{"id":136016,"date":"2026-04-08T11:29:14","date_gmt":"2026-04-08T11:29:14","guid":{"rendered":"https:\/\/my.legal500.com\/guides\/?post_type=comparative_guide&#038;p=136016"},"modified":"2026-04-08T11:29:14","modified_gmt":"2026-04-08T11:29:14","slug":"ethiopia-mergers-acquisitions","status":"publish","type":"comparative_guide","link":"https:\/\/my.legal500.com\/guides\/chapter\/ethiopia-mergers-acquisitions\/","title":{"rendered":"Ethiopia: Mergers &amp; Acquisitions"},"content":{"rendered":"","protected":false},"template":"","class_list":["post-136016","comparative_guide","type-comparative_guide","status-publish","hentry","guides-mergers-acquisitions","jurisdictions-ethiopia"],"acf":[],"appp":{"post_list":{"below_title":"<div class=\"guide-author-details\"><span class=\"guide-author\">Mehrteab &amp; Getu Advocates LLP<\/span><span class=\"guide-author-logo\"><img src=\"https:\/\/my.legal500.com\/guides\/wp-content\/uploads\/sites\/1\/2026\/03\/MLA-New-Logo.jpg\"\/><\/span><\/div>"},"post_detail":{"above_title":"<div class=\"guide-author-details\"><span class=\"guide-author\">Mehrteab &amp; Getu Advocates LLP<\/span><span class=\"guide-author-logo\"><img src=\"https:\/\/my.legal500.com\/guides\/wp-content\/uploads\/sites\/1\/2026\/03\/MLA-New-Logo.jpg\"\/><\/span><\/div>","below_title":"<span class=\"guide-intro\">This country specific Q&amp;A provides an overview of Mergers &amp; Acquisitions laws and regulations applicable in Ethiopia<\/span><div class=\"guide-content\"><div class=\"filter\">\r\n\r\n\t\t\t\t<input type=\"text\" placeholder=\"Search questions and answers...\" class=\"filter-container__search-field\">\r\n\t\t\t<\/div>\r\n\r\n\t\t\t\r\n\r\n\r\n\t\t\t<ol class=\"custom-counter\">\r\n\r\n\t\t\t\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the key rules\/laws relevant to M&A and who are the key regulatory authorities?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>According to Ethiopian law mergers and acquisitions (M&amp;A) are both recognized as a merger. The key legislations that are relevant to M&amp;A are the Commercial Code of Ethiopia Proclamation No. 1243\/2021, the Trade Competition and Consumer Protection Proclamation No. 813\/2013, , the Investment Proclamation No. 1180\/2020, Banking Business Proclamation No. 1360\/2025, Federal Income Tax Proclamation No. 979\/2016 (As amended), Communication Service Proclamation No. 1148\/2019, Capital Market Proclamation No. 1248\/2021, Civil Society Organizations Proclamation No. 1113\/2019, Value Added Tax Proclamation No. 1341\/2024, and other respective regulations and directives.<\/p>\n<p>The key regulators of M&amp;A in Ethiopia include, the Ministry of Trade and Regional Integration (MoTRI), Ethiopian Investment Commission in relation to M&amp;A involving foreign investors, National Bank of Ethiopia exercises strict oversight over M&amp;As in the financial sector, Ethiopian Communication Authority regulates M&amp;A in the telecommunications sector, Authority for Civil Society Organizations regulated M&amp;A involving civil societies, Ministry of Revenue enforces tax compliance in M&amp;A, Ethiopian Capital Market Authority has oversight on M&amp;A involving listed companies,<\/p>\n<p>For M&amp;A transactions between parties operating in at least two member states of the Common Market for Eastern and Southern Africa (COMESA), notification to the COMESA Competition and Consumer Commission (CCCC) is required.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What is the current state of the market?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The current state of the M&amp;A market has not shown much progress compared to previous years. The M&amp;A market has been affected by ongoing internal and geopolitical uncertainties. However, there are key indicators that a significant market shift is expected to materialize in the coming periods. This is due to factors such as Ethiopia\u2019s participation in the African Continental Free Trade Area and its accession process to the World Trade Organization which will introduce regulatory reforms that are investor friendly; the National Bank of Ethiopia\u2019s (NBE) June 30, 2026 deadline, which requires all commercial banks to reach a minimum capital of 5 billion Birr and failure to reach this minimum capital could lead to a statutory merger; the Banking Business Proclamation No. 1360\/2025 allowing foreign investors to engage in the banking sector; and the establishment of the Ethiopian Securities Exchange (ESX) is also expected to increase M&amp;A transactions in the country.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Which market sectors have been particularly active recently?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>In Ethiopia, the sectors that were most active in M&amp;A are the real estate and service sectors. Other active sectors include mining, crypto-mining, manufacturing and agriculture.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What do you believe will be the three most significant factors influencing M&A activity over the next 2 years?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Ethiopia&#8217;s M&amp;A landscape is set to evolve significantly over the next two years due to statutory mergers, regulatory reforms, and capital market formalization. The NBE&#8217;s 5 billion Birr capital requirement for commercial banks is expected to trigger voluntary or statutory M&amp;A activities. This is followed by Proclamation No. 1360\/2025, allowing foreign investors to acquire up to 40% stakes in these banks, shifting focus from survival to growth-oriented partnerships.<\/p>\n<p>In the data center services and cryptocurrency mining sector, foreign investors can only enter through acquisition of existing companies with active power permits after the government&#8217;s 2025 suspension of issuing new permits to investors in the sector; hence, contributing M&amp;A activities for the sector. Additionally, the operational maturity of the ESX is enhancing deal structures with transparent valuations and exit strategies for private equity. Together, these factors are transforming Ethiopia into a competitive regional hub for strategic acquisitions.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the key means of effecting the acquisition of a publicly traded company?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>In Ethiopia, acquisitions of shares in publicly traded companies are not common. This is because the Ethiopian Capital Market Authority (ECMA) and the Ethiopian Securities Exchange (ESX) have only been recently established. Towards the end of 2025 ECMA has issued a notice requiring mandatory listing of share companies that fulfil the minimum required threshold. Following this notice, share companies are now undergoing this listing and registration process. Upon completion of this step, as per the relevant capital market laws, share companies required to be registered cannot sell shares except through the exchange. Upon listing, the primary means of acquiring a publicly traded company will be through the acquisition of shares, which involves purchasing equity in the target company in compliance with applicable capital market laws and regulations<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What information relating to a target company is publicly available and to what extent is a target company obliged to disclose diligence related information to a potential acquirer?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>For private companies, the primary source of publicly available information is the Commercial Register, which provides access to constitutive documents specifically, the Memorandum of Association as well as the company\u2019s name and address, shareholding structure, management information, shareholders resolutions and licenses. However, there is no general statutory requirement for a private company to disclose due diligence information to a potential acquirer.<\/p>\n<p>In contrast, publicly traded companies are subject to a much more rigorous transparency regime managed by the ECMA and the ESX. Under Public Offering and Trading of Securities Directive these entities must provide a high level of continuous disclosure, including audited financial statements for the preceding three years, a detailed prospectus, and immediate reports on material events.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">To what level of detail is due diligence customarily undertaken?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Due diligence is typically tailored to the size, complexity, and risk profile of the transaction. Corporate and legal due diligence in Ethiopia generally covers the examination of corporate documents, material contracts, licenses, real estate, taxation, finance, employment, intellectual property and environmental compliance. The depth and scope are driven by transaction value, regulatory environment, financing structures, timing, and the extent to which risks are addressed through contractual protections or insurance, reflecting current market practice.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the key decision-making bodies within a target company and what approval rights do shareholders have?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The decision-making body within a target company differs depending on the form of its incorporation. For companies in general, the key decision-making bodies of a target company are the general meeting of shareholders, the board of directors (if any), and the general manager, each playing a critical role in M&amp;A transactions. Extraordinary general meetings approve fundamental corporate changes, including amendments to the memorandum of association, capital increases or reductions, mergers, divisions, conversions and dissolution. M&amp;A transactions require approval of extraordinary general meeting.<\/p>\n<p>The board provides strategic oversight, manages affairs not reserved for shareholders, and makes recommendations on transactions, while directors owe fiduciary duties to act in the company\u2019s best interests. The general manager handles daily operations and operational representation, supporting due diligence and integration but not typically making strategic approvals\/decisions.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the duties of the directors and controlling shareholders of a target company?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Directors play a pivotal role in corporate governance and are bound by fiduciary duties under Ethiopia\u2019s Commercial Code, primarily the duty of loyalty and duty of care. The duty of loyalty requires directors to act in good faith, prioritizing the interests of the company and its shareholders over personal or external interests. The duty of care obliges directors to perform their responsibilities with diligence and prudence, making informed decisions they reasonably believe serve the company\u2019s best interests. Directors must exercise independent judgment, avoid conflicts of interest, refrain from competing trades without authorization, disclose potential conflicts, and not accept gifts or benefits without consent from non-beneficiary directors or shareholders.<\/p>\n<p>Controlling shareholders also bear significant responsibilities to ensure transparency and prevent abuse of power. They may be personally liable for company debts if they exploit the entity for personal gain or mismanage assets. They must disclose control over subsidiaries, avoid reciprocal shareholding that inflates capital, and comply with the mandatory bid rule, offering a tender to all shareholders upon acquiring 50% or more of the company\u2019s capital and honoring redemption requests if their ownership exceeds 90%.<\/p>\n<p>For banks, the duties of directors and controlling shareholders extend further, being governed by stringent banking-specific corporate governance regulations in addition to the general principles under the Commercial Code.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Do employees\/other stakeholders have any specific approval, consultation or other rights?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Regardless of whether the target company is publicly traded or privately held, there is no legal requirement to consult with or obtain approval from employees in connection with an acquisition. Nevertheless, employees are protected by continuity rights: amalgamation, division, or transfer of ownership does not alter existing employment contracts. The terms and conditions of employment remain binding on the acquirer unless lawfully amended through a new employment contract, collective agreement, or written agreement between the parties. Accordingly, an acquirer should carefully review existing employment arrangements and consider appropriate engagement with employees in managing ongoing contractual relationships.<\/p>\n<p>Creditors are entitled to seek adequate security from the court where an independent expert determines that the restructuring jeopardizes their claims. Similarly, debenture holders may oppose the proposed arrangement and require redemption of their bonds at par value plus accrued interest or, in the absence of objection, continue as creditors of the acquiring or newly established entity.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">To what degree is conditionality an accepted market feature on acquisitions?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Conditionality is a standard and widely accepted feature in M&amp;A transactions, with no general prohibition on its use.<\/p>\n<p>While parties have broad flexibility to negotiate commercial conditions, warranties, representations, and MAC articles, the high prevalence of conditionality in Ethiopia is primarily driven by non-negotiable statutory requirements, including merger control, tax clearance, and sector-specific approvals.<\/p>\n<p>It is, therefore, a matter of common market practice to embody conditionality within definitive agreements.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What steps can an acquirer of a target company take to secure deal exclusivity?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>An acquirer may secure exclusivity through a no-shop clause in a term sheet (expressly designated as binding) or through a standalone exclusivity agreement. Under Ethiopian law, such arrangements are enforceable as binding contracts, provided the general requirements of validity under the Civil Code are met. The principle of good faith governs the performance and interpretation of the exclusivity obligation and mitigates against indirect or bad-faith circumvention through third-party negotiations.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What other deal protection and costs coverage mechanisms are most frequently used by acquirers?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Reimbursement of due diligence costs is a common deal protection mechanism in the Ethiopian M&amp;A market. Such provisions typically cover expenses incurred during the diligence process, including legal, financial, and regulatory advisory fees.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Which forms of consideration are most commonly used?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Cash consideration remains the predominant structure in Ethiopian M&amp;A transactions, typically paid at closing.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">At what ownership levels by an acquirer is public disclosure required (whether acquiring a target company as a whole or a minority stake)?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>There are no ownership-level triggers for public disclosure by an acquiror under Ethiopian law. Instead, transactions may trigger regulatory merger notification to MoTRI if the target company has a registered capital of ETB 30 million or more. The only public disclosure obligation in this case is the statutory two-month newspaper publication of a formal merger plan after general meeting approval, which applies irrespective of the acquiror\u2019s resulting ownership percentage. The purpose of publishing such notice in a public newspaper is to provide creditors of the target company with an opportunity to raise any objections to the transaction to the extent that it may adversely affect their interests.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">At what stage of negotiation is public disclosure required or customary?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Public disclosure is not required during negotiations. Under the Commercial Code, disclosure obligations arise only after the merger or division plan has been approved by the general meeting, with publication in a newspaper of nationwide circulation for two consecutive months, and posting at the company\u2019s head office and website, if any. Pre-approval, the merger plan and reports are available only to shareholders and creditors.<\/p>\n<p>Competition law notification occurs pre-closing if thresholds are met, but filings are generally confidential; publication is discretionary and uncommon. Disclosure is therefore triggered by formal procedural milestones, not by initial negotiations.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is there any maximum time period for negotiations or due diligence?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>There is no statuary provision providing a maximum time period for negotiation or due diligence.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is there any maximum time period between announcement of a transaction and completion of a transaction?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>There is no statuary provision providing a maximum time period for the completion of a transaction following announcement of a transaction.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there any circumstances where a minimum price may be set for the shares in a target company?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>There are no statuary provisions that provide circumstances where a minimum price may be set during the transfer of shares in a target company.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is it possible for target companies to provide financial assistance?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>A company may not issue its shares unless the payment required by law or by its memorandum of association has been duly made. Furthermore, it is not permitted to grant loans, guarantees, or any other form of financial assistance to third parties for the purpose of enabling them to acquire the company\u2019s own shares, specifically for share companies.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Which governing law is customarily used on acquisitions?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Usually, transaction agreements and other ancillary contracts stipulate that English and Wales law as governing law if one of the parties to the transaction is a foreigner. Where both parties to the transaction are Ethiopians, the governing law in most case will be Ethiopian law.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What public-facing documentation must a buyer produce in connection with the acquisition of a listed company?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>A person wishing to acquire a listed company shall present copies of the offer documents, along with the relevant information to the ECMA, securities exchange and the issuer of the securities subject to the acquisition offer. Furthermore, the buyer shall get approval from ECMA to acquire the shares of the listed company, particularly in case the buyer is also a listed company.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What formalities are required in order to document a transfer of shares, including any local transfer taxes or duties?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Any transfer of share shall be made in writing and transfer of shares shall be of no effect in relation to third parties unless it has been entered into the share register. In case of a private limited company, share transfer outside the company may require approval by members representing at least three quarters of the capital, unless a larger majority or unanimity is fixed in the memorandum of association. As per the Federal Income Tax Proclamation, a person who derives a gain on the disposal of a share shall pay capital gain tax of 15% on the amount of gain and obtain a capital gains tax clearance certificate from the relevant tax authority.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are hostile acquisitions a common feature?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>No, hostile acquisitions are not common in Ethiopia.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What protections do directors of a target company have against a hostile approach?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Given hostile takeovers are not regulated under the Ethiopian framework, there is no special protection for directors of a target company against hostile approach.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there circumstances where a buyer may have to make a mandatory or compulsory offer for a target company?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Pursuant to the Capital Market Proclamation, where a person acquires, directly or indirectly, more than 50% of the shares of a listed company admitted to trading, that person is required, within thirty (30) days of the acquisition, to submit an offer to purchase all remaining shares traded on the exchange.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">If an acquirer does not obtain full control of a target company, what rights do minority shareholders enjoy?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>In the absence of full control, the Commercial Code of Ethiopia provides a minority shareholders the right to demand redemption by the shareholder who holds shares representing ninety or more of the capital in a company. Furthermore, minority shareholders are protected against injury in a manner where the Commercial Code restricts a general meeting from being passed or challenged, which may have a clear effect of giving undue benefit to some shareholders.<\/p>\n<p>Furthermore, minority shareholders have the right to bring legal action for damages if they have been personally injured directly due to fault or fraud by the directors. They can also obtain full information and inspect the register of the company. In the case of shareholders representing 5% of the share capital, minority shareholders can request a court to appoint a representative to call a meeting and draw up the agenda for consideration. They can propose an ordinary general meeting for the appointment of a special investigator.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is a mechanism available to compulsorily acquire minority stakes?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes, the Commercial Code provides a right to have a majority shareholder representing ninety percent or more of the capital of a company to demand that minority shareholders have their shares redeemed by such majority shareholder.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\r\n<div class=\"word-count-hidden\" style=\"display:none;\">Estimated word count: <span class=\"word-count\">2839<\/span><\/div>\r\n\r\n\t\t\t<\/ol>\r\n\r\n<script type=\"text\/javascript\" src=\"\/wp-content\/themes\/twentyseventeen\/src\/jquery\/components\/filter-guides.js\" async><\/script><\/div>"}},"_links":{"self":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/comparative_guide\/136016","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/comparative_guide"}],"about":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/types\/comparative_guide"}],"wp:attachment":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/media?parent=136016"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}