International Comparative Legal Guide To: Mergers & Acquisitions 2016

1 RELEVANT AUTHORITIES AND LEGISLATION

1.1 What regulates M&A?

Joint-stock companies, limited and additional liability companies, general and limited partnerships are covered by M&A legislation. M&A transactions are regulated by the following laws and legislative acts:

Civil Code of the Republic of Uzbekistan dated 27 December 1994 and 01 July 1999 respectively (as amended). Law No.223-I On Joint-Stock Companies and Protection of Shareholders' Rights dated 26 April 1996 (in the new edition as amended). Law No.308-II On Commercial Partnerships dated 6 December 2001. Law No.310-II On Companies with Limited and Additional Liability dated 6 December 2001 (as amended). Law No.163 On the Securities Market dated 22 July 2008 (in the new edition as amended). Law No. ZRU-319 On Competition dated 6 January 2012 (as amended). Regulation on the procedure for issuance of the preliminary approval for establishment of associations of legal entities, consolidation and merger of legal entities (approved by the Resolution of the Cabinet of Ministers of Uzbekistan No. 344 dated 27.12.2013). Regulation on the procedure for issuance of the preliminary approval for acquisition of shares of legal entities (approved by the Resolution of the Cabinet of Ministers of Uzbekistan No. 230 dated 20.08.2013). other by-laws, including sector-specific rules. 1.2 Are there different rules for different types of company?

M&A legislation applies to companies that are incorporated and traded in Uzbekistan, whether these companies act as purchasers or targets in a transaction. If a foreign company wishes to purchase an Uzbek joint-stock company (JSC) such transaction will also be regulated by Uzbek M&A laws. M&A rules are generally the same for JSC and private companies, though some procedural differences in executing transactions take place. Foreign target companies are not affected by the M&A legislation.

It should be noted that Uzbek JSC may not trade over 25% of their shares in foreign jurisdiction. Moreover, where a company having state share is considered to have strategic interest for the economy of Uzbekistan, placing of its shares is subject to preliminary review by the Commission on Monitoring over Effective Use of State Shares in Publically Listed Companies.

1.3 Are there special rules for foreign buyers?

It is generally determined by the relevant laws that there is no special regime for foreign buyers. With that, however, some sector-specific rules as, for instance, those regulating mass media limit participation of foreign companies.

1.4 Are there any special sector-related rules?

There are some specific rules that apply to particular industries, including banking, insurance, mass media, natural monopolies, non-banking credit organisations and professional participants of securities market.

1.5 What are the principal sources of liability?

Besides contractual liability, there are procedural requirements set by company, competition and security market laws (administrative liability). It should particularly be noted that in accordance with security market laws, participants of the securities market might be found liable for market manipulation, deliberate dissemination of false information, insider dealing, or any efforts resulting in misleading on the price of securities. Liability of the persons involved in these illegal actions is determined by the court.

2 MECHANICS OF ACQUISITION

2.1 What alternative means of acquisition are there?

There are several ways on how acquisition of shares in of JSCs may be done. The main and the most straight-forward way is the purchase of a newly-issued stock that can be done by conclusion of an agreement between the target and the bidder. In such case, the issue prospectus defines potential buyers in advance (the so-called 'private subscription').

The purchase of shares from the existing shareholders is done through the Republican stock exchange if the relevant company is listed there or through an independent organiser of trades. Formally, this process is done through public trades, where any party may participate in the bids. In practice, however, placement of shares in public trades is preceded by direct negotiations between the parties. Once the parties reach an agreement, the target company places its shares in the stock exchange or organized public trades by making a public offer to sell the shares, while the potential bidder makes an offer to acquire the shares. The transaction is closed and registered by the stock exchange or the independent organiser of trades without the direct participation of the parties. The parties shall pay the service fees of the stock broker or the independent organiser of trades.

The third option is acquisition through either merger or consolidation. The merger entails creation of a new company having rights and obligations of the companies that are liquidated as a result of...