreign ownership, and from whom are they obtained?

The Law on Foreign Investments in Strategic Companies regulates foreign investment. It provides special rules for foreign investors intending to invest in companies of strategic significance to ensure their defense and national security. These rules apply to companies operating in 47 areas of the economy.

Since August 2017, the concept of a foreign investor has been expanded. The Law on Foreign Investments in Strategic Companies applies to Russian citizens with dual citizenship and Russian organizations controlled by foreign investors.

Certain types of transactions made about strategic companies require consent from a special government committee (applied for through the Federal Antimonopoly Service), including the following:

Acquisition of the right to dispose of, directly or indirectly, of more than 50% of the votes attached to voting shares in the entity’s charter capital.
Acquisition of the right to appoint a single-member executive body and more than 50% of a collegial administrative body and the right to elect more than 50% of the board of directors.
Acquisition (direct or indirect) of at least 25% of the voting shares in the charter capital of an entity using subsoil areas of national significance.

(Law on Foreign Investments in Strategic Companies.)

A foreign state or an international organization (subject to certain exceptions), or a company controlled by either, is not allowed to obtain control over strategic companies and the acquisition thresholds for these types of investors are lower:

25% in ordinary strategic companies.
5% in companies using subsoil areas of national significance.

Foreign investors that do not disclose their beneficiaries and controlling persons to the competition authorities are subject to the regulation that applies to foreign states and international organizations. In practice, any foreign investor must disclose its beneficiaries and controlling persons to the Federal Antimonopoly Service before making almost any major deal involving strategic entities.

Transactions executed in breach of the Law on Foreign Investments in Strategic Companies are null and void.

In addition, specific restrictions apply to foreign investment in particular industries or activities, for example, the media, communications, and aviation, including:

Insurance organizations must obtain permission from the insurance supervisory authority to increase their charter capital at the expense and favor a foreign investor and its affiliates or alienate its shares or a stake in its charter capital to a foreign investor. Russian shareholders must obtain permission to alienate shares (participation interest in the charter capital) of an insurance organization to foreign investors and their affiliates (Federal Law on Organisation of Insurance Business in the Russian Federation).
Foreign capital participation in an aviation enterprise established on Russian territory must not exceed 49% of the charter capital (Air Code).
Foreign nationals or organizations’ stakes in the sale and purchase of shares held by owners of regional gas supply systems and gas distribution systems, or of other transactions or operations connected with a change in the ownership of these shares, must not exceed 20% of the total number of ordinary shares (Federal Law on Gas Supply in the Russian Federation).
Since 2016, foreign entities or individuals have been prohibited from holding more than 20% in the capital of any media outlet or from establishing/exercising any kind of control over them. Generally, media organizations must report quarterly on any foreign investment.

Are there any restrictions on repatriation of profits or exchange control rules for foreign companies?

There are no legal restrictions on the repatriation of profits to foreign investors. To claim certain tax reliefs (where there is a double tax treaty with a foreign company’s country of incorporation), the foreign company should provide documentary proof of its tax residence in its country of incorporation.

Following the announcement of the offer, are there any restrictions or disclosure requirements imposed on persons (whether or not parties to the bid or their associates) who deal in securities of the parties to the request?

All persons aware of the bid (including the bidder and target company’s directors and officers) are subject to restrictions. They must not use, transfer or recommend the use of insider information to any third party. The unlawful use of insider information (including its transfer to other parties) incurs administrative and criminal liability (Federal Law No. 224-FZ on Combating Unlawful Use of Insider Information and Market Manipulation, and Amendment of Certain Legislative Acts of the Russian Federation).

Reform

Are there any proposals for reforming takeover regulation in your jurisdiction?

No significant reform of takeover regulation is expected this year.

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The country-specific Q&A glances at:

Are there any restrictions on repatriation of profits or exchange control rules for foreign companies?

No significant reform of takeover regulation is expected this year.

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