Recent developments

On 23 March 2017, Verkhovna Rada of Ukraine approved a reform of the corporate legislation. Law of Ukraine No. 1983-III On Amendments to Certain Legislation of Ukraine Regarding Improvement of Corporate Governance of Joint Stock Companies (the Corporate Governance Law) became effective on 4 June 2017. Draft Law No. 4470 On Amendments to Certain Legislation of Ukraine Regarding Corporate Agreements dated 19 April 2016 (the Corporate Agreements Law), which was also adopted by Verkhovna Rada of Ukraine on 23 March 2017, has been submitted to the President of Ukraine for signing, which we expect to occur soon. The Corporate Agreements Law will become effective on the day following the day of its publication.

The Corporate Governance Law and the Corporate Agreements Law (together referred to as the Amendments) will significantly affect M&A transactions in the Ukrainian market. The new rules for acquiring shares will also affect transactions outside of Ukraine involving Ukrainian joint stock companies (JSCs) (even if such JSCs are not the direct acquisition targets).

The Amendments introduced the long-awaited concepts of "squeeze-out" and "sell-out" into Ukrainian corporate law. Moreover, from now on, participants of limited liability companies and shareholders of JSCs are able to enter into corporate agreements among themselves governed by Ukrainian law.

Set forth below is a summary of the most significant amendments and our analysis of their implications on M&A transactions.

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