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.
[...] The main issue of the case is to analyze how national legal restrictions can frame transactions involving international companies; once entered into a legal process, it seems hard to overcome those restrictions, even if the economic will of the two companies is to find an amicable agreement according to a more liberal conception of mergers and acquisitions. The Beginning of the Sacyr/Eiffage case In the beginning of 2006, Sacyr was still a minor shareholder of the Eiffage holding. April 5th 2006 Sacyr declared, in a binding intention letter, that it would not takeover Eiffage and that it would not launch a public offer. [...]
[...] Most of them were small companies focused on Spain and which do have enough financial surface to do such an investment. The fact that their investment in Eiffage does not seem financially but also strategically coherent was taken in account by the stock-market authorities but the major point is that their investment was concomitant. The aim of this action was to have a common policy in order to help Sacyr to change the composition of the board of directors and then to benefit of the industrial cooperation of the companies. [...]
[...] The action of France's stock-market authority and the judicial issues We will first study the major legal issues of the AMF decision. What is first interesting is that the authority estimates that it has competence even if there are still judicial proceedings. In fact the judicial investigation of the Nanterre Commerce tribunal does not concern the same point and that is why it does not cross the non bis in idem principle. The AMF goal is not to hamper acquisition from foreign investor but to organize takeover of companies and to assure the respect of minority shareholders' interest. [...]
[...] The end of the conflict The issue of the conflict is not solved yet, but what was most important in this case is the legal subordination of the two companies to French authorities, especially the AMF and the judicial tribunals, and the impact of the imbricate legal procedures engaged on economic will. The Spanish Sacyr tried to take control on the French Eiffage without announcing the deal on the market. It used other Spanish investors to lead a concerted and common behavior to avoid declaring the threshold crossing and thus to avoid launching a full takeover bid in cash. [...]
[...] However it was the first clash between Sacyr and the direction of Eiffage and it probably determined Sacyr's position in this conflict. It also shows how hostile was the context of the whole case. Indeed after the failure of this policy Sacyr began slowly to buy more Eiffage actions but took care to stay under the threshold of a third of the total of shares. If Sacyr would have more than a third of Eiffage shares it would have to launch a takeover bid in order to respect the French law. [...]
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