Zurich, Septem­ber 2021 | A team of CMS Switzer­land un­der the lead of Stefan Brunnsch­weiler provided com­pre­hens­ive ad­vice to the share­hold­ers of AL­PORA AG on all leg­al as­pects re­gard­ing the sale of a ma­jor­ity stake to Ger­man-based Ser­afin As­set Man­age­ment. Duff & Phelps, A Kroll Busi­ness, served as the ex­clus­ive fin­an­cial ad­visor to the share­hold­ers of AL­PORA AG in con­nec­tion with the trans­ac­tion. AL­PORA AG, which was foun­ded in 2013, is act­ive in the sale of in­nov­a­tion ana­lys­is-based in­vest­ment mod­els to as­set man­agers in Switzer­land, Ger­many and the UK. Based on these in­vest­ment mod­els, cli­ents set up equity funds that have his­tor­ic­ally been able to gen­er­ate a risk-ad­jus­ted ex­cess re­turn on equity in­vest­ments. The Ser­afin Group in­tends to enter a new seg­ment with Ser­afin As­set Man­age­ment and es­tab­lish a di­git­al as­set man­age­ment busi­ness. It is en­vis­aged to enter the mar­ket with ser­vices for third-party cus­tom­ers in the second quarter of 2022 after ob­tain­ing the BaFin li­cense. In ad­di­tion to de­vel­op­ing and selling its own in­vest­ment solu­tions, the aim is to grow by ac­quir­ing spe­cial­ized as­set man­agers. The ac­quis­i­tion of a ma­jor­ity stake in the Swiss-based AL­PORA AG is the first step in this dir­ec­tion. The parties have agreed not to dis­close the pur­chase price of the trans­ac­tion. Stefan Brunnsch­weiler, Lead, Man­aging Part­ner, Glob­al Co-Head of the CMS Cor­por­ate/M&A GroupSamuel Fe­lix Gang, As­so­ci­ate, Cor­por­ate/M&AFlori­an Jung, As­so­ci­ate, Cor­por­ate/M&APas­cal Stock­er, As­so­ci­ate, Cor­por­ate/M&AAndrea Relly, Seni­or As­so­ci­ate, Cor­por­ate/M&AM­ark Ca­gi­enard, Part­ner, Tax­Chris­ti­an Gers­bach, Part­ner, Em­ploy­ment­Dr Mat­thi­as Kuert, Seni­or As­so­ci­ate, Cap­it­al Mar­ket­sTarik Salkim, Train­ee, Cor­por­ate/M&A

Septem­ber 2021 We are pleased to provide you with this year’s edi­tion of the “European M&A Out­look”, pub­lished in co-op­er­a­tion with Mer­ger­mar­ket

Be­cause of the trend to­wards a stronger aware­ness of "cor­por­ate so­cial re­spons­ib­il­ity", com­pan­ies both in Switzer­land and abroad are con­fron­ted with grow­ing de­mands for re­spons­ible cor­por­ate gov­ernance.The most re­cent ex­ample of leg­al de­vel­op­ments in this area is the in­dir­ect counter-pro­pos­al to the fed­er­al pop­u­lar ini­ti­at­ive "the Re­spons­ible Busi­ness Ini­ti­at­ive – Pro­tect­ing hu­man rights and the en­vir­on­ment" ("Konzern­ver­ant­wor­tungsin­i­ti­at­ive"). With the ex­piry of the ref­er­en­dum dead­line on 5 Au­gust 2021, new due di­li­gence and re­port­ing reg­u­la­tions on non-fin­an­cial mat­ters as well as in areas of con­flict min­er­als and child la­bour are ex­pec­ted to come in­to force in Switzer­land on 1 Janu­ary 2022. In re­cent years, the Gov­ernance, Risk and Com­pli­ance (GRC) ap­proach has been an ef­fi­cient tool for com­pan­ies with com­plex cor­por­ate struc­tures to meet ex­pand­ing reg­u­lat­ory re­quire­ments. By means of a com­pre­hens­ive ap­proach, the areas of Gov­ernance, Risk and Com­pli­ance have been merged and com­pan­ies are well ad­vised to ex­am­ine their com­pli­ance struc­tures crit­ic­ally and, if ne­ces­sary, ad­apt them to the latest de­vel­op­ments. New re­quire­ments un­der the Swiss Code of Ob­lig­a­tions Fol­low­ing the 29 Novem­ber 2020 re­jec­tion of the pop­u­lar ini­ti­at­ive "For re­spons­ible com­pan­ies - to pro­tect people and the en­vir­on­ment" ("Cor­por­ate Re­spons­ib­il­ity Ini­ti­at­ive" or "Konzern­ver­ant­wor­tungsin­i­ti­at­ive"), the Swiss par­lia­ment ad­op­ted the in­dir­ect counter-pro­pos­al. After ex­piry of the ref­er­en­dum peri­od, the new pro­vi­sions are ex­pec­ted to enter in­to force on 1 Janu­ary 2022. The counter-pro­pos­al provides for a gen­er­al re­port­ing ob­lig­a­tion as well as top­ic-spe­cif­ic due di­li­gence ob­lig­a­tions and trans­par­ency in con­nec­tion with con­flict min­er­als and child la­bour (see para­graph ii be­low for a defin­i­tion of each). The new re­port­ing ob­lig­a­tion will likely ap­ply to com­pan­ies first in the 2023 fin­an­cial year.The leg­al pro­vi­sions in the Swiss Code of Ob­lig­a­tions for bet­ter pro­tec­tion of people and the en­vir­on­ment, which par­lia­ment ad­op­ted as a counter-pro­pos­al to the Cor­por­ate Re­spons­ib­il­ity Ini­ti­at­ive, provide for two in­nov­a­tions: (i) re­port­ing ob­lig­a­tions on non-fin­an­cial mat­ters (Art. 964bis et se­qq. CO); and (ii) due di­li­gence and re­port­ing ob­lig­a­tions in the areas of con­flict min­er­als and child la­bour (Art. 964quin­quies et se­qq. CO).The vi­ol­a­tion of these ob­lig­a­tions is pun­ish­able by fines of up to CHF 100,000. Un­like the ori­gin­al pop­u­lar ini­ti­at­ive, the new pro­vi­sions do not con­tain any fur­ther li­ab­il­ity rules. Any fur­ther li­ab­il­ity claims might be gov­erned by gen­er­al ex­ist­ing leg­al pro­vi­sions.(i) Re­port­ing re­quire­ments on non-fin­an­cial mat­tersIn or­der to in­crease trans­par­ency, com­pan­ies are now leg­ally ob­liged to re­port on the risks of their busi­ness activ­it­ies in the areas of the en­vir­on­ment (es­pe­cially re­gard­ing CO2 emis­sions stand­ards), so­cial is­sues, la­bour is­sues, hu­man rights and anti-cor­rup­tion. They must also re­port the meas­ures they are tak­ing against these risks. If a re­port­ing com­pany does not fol­low the re­quire­ments for these non-fin­an­cial is­sues, the re­port must con­tain a trans­par­ent and foun­ded ex­plan­a­tion (i.e. the com­pany must "com­ply or ex­plain"). In these cases, the le­gis­lat­or as­sumes that in­vestors and con­sumers will judge a com­pany's cred­ib­il­ity for them­selves and turn away from un­trust­worthy firms.In or­der to be sub­ject to this re­port­ing ob­lig­a­tion, a com­pany must be a "pub­lic in­terest en­tity". This in­cludes, in par­tic­u­lar, pub­lic com­pan­ies, banks and in­sur­ance com­pan­ies as well as oth­er su­per­vised com­pan­ies of the fin­an­cial sec­tor, which, to­geth­er with any do­mest­ic or for­eign com­pan­ies con­trolled by them, have an an­nu­al av­er­age of at least 500 full-time em­ploy­ees and a bal­ance sheet total of at least CHF 20 mil­lion or a turnover of at least CHF 40 mil­lion in two con­sec­ut­ive years.(ii) Due di­li­gence and re­port­ing ob­lig­a­tions in the areas of con­flict min­er­als and child la­bour­All com­pan­ies with risks in their sup­ply chains in the sens­it­ive areas of child la­bour and con­flict min­er­als must now com­ply with spe­cial and far-reach­ing due di­li­gence ob­lig­a­tions, re­gard­less of their size. Con­flict min­er­als in­clude min­er­als or metals that con­tain tin, tan­talum, tung­sten or gold and ori­gin­ate from con­flict or high-risk areas. In ad­di­tion to "failed states", such areas in­clude in par­tic­u­lar re­gions in which armed con­flicts pre­vail or a fra­gile situ­ation ex­ists after such a con­flict. In this con­text, the Swiss le­gis­lat­or is also fol­low­ing EU re­com­mend­a­tions. In the case of child la­bour, a reas­on­able sus­pi­cion that products or ser­vices that are be­ing offered have been pro­duced us­ing child la­bour is suf­fi­cient for the ex­ist­ence of such du­ties of care.The new due di­li­gence reg­u­la­tions in Swiss law are largely based on ex­ist­ing EU reg­u­la­tions. The im­ple­ment­a­tion pro­vi­sions are reg­u­lated in the Or­din­ance on Due Di­li­gence and Trans­par­ency for Min­er­als and Metals from Con­flict Areas and Child La­bour. The Fed­er­al Coun­cil has already pre­pared an ini­tial draft of this or­din­ance, which was sub­ject to con­sulta­tion in Ju­ly 2021. The due di­li­gence ob­lig­a­tion in­cludes, among oth­er things, the ob­lig­a­tion to in­tro­duce a rel­ev­ant man­age­ment sys­tem and a risk man­age­ment plan. In the area of min­er­als and metals, com­pli­ance with the due di­li­gence ob­lig­a­tion will also be audited by an ex­tern­al ex­pert.The Or­din­ance also provides ex­emp­tions for due di­li­gence and re­port­ing ob­lig­a­tions. Re­gard­ing con­flict min­er­als, the reg­u­la­tion de­term­ines the an­nu­al im­port and pro­cessing quant­it­ies for min­er­als and metals up to which a com­pany is ex­empt from the ob­lig­a­tions. In the area of child la­bour, the reg­u­la­tion provides ex­emp­tions for small and me­di­um-sized en­ter­prises (SMEs) and for com­pan­ies with low risks in this area. The start­ing point for the risk as­sess­ment is the coun­try of pro­duc­tion ac­cord­ing to the in­dic­a­tion of ori­gin (i.e. the "made in" des­ig­na­tion). The UNICEF Chil­dren's Rights in the Work­place In­dex can be con­sul­ted for this as­sess­ment. In ad­di­tion, com­pan­ies that already com­ply with in­ter­na­tion­ally re­cog­nised equi­val­ent reg­u­la­tions are ex­empt from the ob­lig­a­tions. GRC ap­proach as an in­dustry stand­ard? Dy­nam­ic changes in the reg­u­lat­ory and eco­nom­ic en­vir­on­ment present glob­al com­pan­ies with the unique chal­lenge of de­vel­op­ing and im­ple­ment­ing a hol­ist­ic ap­proach to cor­por­ate gov­ernance from a mul­ti­tude of man­dat­ory and non-man­dat­ory reg­u­la­tions, cre­at­ing ex­tern­al and in­tern­al policies for stake­hold­ers, and tak­ing in­to ac­count com­pany-spe­cif­ic op­por­tun­it­ies and risks. In re­sponse to this ini­tial situ­ation, the GRC ap­proach has be­come for many com­pan­ies a co­ordin­ated, in­teg­rated and hol­ist­ic com­pli­ance and risk man­age­ment mod­el. The ac­ronym "GRC" stands for Gov­ernance, Risk and Com­pli­ance, which en­com­passes the three most im­port­ant areas of ac­tion for re­spons­ible and in­teg­rity-based cor­por­ate gov­ernance, which are already closely linked by their nature. The goal of the GRC ap­proach is to in­tel­li­gently link these three areas. The aim is to cre­ate trans­par­ency and se­cur­ity for in­tern­al and ex­tern­al risks in or­der to pre­vent neg­at­ive eco­nom­ic, leg­al and even crim­in­al con­sequences for the com­pany and its repu­ta­tion. Even if a com­pany already pos­sesses well-de­veloped con­trol and man­age­ment sys­tems, the ex­ist­ing syn­er­gies are of­ten not con­nec­ted in a mean­ing­ful way. With the in­tro­duc­tion of a GRC sys­tem in the com­pany's busi­ness pro­cess, the in­tern­al func­tions of risk man­age­ment, in­tern­al con­trol, com­pli­ance and in­tern­al audit can ef­fi­ciently use syn­er­gies. In this way, re­dund­an­cies in the pro­cesses can be avoided, which usu­ally leads to a sav­ing of costs and staff ca­pa­cit­ies. At the same time, the uni­form ap­proach means that re­spons­ib­il­it­ies can be clearly as­signed with­in the com­pany and dif­fer­ent as­sess­ments of identic­al facts and risks by dif­fer­ent de­part­ments can be avoided. This goes hand in hand with the cre­ation of trust among in­tern­al and ex­tern­al ad­dress­ees. A GRC sys­tem that is well ad­ap­ted to the in­di­vidu­al re­quire­ments of a com­pany im­proves risk iden­ti­fic­a­tion and con­trol. This en­ables the man­age­ment of a com­pany to make stra­tegic de­cisions and take op­er­at­ive meas­ures on the basis of clear­er in­form­a­tion. Risks are re­cog­nised earli­er and man­aged more ef­fi­ciently.An in­dustry stand­ard for the in­ter­ac­tion of sub­sys­tems with­in the gov­ernance struc­ture, which is well-known in the fin­an­cial in­dustry, is the in­ter­na­tion­ally re­cog­nised mod­el of the "three lines of de­fence". It is based on the prin­ciple that the re­spons­ib­il­ity for risk lies primar­ily with the ac­count­able per­son. The mod­el was re­cently re­vised by the In­sti­tute of In­tern­al Aud­it­ors (IIA) and places pro­act­ive risk man­age­ment at the centre of a com­pany's gen­er­al gov­ernance. The first line rep­res­ents op­er­a­tion­al man­age­ment, which is sup­por­ted and mon­itored by a second line (i.e. the com­pli­ance and leg­al de­part­ments). The third line is the in­tern­al audit de­part­ment. The up­dated ver­sion of the IIA bet­ter re­flects the fact that in risk-based de­cision-mak­ing, seiz­ing op­por­tun­it­ies for the com­pany can be as im­port­ant as pro­tect­ing com­pany val­ues.No stand­ard mod­el fits every com­pany. The design of a GRC sys­tem must be ad­ap­ted to the spe­cif­ic risk pro­file of a com­pany, which is de­term­ined by nu­mer­ous in­tern­al and ex­tern­al factors. As a first step, it is ne­ces­sary to as­sess the ex­ist­ing struc­tures, busi­ness mod­el and cur­rent and fu­ture activ­it­ies of the com­pany, as well as the eco­nom­ic and leg­al en­vir­on­ment in which the com­pany op­er­ates. As a second step, this risk as­sess­ment leads to the design of a GRC sys­tem that is ad­ap­ted to the com­pany's spe­cif­ic risks and struc­ture. Fur­ther in­form­a­tion Our com­pli­ance spe­cial­ists at CMS Switzer­land have ex­tens­ive ex­per­i­ence when it comes to ad­vising com­pan­ies on in­tro­du­cing, im­ple­ment­ing and over­see­ing com­pli­ance man­age­ment sys­tems for large cor­por­a­tions and SMEs. We are also able to draw upon the ex­per­i­ence of our CMS col­leagues in oth­er jur­is­dic­tions where com­par­able stat­utory re­quire­ments ex­ist.The con­cise present­a­tion be­low con­tains an over­view of the most im­port­ant an­ti­cip­ated changes that com­pan­ies in Switzer­land will need to pre­pare for, along with re­com­mend­a­tions on how the top­ic of com­pli­ance should be ap­proached.

Zurich, 19 Ju­ly 2021 | HEB Swiss In­vest­ment AG, a Zurich-based hold­ing com­pany owned by a Ger­man private in­vestor, has entered in­to an agree­ment to sell its ma­jor stake (29.3 %) in lis­ted Cicor Tech­no­lo­gies...

A team of CMS Zurich led by Stefan Brunnsch­weiler ad­vised CCC Group on all leg­al as­pects of the sale of Vögele Shoes - a tra­di­tion­al brand in the Swiss shoe trade that is cel­eb­rat­ing its 100th an­niversary...

Zurich – A team of CMS Switzer­land and CMS Italy led by Stefan Brunnsch­weiler ad­vised Nahrin on all leg­al as­pects of the ac­quis­i­tion of the in Italy based Swis­s­care SRL from Alcedo IV and the two found­ing...

The CMS Cor­por­ate/M&A Group is pleased to launch the thir­teenth edi­tion of the European M&A Study

Europe has re­turned to a ‘buy­er-friendly’ en­vir­on­ment, after the COV­ID-19 pan­dem­ic cre­ated more risk-averse at­ti­tudes. As a res­ult, CMS’ latest an­nu­al M&A study iden­ti­fied sig­ni­fic­ant in­crease in...