Corporate Restructuring Transaction

“Corporate Restructuring Transaction” means and refers to a variety of corporate transactions within the meanings given in articles 227, 252, 228 and paragraph 3 of article 229, of Brazilian Corporate Law (Law 6,404 dated December 15, 1976, as amended). The Panel Code regulates corporate restructuring transactions, especially from the article 72.

MERGER

According to article 227 of Brazilian Corporate Law, merger is an operation whereby one or more corporations are absorbed by another, which succeeds to all their rights and obligations. Merger is one of the corporate transactions that can be under the authority of the Panel.

The Panel takes the view that a merger of a wholly-owned subsidiary is not contemplated by the Code. This view is expressed on Guidance Note 002.

SHARE-FOR-SHARE MERGER

In accordance with article 252 of Brazilian Corporate Law share for share merger is “the merger of all the shares of a corporation into the assets and liabilities of another Brazilian corporation to convert the former into a wholly-owned subsidiary”. Share for share merger is one of the corporate transactions that can be under the authority of the Panel.

CONSOLIDATION

Consolidation is an operation whereby two or more corporations unite to form a new corporation, which shall succeed them in all their rights and obligations, in accordance with article 228 of Brazilian Corporate Law. Consolidation is one of the corporate transactions that can be under the authority of the Panel.

SPIN-OFF FOLLOWED BY A MERGER

Spin-off followed by a merger is regulated by paragraph 3 of article 229 of Brazilian Corporate Law. Spin-off followed by a merger transaction must follow the governmental rules for merger.
Spin-off followed by a merger is a transfer of part of the assets and liabilities to an already existing corporation, the divided company being extinguished, if there is transfer of all its assets or dividing its capital, in case of partial transfer.

WITH RELATED PARTIES

The Panel takes the view that corporate restructuring transaction with related parties is any merger, share for share merger, consolidation or spin off followed by merger involving any two or more of a parent company, its subsidiaries and companies under common control.

The Panel Code regulates corporate restructuring transaction with related parties, especially from article 81.

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