Welcome to CapLaw

CapLaw is the first electronic newsletter providing up-to-date information on legal and regulatory developments, concise articles and reports on deals and events with particular focus on Swiss capital markets. CapLaw is addressed to all Swiss and international lawyers, in-house counsels financial institutions and corporates as well as those who are interested in the Swiss capital markets.

The Editors
René Bösch, Homburger AG
Thomas Reutter, Bär & Karrer AG
Patrick Schleiffer, Lenz & Staehelin
Peter Sester, University of St. Gallen
Philippe A. Weber, Niederer Kraft & Frey AG
Thomas Werlen, Quinn Emanuel Urquhart & Sullivan, LLP

Spin-off of Alcon

Today, Novartis AG completed the spin-off of the Alcon eye care devices business, and Alcon Inc. debuted as independent publicly traded company. The Alcon shares were successfully listed on the SIX Swiss Exchange Ltd. and the New York Stock Exchange. They are also included in the Swiss Market Index (SMI), which comprises the 20 largest Swiss listed stocks.

Asset Backed Securities Under the Financial Services Act

The Financial Services Act of 15 June 2018 (FinSA) and the consultation draft Financial Services Ordinance (draft FinSO) dated 24 October 2018 include significant new rules for the distribution of financial instruments and the regulation of financial services in Switzerland. This article discusses the potential impact of the new rules on Asset-Backed Securities (ABS) in relation to the timing of prospectus review and approval, the obligation to prepare a Key Investor Document (KID) and the regulation of services typically provided by investment banks in connection with ABS transactions. The article is based on the version of draft FinSO published for public consultation.

By Daniel Adler / Daniel Bono (Reference: CapLaw-2019-01)

The Rise of Green, Social and Sustainability Bonds – The Swiss Perspective

The global market for green, social and sustainable investment is growing at an increasing rate. This is the result of considerable growth of both the demand for, and the supply of, capital for green, social and sustainable projects. Despite Switzerland having a highly developed and efficient capital market and being one of the world’s largest cross-border wealth management centres, the Swiss market for green, social and sustainability bonds is only just beginning to gain momentum. In view of this, the author expects this sector to significantly grow in the coming years.

By Andreas Josuran (Reference: CapLaw-2019-02)

Corporate Tax Reform – Capital Contribution Principle for Swiss-listed Companies

On 28 September 2018 the Swiss Parliament approved the final draft bill regarding the corporate tax reform which includes major changes for Swiss-listed companies in relation to the distribution of dividends paid by repayment of capital contribution reserves. It is proposed that Swiss-listed companies may only pay withholding tax-free capital contribution reserves if in the same amount a dividend will be paid from taxable distributable reserves (so-called 50/50 rule).

By Elga Reana Tozzi (Reference: CapLaw-2019-03)

Replacement of LIBOR – An Approach for the Swiss retail lending market

The discontinuation of LIBOR, announced for the end of 2021, is foreseeable. At the same time, for lack of suitable alternatives, LIBOR is still the dominant reference rate in the Swiss retail lending market for floating rate borrowings. As a result, Swiss banks active in the mortgage lending market already now face the challenge to provide for a transition to a successor rate when entering into new contracts. And the same challenge exists generally, both in the retail and the institutional market.

By René Bösch / Benedikt Maurenbrecher (Reference: CapLaw-2019-04)

Liberty Global to sell its Swiss operation, UPC Switzerland, to Sunrise

On 27 February 2019, Liberty Global plc (Liberty Global) (NASDAQ: LBTYA, LBTYB AND LBTYK) announced that it has reached a binding agreement to sell its Swiss operation, UPC Switzerland, to Sunrise Communications Group AG (Sunrise) (SIX: SRCG). At 31 December 2018, UPC Switzerland’s network passed 2.3 m homes and served 1.1 m customers. Liberty Global will sell UPC Switzerland for a total enterprise value of CHF 6.3 bn. Sunrise will acquire the business inclusive of indebtedness and other debt items with an aggregate value of approximately CHF 3.7 bn at 31 December 2018. Closing of the transaction is subject to regulatory approval and approval by Sunrise’s shareholders with respect to an associated capital increase.

Oerlikon completes the divestment of its Drive Systems Segment to Dana

On 28 February 2019, Oerlikon (SIX: OERL), a leading technology and engineering group, completed the divestment of its Drive Systems Segment to Dana Incorporated (NYSE: DAN) for an enterprise value of CHF 600 m, which is approximately the same amount of cash proceeds expected from the sale. Based on nearly 100 years of experience, Oerlikon Drive Systems is a global leader in providing high-performance gears, market-leading shifting solutions, power transfer units (PTUs), differentials and planetary drives, as well as innovative solutions for hybrids and e-drives.

ASSA ABLOY acquires controlling stake in agta record

ASSA ABLOY AB (publ), the largest global supplier of intelligent door opening solutions listed on Stockholm Stock Exchange, indirectly acquired a 54% controlling interest in agta record ag. The share price per agta record share is EUR 70. The transaction value amounts to approx. EUR 933m. Agta record group is one of the top players in the global market for automatic pedestrian doors headquartered in Switzerland and listed on Euronext in Paris. The completion of the acquisition is subject to approval of the competition authorities. If the acquisition of the controlling interest is successful ASSA ABLOY intends to launch a public tender offer to buy out remaining shareholders.

Gyrus to acquire DuPont Sustainable Solutions (DSS)

On 25 February 2019, Gyrus 1 LP, a Guernsey limited partnership acting through its general partner, Gyrus GP Guernsey Limited (Gyrus), announced that it has signed an agreement with E. I. du Pont de Nemours and Company and other selling subsidiaries of the group (DuPont) to acquire the DuPont Sustainable Solutions (DSS) business, which will be divested from DuPont to create a new, independent global operations management consulting firm. The new firm will be led and operated by the existing DSS management and supported by Gyrus Capital, an investment firm based in Geneva, Switzerland. DSS is a leading provider of world-class operations management consulting services to help organizations transform and optimize their processes, technologies and capabilities. It has more than 600 consultants and subject matter experts worldwide, serving clients in over 60 countries. Its clients come from industries such as oil and gas, chemicals/petrochemicals, mining and metals, and manufacturing. The transaction is expected to close in July 2019 pending the completion of all closing conditions.

CMA CGM declares public tender offer for CEVA Logistics successful

On 28 January 2019, CMA CGM, the French shipping group, published a public tender offer for all publicly held registered shares of CEVA Logistics at an offer price of CHF 30 per share. On 19 March 2019, after the end of the acceptance period, CMA CGM announced the interim result of the public tender offer pursuant to which it held 89.47% of the share capital of CEVA Logistics. Accordingly, the offer was declared successful. The additional acceptance will run until 2 April 2019 and settlement is expected to occur on 16 April 2019.