Agefi Luxembourg - juin 2024

Juin 2024 17 AGEFI Luxembourg Economie / Banques Continuedon left page As such, negotiating overly broad interim covenants thatgivethebuyeradefactocontrolorinfluenceover the target’s strategic decisions or operations could be seen as a preemptive transaction implementation, in breach of the standstill obligation. The gun jumping prohibition has a wide application and does not strictly look at the fact that the transaction is not for- mally completed. Instead, a wide range of fact pat- terns would be assessed by the authorities, starting fromthe actual control over the target. Remedies andways out The outcomes of the regulatory filings should be an- ticipatedintheSPA,byincludingthefollowingmech- anisms: i.A“rendezvous clause”whereby, upon certain trig- geringeventsoccurring,partiesshallmeetanddiscuss in good faithwith a view to agreeingwhether or not the transactions shall be terminated or may be com- pleted, andunderwhich conditions ii.Anagreementontheallocationofcostsandrespon- sibilities, for scenarios where authorities do not au- thorize the transactionor requiremodifications to the investment, or to restore the situation as it was prior to completion iii. Specific performance obligations that activate if a party fails to complywith the cooperation undertak- ings (if a material breach occurs, the non-breaching partymayhave the right toexit thedeal and, in some cases, seekdamages fromthe breachingparty.) iv. A “hell or high water clause” that addresses the risks of regulatory challenges, delays or deadlocks in FDIormergercontrolprocedures(thismightinclude a clause for a lump sum claim for damages payable to the seller, if it is impossible toobtainantitrust clear- ance or the acceptable condition threshold is ex- ceeded.) v.Indemnificationmechanisms,orarighttoterminate thedeal andwalk awayunder carefully specified sit- uations, suchas the launchof anFDI Phase II investi- gation, a clearance being denied or obtained subject tocertainconditions,orredressivemeasuresaffecting the Luxembourg target or the buyer These provisions ensure that both parties have clear expectations andpredefinedresponses toall possible regulatory outcomes. With the Grand Duchy of Luxembourg implement- ing FDI andmerger control procedures, moreM&A transactionswill nowundergoamultifaceted review process that must be evaluated early and managed meticulously throughout. We believe that the early engagement of regulatory counsel, alongside M&A counsel, is highly recom- mendedforconductingapreliminaryriskassessment andenablingacomprehensiveapproachtotheappli- cable procedure. This proactive evaluation will en- hance the parties’ ability to negotiate and to strategi- cally allocate potential risks and remedies in the transactiondocumentation. 1) Regulation (EU) 2019/452 of the European Par- liament and of the Council of 10March 2019 estab- lishing a framework for the screening of foreign direct investments in the Union ( EU FDI Regula- tion ). 2) Another important set of rules relates to foreign subsidies, governed by the Regulation (EU) 2022/2560 of the European Parliament and of the Council of 14 December 2022 on foreign subsidies distorting the internal market. This allows the Eu- ropean Commission to review transactions in whicheitherpartyhasbenefitedfromthird-country financial contributions that may have distortive ef- fectsontheinternalmarket.Theimplicationsonfor- eign subsidies will not be covered in this article. 3)Orwithin15calendardaysifthethresholdof25% of voting rights in the Luxembourg target entity is exceeded due to events that alter the capital distri- bution (as stipulated inArticle 3 of the FDI Law). 4)Assuming the investor’s notification is complete. 5) While the FDI Law only covers investments in existingentities, adraft newregulationof theEuro- pean Parliament and of the Council, repealing the EU FDI Regulation and currently being discussed at EU level, proposes towiden the scope to under- takings not yet existing but that would be estab- lished as a result of the investment. 6) The full list is inArticle 2 (2) of the FDI Law. 7) The draft bill of law no. 8296 was submitted to the Luxembourg Parliament on 23August 2023. 8) EU Regulation No. 139/2004 on the control of concentrationsbetweenundertakings.Themerging partieswhose turnover thresholds have an“EUdi- mension” are under the exclusive competence of the EC.All other transactionsmay be subject to na- tional antitrust authorities provided they meet the relevant criteria. 9) Exemptions from this rule can be granted in jus- tified cases upon the parties’ request. 10) Suchas start-ups or recent entrantswithsignifi- cant competitive potential (even though it has not yet generated revenues), important innovators or providers of products or services that are key in- puts/components for other industries, etc. L a compagnie d’assurance vie luxembourgeoise WEALINS S.A., reconnue pour son expertise dans l’élabo- ration de solutions innovantes d’assurance vie et de capitalisa- tion transfrontalières, annonce au 31 décembre 2023, avoir 15,83 milliards d’euros d’actifs sous administration et un encaisse- ment de 1,5 milliard d’euros (en légère hausse par rapport à l’an- née précédente). La compagnie, qui a poursuivi en 2023 son développement commercial sur les 10 marchés européens dans lesquels elle est active, a su faire la différence en misant sur la satisfac- tion et la confiance de ses partenaires et leurs clients. Avec plus de 30 ans d’existence, la compagnie est devenue au fil des années un acteur de premier rang et incontournable dans le secteur de l’as- surance vie opérant en Libre Prestation de Services depuis le Luxembourg. Centrée sur une approche «Human-to-Human» et engagée à construire une relation de confiance sur le long-terme, WEA- LINS obtient la reconnaissance de ses partenaires. Preuve en est, une enquête NPS («Net Promoter Score») menée récemment auprès des partenaires de la compa- gnie d’assurance a mis en lumière la satisfaction de ces derniers envers WEALINS avec un score relativement élevé de 47,9. La compagnie s’est également vue décernée plusieurs récompenses (parmi lesquelles les awards suivants remis par l’organisme luxembour- geois HubFinance : «Back-Office Excellence – Insurance» et «Best Investor Experience – Insurance»), reflet de sa volonté d’apporter du pro- fessionnalisme, de la réactivité et une expérience-client unique à sa clientèle. «Dans un monde en pleine mutation, avec de nombreuses opportunités mais aussi des défis, chez WEALINS, nous mettons tout en oeuvre afin d’accompagner nos partenaires et leurs clients au rythme de leurs pro- jets et ambitions patrimoniales d’au- jourd’hui et de demain. Je tiens d’ail- leurs à remercier les équipes pour leur implication au quotidien», pré- cise Luc Rasschaert (photo), CEO de WEALINS S.A. WEALINS s’est donc construit ces der- nières années une place de choix auprès de ses partenaires et de leurs clients. Pour atteindre ses objectifs et ambitions, la compagnie peut compter sur le soutien de son actionnaire, le Groupe Foyer. Acteur majeur du paysage écono- mique et financier luxembourgeois, sa solidité structurelle et financière a été réaffirmée suite à la publication du rapport sur la solvabilité et la situation financière («SFCR») (cf. ratio de solva- bilité II du Groupe > à 300%). L’Humain au centre de la réussite pourWEALINS By Prof. Dr. Bruno COLMANT, CFA, Member of the Royal Academy of Belgium A fewmonths ago, on January 1, 2024, we celebrated the quar- ter-century anniversary of the introductionof the euro, while the European elections in June 2024 signal the emergence of a newcontinental po- litical order. But 2024 is also the anniver- sary of theGermanhyperinflation. The European Union was created from the ashes of two wars, with the awareness of a choice for peace and cooperation. This led to a terri- torial expansion of the European Union, facilitated by the collapse of the IronCurtain. Inthemonetarydomain,asinglecurrency was a distant project. However, twenty years ago, on January 1, 2002, the euro appeared physi- cally.Fromimmaterialanddematerialized,itbecame symbolic. The coins juxtaposed national effigies and emblems, while the banknotes featuredmonuments depicting various architectural motifs, themselves representing diverse artistic and philosophical cur- rents. No structural construction is accurate to avoid singling out the potential dominance of anymember state, value, or personality. Theeurowasandremainsapoliticalprojectofunpre- cedented ambition. Think about it: after centuries of strife, European countries, nownumberingnineteen, decided to overcome their economic differences through a common monetary standard. The intro- ductionoftheeuroneverthelesssparkedadversereac- tions inGermany.However, once this country joined theeurozone,excludingtheSouthernEuropeancoun- trieswhoseweak currencies competedwith the agri- cultural policy, the nature of European trade was unthinkable. WithoutGermanreunification,thereprobablywould neverhavebeenasinglecurrency.Withoutcynicism, one could suppose that the euro was the last price GermanyhadtopayforNazism,whoseera- dication led to the partition of the country. Germany had to relinquish its monetary dominance, the supreme regalian symbol of the Hegelian tradition, to regain their territorial sovereignty with the political support of other member states. Upon its integration, some even spoke of the reuni- fication of Germans, not of Germany, recal- lingthespecterofpan-Germanism.Germany had to confirm the respect of the Oder- Neisse border with Poland, which was decided at the Potsdam Conference in 1945. This debate evoked the history of a German nation and now a new cur- rency, which never alignedwithitspopula- tion. The ghost ofMunich and the Nazi-Soviet Pact of 1939 will always haunt Europe. Thus, the eurowas born partly froma historical inci- dent accompaniedbypolitical opportunism. Inpropergeopoliticalcoherence,oneofthearguments used to explain the foundation of the eurowas that a singlecurrencywouldsealpeaceinEurope.Theeuro would forge harmony among nations once enemies through a standard unit of account, itself the culmi- nation of the post-war political project.And then, we know the maxim of Gianni Agnelli (1921-2003), the legendary head of Fiat, who liked to say that "where trucks pass, armies no longer pass." But, retrospectively, was this narrative valid? Wasn't it ambiguous and truncated? Europewas at peace at the time of the euro's formation. Germany had been demilitarized andoccupied. Several European coun- tries possessed (or were custodians of) nuclear wea- pons,making any conflict unimaginable. Moreover,iftherewasanyperceivedthreatofaggres- sion, it was instead on the USSR's side, outside the eurozone. We remember the deployment of SS-20 missiles in the eighties and François Mitterrand's solemndeclaration in January1983 to theBundestag: "The missiles are in the East, the pacifists are in the West." Indeed, the disintegrationof theUSSR, conco- mitantwithGermanreunification,couldhaveignited military conflict in some regions.However, fromany angle, it is hard to see how a single currency, imple- mented after the disintegration of the USSR and German reunification, could have mitigated such hypothetical conflicts. Furthermore, Europe's popu- lation is declining. There is a proven correlation bet- ween the risk of mass armed conflict and the relative proportion of young people within a population. Europeancountriesareagingandwillnolongerwage war in themediumterm. In truth, the euro has supported a population of ren- tiersratherthanfosteringpeace.UntiltheCovidcrisis, the euro was a genetically disinflationary and reces- sionary currency, a unit of account that maintained its purchasing power. Here, too, we recognize Germany's trauma fromthehyperinflationof 1924 in theWeimarRepublic(whichsawthreecurrenciescol- lide in two years: the Papiermark, the Rentenmark, and theReichsmark) and the civil unrest it caused. The response to the sovereign crisis of 2009-2011was also revealing: the European Commission imposed strict austerity programs on struggling economies, plunging the population into unemployment. Contractionary fiscal policy has never been seen to transforminto economic expansion. What aparadox tohave createda strongcurrency for peace, which was nevertheless ensured by an aging population, to the detriment of youth too sparse to oppose it! Suppose the euro was indeed meant to ensure peace. In that case, it should not have high- lighted the monetary Europe of the North from that of the South and imposed economic contraction on Southerncountriesforwhichtheeurowastoostrong. Worse,theweaknessoftheseSoutherncountriespre- vented the euro from being appreciated too much, which was of essential benefit to Germany and the Netherlands. During theGreek crisis,AngelaMerkelwas caricatu- red as Adolf Hitler. Greece feared the Troika's demands would revive totalitarian tendencies remi- niscent of the 1967 colonels' coup. The wounds of a century are never fully healed, andwar damages are always insufficient. But that is another story. It is ano- therstorybecauseourgenerationwillrememberthat the euro has become the tutelary symbol, sealing the freemovementofpeople,goods,services,andcapital (the principle of the single market) in a geographical areaofover340millioninhabitants.Theprojectembo- dies the convictions of its founders: the expansion of trade flows, European credibility on a global scale, and especially the emergence of a European identity through the ultimate symbol of sovereign represen- tation, namely the currency. However, this project mayhave also createdpolitical extremes. Indeed, theoriginof theeuroalsosignifies thedomi- nanceof themarket economy,whichpostulates that the market, in its omniscience, integrates all para- meters to lead, through the intersections of supply and demand, to the fair price of everything, inclu- ding labor (which resembles the Large Language Models of artificial intelligence). This has led to dis- qualifying political power and, evenmore, its credi- bility because of its impotence in the face of market rules and its questioned legitimacy. Democracy has thus transformed into an auction room, homo poli- ticusintohomoeconomicus,andelectioncampaigns into boy bandposterswithout anymore thoughtful societal project. This societal trajectory has been accompanied by the creation of European super- structures (the European Union, the ECB, etc.) that no citizen incorporates into their realities. Theeurohasthusdisqualifiedthesovereignparame- ters that ensured the patriotism of political action. When currency, public debt, and societal rules are dilutedinavastaggregate,theeffectivenessofpolitical powerisnolongermeasuredbythemarket'sreaction topolitical decisions since thesedecisions are integra- ted into themarket. Thus, exchange rates and public debt have become virtuality. Consequently, political power has lost its decisive power by blending into a dominant market order. Therefore, the political reaction comes from parties that reject European treaties and demand a soverei- gntist, even a salvific nationalist stance. We remember Marine Le Pen's statements about taking France out of the euro in 2017 before realizing that the eurowas her best ally. 1924-2024: the euro on the ashes of a century