Legal aspects of international mergers and acquisitions: Sacyr/Eiffage

Résumé du document

The Sacyr/Eiffage case involves two public construction companies, the Spanish Sacyr Villehermoso and the French Eiffage. First, let's introduce those two companies. Sacyr is a leading Spanish construction company based and listed in Madrid. It is publicly traded and part of the IBEX 35, the benchmark stock market index of the Bolsa de Madrid, Spain's main stock exchange. Its shares are currently traded in the Madrid, Barcelona, Bilbao and Valencia Stock Exchanges and in Portugal too. The company was founded in 1986 and named Sacyr in 1991. It acquired 24.5% of Vallehermoso in 2002, a leading housing business in Spain that was founded in 1921. The merger occurred in 2003 to create Sacyr Vallehermoso. Its structure is now composed of several business areas in several divisions: construction with Sacyr, housing with Vallehermoso, concessions with Itinere, property rental with Testa and finally services with Valoriza. Luis del Rivero is the Chairman of the company.

Extraits

[...] It was formed in 1992, after several mergers of different companies such as Fougerolle, founded in 1844, Quillery, founded in 1863, Beugnet, founded in 1871 and La Societe Auxiliaire Enterprises Electriques et de Travaux Public, better known as SAE, founded in 1924. It exercises five core activities, construction with Eiffage Construction, concessions with Eiffage Concessions, road construction and civil engineering with Eiffage Travaux Publics, electrical contracting with Forclum and metallic construction with Eiffel. Jean-François Roverato is its chairman and managing director. [...]

[...] In the competence is determined by the fact that Sacyr then launched a public offer of exchange. We have there to remind that at least in theory the AMF control on an offer is nowadays no more a control of admissibility but of compliance with the rules. The AMF noticed in its decision of June 26th 2007 that there is body of evidence that shows that Sacyr and at least six other Spanish companies acted in concert. AMF defines it as an “organized and convergent approach” even if there is no evidence of a formal agreement. [...]

[...] The decision of the AMF would be an injunction and however did not respect the principle of contradictory procedure. The other judicial procedure was about the legality of the 19th April 2007 shareholders meeting's decision to block the voting rights of 89 Spanish and Portuguese. It does not directly deal with the question itself of the existence of a concert. The consolidation phase After the start of legal proceedings which was a very contentious time both sides tried to build up again forces and to imagine end of crises scenarios. [...]

[...] As a conclusion the specific issues that apply to public transaction according to national law prevented this public deal to happen. By non respecting French law in its try to take control of a French company, Sacyr exposed itself and the Spanish entities with whom it acted in concert to legal sanction by the AMF. But after Sacyr's appeal it seems that even if national law frames public transaction, it is not likely to force a deal: the economic goal disappeared and all but the minor investors wanted to deal to be made. [...]

[...] On the first hand it hurts the principles of transparency, integrity of the market and loyalty in transactions and competition. On the second hand the public offer of exchange of Sacyr in non-conform because the concert would be considered as a unique entity concerning the stock-market rules. Indeed the threshold of a third of shares would be still reached by the concert and it would have bought more than five percent of the shares during the previous year which is also forbidden. [...]