Post-crisis Russian M&A has been driven by
domestic small to mid-cap deals, and private equity is picking
up through minority investments.
Inbound investments are still governed by English
law and structured through an offshore holding company,
typically Cyprus and sometimes with a BVI holdco for added
flexibility. The task for lawyers with this model is to amend
the underlying companies’ articles to conform to
the holdco’s shareholder agreement – to
ensure the governance agreed at the top level filters through
to its ultimate operations.
Russian law’s 2008 recognition of
shareholders agreements has gained little traction. The
questionable enforceability of tag and drag rights and rights
of first offer in particular makes their status too uncertain
for most buyers.
Sellers on the other hand often push for a Russian governed
transaction. Under local law warranties are generally
unenforceable to the extent they don’t relate to
the subject matter, says...