Mergers and Acquisitions in Montenegro

Mergers and acquisitions are business transactions in which the ownership of a company or its operating units are combined or transformed. The procedure applicable to mergers and acquisitions in Montenegro is regulated by the Companies Act. Depending on the type of company, additional rules for mergers and acquisitions are stipulated by the legal framework. Mergers and acquisitions rules can be divided into general rules (applicable to any type of merger and acquisition transaction) and rules applicable to a specific type of company.

Our law firm in Montenegro can give you a detailed presentation of the legal provisions of mergers and acquisitions.

Means of concluding mergers and acquisitions in Montenegro

Generally speaking, mergers and acquisitions transactions in Montenegro are done through an asset and a share deal. Cash compensation is the method of executing a merger and acquisition, but other types of compensations (share-to-share) are possible. The most common ways of concluding a merger or an acquisition in Montenegro are the following:

•   Spin-offs (odvajnaje) and demergers (podela) – these are followed by a share deal and are used when the acquirer is interested in buying only a part of the asset;
•   Mergers (spajanje) – this type usually implies two or more Montenegrin companies.

As a general rule, it is advisable that investors hire a legal advisor and a tax and investment advisor when engaging in a merger or an acquisition in Montenegro. This type of transactions usually take several months to complete and depend on various factors: the legal form of the target (LLC or JS), the structure of the transaction (asset, share deal or combined), competition filings (if a merger clearance cause is applicable) and the takeover bid (if the transaction is subject to a mandatory bid).

Our lawyers in Montenegro can legally assist you in the process of concluding a merger or an acquisition transaction.

Documentation needed for mergers and acquisitions in Montenegro

Depending on the type of the transaction, specific documentation has to be prepared for concluding a merger or an acquisition in Montenegro. These documents are required in case of a merger:

• - the decisions of the board of directors and shareholders` meetings;
• - the merger agreement;
• - de-merger or spin-off plan (if applicable);
• - corporate documents (articles of association, memorandum of association and financial statements).

A share transfer/purchase (signed and notarized), waiver of pre-emption rights and a new statute and articles of association are the documents needed for the merger and acquisition of a limited liability company.

Feel free to contact our attorneys in Montenegro for more information regarding the documentation necessary for a merger or an acquisition in this country.