Corporate Restructuring Services in Spain

Understanding spin-offs, mergers and corporate segregations in Spain

How can a lawyer help me?

Robust legal advice is critical when embarking on any Corporate Restructuring operation. The first port of call should be an exhaustive Due Diligence process led by a legal expert.

 

At Lexidy LegalTech Boutique we will ensure the following: 

 

  1. Ensure that the shareholder has the appropriate information to cast its vote on a transaction of great legal and economic relevance.

 

  1. Ensure that the merger is duly justified and is consistent with the corporate interest.

¨We will be with you each step of the journey.¨

 

What is corporate restructuring?

As a company grows and evolves, it may need to alter the way is structured and set up to do business. This is becoming increasingly common as businesses have easier access to a global customer base and lower barriers to entry or their products and services. However, the benefits of globalization often require a company to adapt to new situations.

 

Structural modifications or corporate restructuring operations often refer to matters that affect how the company’s assets or personnel are organized. The most important are actions that transform a business, such as mergers and company spin-offs. 

 

Mergers and spin-offs are common for companies that are buying or transferring businesses and these are common forms of corporate restructuring when a company is the subject of a takeover.

 

 

 

The following table defines and explains the various types of corporate restructuring in Spain

 

 

CONCEPT

EFFECTS

MERGER

A legal transaction that occurs when two or more companies combine their shareholders and assets into a single company. This may be a new or a surviving company.

A merger transfers the assets and liabilities of one or more companies to the receiving company. This may be the acquiring company or a new one may be formed for this specific purpose. This is called a  “newco”.

This involves the delivery of shares and sometimes a fee to the shareholders of the companies that transferred their assets.

The company that transferred its assets is dissolved.

SPIN-OFF

A Spin-off is the division of a company into two or more new or pre-existing companies. The shares are distributed among the shareholders of the initial company.

There is a precise distribution of the assets and liabilities.

 

The company shareholders will receive the shares in the spin-off company.

SEGREGATION

A segregation involves transferring one or more parts of the assets of a business to one or more companies. 

The segregated company receives shares in the company benefiting from the transaction.

What are the requirements?

The transfer and/or acquisition of companies through a Corporate Restructuring process requires a more robust approach than a transaction via sales and purchase agreement. The process is as follows:

1. The target company’s assets and liabilities are transferred to the acquiring company by means of “universal succession”. In other words, the assets are transferred in a single event rather than a host of separate, individual transactions for each right and liability. Universal succession gives the third party legal certainty.

2. In acquisitions through a Corporate Restructuring, the standard practice is to offer the shareholders of the target company the possibility of joining the acquiring company. Here, the shares of the acquiring company are allocated to the target company’s shareholders as consideration. This integration of shareholders from the acquired company into the acquiring company is based on the principle of continuity of shareholding.

3. In a corporate restructuring, the transaction must be registered with the Commercial Register for the assets, liabilities, business rights and obligations to be transferred. This is unlike contractual acquisitions where the delivery occurs when the deed of sale is executed.

Our Story

We are a department formed by qualified legal experts who have been trained in the field of corporate law. We work on these requests every day and it’s our passion. For us, Lexidy is a way of life and what excites us the most is to be able to deliver the happiness and satisfaction of a successful process. We want to help you achieve your goals and dreams.

Héctor Lopez Vazquez

Head of Corporate Department

Madeleine Cadwell

Paralegal

Marta Ametller

Paralegal

Samuel Ortega Vega

Lawyer

Client’s stories

How Can We help you?

Subscribe to our newsletter

Stay ahead of the changes that matter to you

Looking for more?

Our Smart Search help to focus on important!