Global Business Magazine - April 2012 by Corporate ABM

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THE SOCIAL NETWORK A LITTLE MORE CONVERSATION, A LITTLE LESS BRANDING

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Business Talk This month’s cover story is about Social Media, and its increasingly pivotal role in communication and marketing. We look at the business behind the phenomenon. When it comes to taking business to new heights, we could learn a thing or two from Richard Branson, one of the world’s most flamboyant entrepreneurs. In this month’s issue, we ask him about his successful business empire – and why the world is not enough. On the subject of movers and shakers, we find out about Washington’s Young Atlanticist Network – the NATO Summit Working Group that has brought together all world ‘future leaders’ to work together on an informal platform. So why are they so unique? They all just happen to be under the age of 35. In Capital Markets, we examine whether equity financing is still a good option in the current market conditions. We also look at SME’s and the real challenges they face in having their financing needs met. Mergers & Acquisitions delves a little deeper into the world’s fourth largest economy (behind Japan’s) – the US Middle Market. We also look at the growth of the Malaysian economy and the factors that could provide the necessary impetus for further M&A activity. Going behind the headlines, we get an insight into investment opportunities in China from an UK (expat) perspective, and how a detailed analysis of individual regions is required to better understand their economy as a whole. Our Intellectual Property Law focus looks at the Dominican Republic’s system for protecting intellectual property. We also look at copyright in Belgium and whether it is an economically valuable intellectual property right. Looking at the UK, we delve further into the world of Private Equity, and how a long-term approach enables it to not just weather economic shocks but actually prosper in the current economy. We also look at why Africa is a serious longterm opportunity for international investors. And with April now here, our thoughts are already turning towards escaping to sunnier climes. Our Luxury Brand Series profiles luxury spa resorts that will (literally) put a spring in your step.

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CoVer Story - tHe SoCiaL netWorK: a LittLe More ConVerSation, a LittLe LeSS BrandinG

The Social Network

A little more conversation, a little less branding. The internet has evolved over the last decade. Since MySpace launched in 2003 and Facebook in 2004, it isn’t enough to simply drive browsers to your website. Brands are increasingly turning to social media as a way to engage with their actual and potential customers. While social marketing doesn’t offer the same control or breadth of coverage as print and broadcast advertising, it can be used as a powerful supplement to those media if it’s used well.

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At present, the two main social media platforms are Facebook and Twitter, although the popularity of different platforms waxes and wanes as new social networks are launching all the time. In 2011 alone, four new social networks came on stream: Pinterest, Google+, Wellwer, and Faces.com. Participants in these networks share links, stories, recommendations, and show off their own creativity with what is generically known as User Generated Content (UGC). This matters for your brand for two reasons: firstly, participants in these social networks discuss their brand experiences – both good and bad – with friends in their network. Secondly, social networks are an excellent channel for that most valuable promotional tool: the word-of-mouth recommendation. Several larger brands are already starting to steer the conversations in social networks their way. The Body Shop and Nike are among many brands that have Facebook pages. Nike focuses on creating “shareable content” for their followers to reshare on their own Facebook pages. The brand’s own Facebook page contains high-quality photographs from events that they sponsor, like the music festival SXSW, and Nike-badged team mascot pictures. Nike’s “fans” on Facebook then repost these pictures on their own pages – either to show that they were at a popular event, or to show allegiance to a team – and the Nike brand is shared with that person’s social network as a result. Each Facebook user has on average around 350 friends so whenever 200 people share a picture, 70,000 copies of the Nike logo appear on people’s screens. Not only that, the Nike brand is tacitly endorsed by each person that shares it: that’s brand exposure that can’t be bought.

are interesting, different, important and also answer any questions people have.” This is a theme that both Hannah and Carrie expand on: the importance of using Twitter as a channel for conversations, rather than as a traditional advertising medium. “We've never really looked at it as a way of acquiring new customers, so that keeps it fun for both us and our followers. Nobody wants to be marketed at,” Carrie told Global Business Magazine. “I'd like to think it's 50/50 [talking and listening], y'know, like an actual conversation… We read every tweet that mentions "ThinkGeek," even if it's not an @-mention, and reply to everything that needs a response. Sometimes it's just to say happy birthday, sometimes it's to fix a botched order. Unfortunately, we can't read every tweet that our followers tweet - that stream looks like blur in real-time. Incredibly, despite the sheer volume of communication, it’s Carrie who does almost all of the tweeting: “We have backup tweeters and share the load around holidays [but] it's really mostly one person – myself…” Carrie explains that it’s easier to track customer service issues this way. She also says that this “helps to solve the voice question that comes up in brand marketing,” although she pulls a face as she says that. And that distaste for the language of branding: conversion rates, lifetime earning potential and the like, is what seems to underpin the success of ThinkGeek’s social network. “[Half of our Twitter stream] is pure entertainment and that's us tweeting geeky dates in history, videos, news articles, that kind of thing. We just try to make our followers happy in whatever way we can.”

The cosmetic and skincare company, Body Shop, uses its Facebook channel to highlight the causes it supports. The core ethos of the Body Shop brand is its commitment to certain values: they were one of the pioneers of the “Beauty without Cruelty” movement, and they now embrace messages of empowerment for women across the world. As such, their Facebook presence focuses on sharing news of their charitable and campaigning work. The brand’s followers then share this news with their like-minded friends, which results in a high-impact, word-of-mouth campaign that is built around a set of shared values. Again, this is the kind of exposure money can’t buy.

One of the things that makes the ThinkGeek Twitter account so compelling is the fact that Carrie and her colleagues evidently swim in the same sea of pop- and geek-culture references as the ThinkGeek customer base. The Twitter feed shows hundreds of on-going conversations about Doctor Who, Star Trek, videogames and science, and the customers’ enthusiasm for all things geeky is authentically reflected on the ThinkGeek account.

Valuable lessons from nimble brands

“[You have to] keep things short and sweet, getting your message across in just 140 characters is a real talent!” Hannah laughs. “From our point of view, [Teapigs’ Twitter account] allows us to stay connected with our customers and work out who they are and what they like. It’s important that we have a proper relationship with them and listen to what they say. It’s also a chance to have a bit of fun and a place where people can engage with our brand,” she concludes.

Smaller brands like ThinkGeek and Teapigs are taking to Twitter as a low-investment, high-impact social network. ThinkGeek started using Twitter in 2008, Teapigs in 2010, but it took a while for them to realise the full benefit of using these networks. “We set up an account in early 2008, but it wasn't until the end of 2008 that we started using it for something more than a [news] feed,” says Carrie Gouldin of Think Geek. “We were using Twitter as individuals since early on, so it just made sense: if our customers are there, too, why wouldn't we want to talk with them?” Hannah from Teapigs agrees that conversation is the most important part of the Twitter experience: “We started using [Twitter] properly in mid-2010. We’d always had a page because ‘it was the thing to do’ but only got to grips with it then as a media channel around this time. We use it as a platform to ‘chat’ to our customers in the same way we would at a show or face to face. We tweet things we think

The most important lessons to be learned from ThinkGeek and Teapigs’ experiences on Twitter is that authenticity wins over deliberate branding exercises every time.

Social media disasters Not everyone manages such resounding success on social media, however. There have been some high-profile disasters in recent months where branded Twitter accounts have been hijacked by bitter (soon-to-be-ex) employees, been used to broadcast personal messages by mistake, or been subject to the kind of colossal insensitivity that can render a brand toxic in minutes. International design studio, Marc Jacobs, suffered from a very public meltdown by one of their interns in March April 2012 • GBM • 5

CoVer Story - tHe SoCiaL netWorK: a LittLe More ConVerSation, a LittLe LeSS BrandinG

last year. The unnamed intern to CEO Robert Duffy was charged with posting to the @markjacobsintl Twitter feed. Perhaps he should have been relieved of his duties after posting 'I was asked to do this until we found a replacement… I hate this job… Robert is so picky! We have presented him with 50 people. He’s not happy.' But the intern was left to soldier on until his last day when he tweeted from the brand’s account, “You guys and gals have no idea how difficult Robert is. I am only an intern. My last day is tomorrow. I wouldn't be tweeting this if not..! Good luck! I pray for you all. If you get the job.” The intern had only been responsible for the Twitter feed for six weeks after Mr Duffy surrendered the responsibility due to his own PR calamity. “'Any ideas for a stage set for our fashion show? It’s at the armory on 27th Street. I’m stuck. No idea. Something minimal please? I have one week!” tweeted Duffy, causing gasps of outrage about his lack of preparedness for this major event in the fashion calendar. Chrysler alienated an entire city when one of their social media consultants, Scott Bartosiewicz, tweeted the following from the @ChryslerAutos account: “I find it ironic that Detroit is known as the #motorcity and yet no one here knows how to f****** drive.” Scott says that he meant to tweet it from his own account and didn’t notice that he was

still signed in with the Chrysler corporate Twitter handle. Scott lost his job, and his agency – New Media Strategies – lost Chrysler’s account. A similar event at the American Red Cross was handled with humour and aplomb, however. When employee “Ryan” sent a tweet from the wrong account that read “Ryan found two more 4 bottle packs of Dogfish Head’s Midas Touch beer…when we drink we do it right #gettingslizzerd” the organisation immediately followed up with “We’ve deleted the rogue tweet but rest assured the Red Cross is sober and we’ve confiscated keys.” Ryan also commented: “Rogue tweet from @RedCross due to my inability to use hootsuite…I wasn’t actually #gettingslizzard but just excited! #nowembarassing.” The light-hearted response generated a lot of goodwill for the Red Cross, and the number of people retweeting the original tweets guaranteed the right kind of mass exposure. In addition, Dogfish Head Craft Brewery called for their customers to support the Red Cross in a similarly lighthearted tone: “Please join Dogfish Head Craft Brewery in raising money for the American Red Cross… Note: Alcohol can often make you more dehydrated. Dogfish Head recommends not drinking immediately before or after donating [blood]!” Both organisations came away from the incident with a stronger brand image. One of Twitter’s unique selling points is the ability to way in which Twitter users respond to current affairs (see “Trending Topics” in the glossary). Several brands have fallen foul of their attempts to link themselves to trending topics without fully understanding the details of the event in question. Fashion designer Kenneth Cole responded to news of the Arab Spring with what must have seemed, to him, to be a little timely publicity: “Millions are in uproar in #Cairo. Rumor is they heard our new spring collection is now available online… -KC” Within seconds, that tweet appeared in the feeds of Twitter users who were watching the horrors unfold in Cairo. Within minutes, the Kenneth Cole brand had become a trending topic, and not for the right reasons. Kenneth Cole deleted the original tweet and responded on his Facebook account: “I have spent a considerable amount of time reading your comments, and value your insights and feedback. I want to reiterate that my use of levity with regard to this momentous event was extremely inappropriate. My thoughts are with the courageous people of Egypt. -KC” But it was too late – on Twitter, the Kenneth Cole brand was tainted by the ill-thought-out message.

Taking your ﬁrst steps in social marketing To many users, social networks feel more private than even email despite their open nature. Perhaps this stems from the conversational nature of the interactions. People tend to restrict their social networks to friends, family, and a few selected others: whether you like it or not, people won’t invite you in to your social network if they feel that you don’t share their values, or that you don’t have something of interest to offer. Here are a few ground rules. Be authentic – never espouse a set of values that you aren’t prepared to operate by. Your followers will compare what you say with how you behave, and if they discover your hypocrisy they will disseminate the news of their disappointment through their networks faster than you can say “damage limitation exercise.” 6 • GBM • April 2012

Don’t spam – social networks are not like broadcast media. When someone adds you to their Twitter “follows” or when they “like” you on Facebook they are, in effect, inviting you to join a conversation. Be respectful of boundaries and only make contributions that the audience will value. What might be acceptable in advertising but irritating via email becomes positively obnoxious on social networks.

traditional broadcast networks, and you will never exercise the control over social media that you do over advertising on broadcast media. However, social networks offer something that other channels don’t have: the chance of a two way conversation. Treated right, social networks can be a valuable source of information about who your customers are and what they think.

Apologise when you slip up – social networks are very public forums and deleted tweets never go away. You can guarantee that if you make a mistake on Facebook or Twitter, someone will have a screen-shot of it. Own up to your mistakes and put them right gracefully and with good humour.

Marketing via social networking requires a significant change in mind set from traditional marketing activities, but it also offers benefits that can’t be found elsewhere. Start with a personal account of your own to get a feel for the way social networks operate, and see where the conversation takes you.

Join the conversation – don’t treat social networks as broadcast media. Social networks still lack the reach of

GLOSSARY

Tweet: a message that contains a maximum of 140 characters sent via the social networking platform Twitter.

Twitter Handle: a person or organisation’s Twitter name. Twitter Feed: all of the tweets from a particular Twitter Handle. Follow: once you “follow” a Twitter user, you see that user’s public feed on your timeline when you log in. @Mention or Mention: on Twitter, putting “@TwitterHandle” anywhere in a message turns this into a mention for the user “TwitterHandle”. While anyone can see the message, the user “TwitterHandle” will be notified that they have been mentioned.

@Replies:

Twitter users often respond to other users’ tweets by beginning their message with @ TwitterHandle.

Hashtag: on Twitter, text that is preceded by a hash (#) is called a hashtag. Commonly used hashtags

include #FF for “Follow Friday” (see below) or the name of a celebrity or an event. This has two effects – the first is that Twitter users can browse all of the tweets that contain a certain hashtag, regardless of who sent them. The second is that these words and phrases become Trending Topics (see below).

Follow Friday: social networks tend to grow through introduction on Twitter. Follow Friday (#FF) is

a user-generated tradition. On Fridays, users recommend one or more people that they think their Twitter followers would also like to follow.

Trending Topic: a word or phrase that is being used in an above-average number of tweets. For

example, in the UK blizzards this winter, #UKSnow became a trending topic, whereas #GOP trends during the US Republican party primary debates.

Facebook Friend: unlike Twitter “follows”, Facebook “friends” are two-way. A person sends a

friend request to someone else and, if it is accepted, the two people can send each other messages and see each other’s updates on their timeline.

Facebook Like: “liking” is unilateral, and users can like just about anything on Facebook, from a friend’s status message to a photograph to a brand.

Facebook Shares: “sharing” or “re-sharing” material is the process of re-displaying content

from another person or organisation’s account on your own page. Brands like Nike spend a lot of time researching and creating content that they hope that users will reshare. April 2012 • GBM • 7

GLoBaL CapitaL MarKetS report 2012

Global Capital Markets report Tracey Pierce Director of Equity Primary Markets Phone: 020 7797 4152 tpierce@londonstockexchange.com

London’s capital market: An international growth story The financial crisis has raised important questions about the health of capital markets and what the future holds: Is equity financing still a good option under current market conditions? How will future regulation shape the ability of companies to tap markets? While global IPO markets have not returned to pre-crisis levels, over the last two years there has been a strong recovery. London has been a significant contributor to that recovery. In 2011, companies on our markets raised £12.9 billion through IPOs, a 27% increase on the previous year, and £9.2bn was raised in further issues, indicating that investor appetite remains strong. Equity financing has, throughout the financial crisis, proved itself a good alternative for companies both large and small to raise capital in an environment where bank financing has remained constrained. Historically, London has always been a premiere destination for both domestic and international companies, from a wide range of sectors, looking to grow through equity financing. Despite tough market conditions over the past few years, London has continued to attract companies from around the globe and remains the world’s most international exchange with over 3,000 companies from over 110 countries listed and traded on its markets. London’s unique position allows it to act as a gateway between East and West, operating in a time zone that enables simultaneous trade, in the world’s preeminent business language. Its openness to developing relationships with international partners is one of its greatest strengths. Today, London offers companies access to a deep pool of international capital, high standards of regulation and transparency, strong corporate governance, and a world class advisory and skills base. 8 • GBM • April 2012

Last year we saw good growth in our Primary Markets business with new issues from across the world including Nomos Bank, Ophir Energy and DP World. We also saw our largest ever international IPO, Glencore, which raised over £6 billion, and was the first company to enter the FTSE 100 at admission in 25 years. Our pipeline for this year is encouraging with underlying demand for capital remaining strong. The London Stock Exchange is a leading venue not just for shares, but also other securities such as Global Depository Receipts (GDRs). Our International Order Book (IOB) on which GDRs are traded, has enabled companies to raise over £40 billion since its inception in 2001, and celebrated ten years of increasingly strong trading in 2011. In the month of January 2012 alone, the IOB had a turnover of over £10 billion and is now the world’s most liquid market for trading GDRs. The market now trades over 300 securities from 48 countries across the world, further proof of London’s claim as the world’s most international market. In addition to being an important venue for large national and international companies to list, through our junior market AIM, we support ambitious small and medium sized companies who form the backbone of the UK economy. A 2009 Grant Thornton study showed that UK AIM companies contributed £12 billion to UK GDP and created 250,000 jobs in just one year (Grant Thornton: Economic impact of AIM and the role of fiscal incentives). In 2011, AIM saw over £3.8 billion raised through new and further issues and welcomed 45 new companies to the market. This year is already showing encouraging signs as companies are regaining confidence and considering expansion by tapping London’s markets for growth capital. While there are positive signs of recovery in

the markets, there are challenges that must be overcome as we operate in a landscape that is undergoing major regulatory change. In order for London to continue to flourish as a preeminent listing venue we believe it is vital that any future UK regulatory changes must consider London’s attractiveness as a financial centre. While strong financial markets need robust and effective legislation, this should not diminish the UK’s ability to compete internationally, indeed London’s respected regulatory regime is one of the cornerstones of its success. The London Stock Exchange Group (LSEG) has been actively involved in the debate, engaging with Government, policy makers and market participants to ensure that new regulation bolsters the UK’s competitive position. The importance of maintaining the health of London’s capital markets is not restricted to the City, but rather has a significant impact on the UK economy as a whole. A healthy IPO market provides businesses in the UK with cheaper and improved access to finance and enables job creation. This is particularly true in the case of AIM, and we have been in consultation with UK and European policy makers to discuss the importance of small caps, to ensure that regulation encourages issuer and investor interest, and boosts market liquidity. The London Stock Exchange Group is a vital part of the UK’s business community and we take our responsibility in supporting the growth of companies seriously. We play an important role in facilitating access to capital markets. As global business conditions continue down the path towards recovery, we will be leading from the front, providing a platform for companies both large and small to raise essential capital for growth. Tracey Pierce: Director of Equity Primary Markets, London Stock Exchange Group

The world’s capital market

The London Stock Exchange Group is Europe’s leading diversified exchange business, incorporating Borsa Italiana and the London Stock Exchange. With over 400 member firms trading and more than 2,600 companies quoted across its markets, the Group operates the largest and most liquid equity marketplace in Europe. The London Stock Exchange’s Primary Markets team put UK and international companies in touch with one of the world’s deepest pools of global capital. Our markets are home to companies from all over the world, ranging from start-ups to some of the world’s largest corporations. For further information, visit www.londonstockexchangegroup.com

GLoBaL CapitaL MarKetS report 2012

NYSE Euronext’s strategy in support of small and medium-sized listed companies Their contributions to innovation, growth and job creation make SMEs an essential component of the European economy, but in the post-crisis economic environment these companies face huge challenges in terms of financing. Today, 92% of these needs are met by bank loans, 7% by private equity and only 1% by the financial markets. In the wake of the financial crisis, many SMEs have found that their traditional sources of financing have dried up or are offering far less attractive solutions. This hinders their ability to invest and develop, and ultimately impacts the health of their entire business. Helping SMEs gain access to the capital markets is therefore a crucial issue for the European economy today.

These transactions are primarily designed for companies listed on compartments B and C of NYSE Euronext and on NYSE Alternext, and will be coordinated by a bank or a listing sponsor that will issue the prospectus approved by the regulator. An active promotion campaign will use all the traditional communication channels to raise awareness and ensure access by individual investors: online brokerage websites, NYSE Euronext’s website, press releases and classical advertising, just like for an IPO. While the offer is intended for listed companies, there is actually nothing to prevent an unlisted SME from preparing a bond emission and listing the bonds on one of the NYSE Euronext markets.

To address this changed environment, NYSE Euronext began rolling out a strategic plan in 2010 to support access to the financial exchanges for small- and mid-caps, and to help those already listed to find the financing they need. Overall, around 80% of the companies listed on NYSE Euronext’s European markets have market capitalisation of less than €1 billion. In other words, they form the core of our market model.

This offer has numerous advantages for SMEs, beginning with the expansion of their financing sources while reducing their dependency on bank credit. A successful bond issue can often help companies negotiate better loan conditions with their bank. Bonds are generally reimbursable with a bullet payment, rather than at periodic deadlines as is sometimes the case for bank credit. They offer a strategic advantage for issuers in that they have no shareholder dilution effect, do not include covenants and are not subject to the pressures that weigh down market capitalisations in the current environment. They are also an efficient source of financing for external growth strategies.

A revolutionary bond offer One of the most spectacular initiatives is without a doubt the launch this spring of a new pan-European bond offer dedicated to SMEs. This type of financing has traditionally been reserved for large capitalisations, with bond issues purchased primarily by institutional investors. Now, small- and mid-caps can issue bonds, which will be available for purchase to individual investors. 10 • GBM • April 2012

Last but not least, this offer is an excellent tool for reconnecting private savings and corporate investments and it should help

boost equity trading once retail investors have invested in the company’s bonds. For individual investors, NYSE Euronext's bond offer represents an opportunity, giving them access to a range of investments previously reserved for institutional investors, and that provide higher returns than the traditional products available to them. This new offer is subject to clear, efficient and rapid procedures with simplified documentation, tighter deadlines, competitive issuance costs and no additional declaration requirements for companies listed on NYSE Euronext markets. Finally, all issues will be rated. Dedicated rating agencies have been identified and will be able to provide an appropriate rating for SMEs such as Euler Hermes Rating or Creditform, to ensure this process. Private placement, an outstanding financing tool Private placement represents a second source of financing that is particularly suitable for listed SMEs in the current environment. This type of transaction was very popular in 2010 and 2011 on NYSE Euronext and NYSE Alternext, with a total of more than 60 operations in all. Private placement, which offers excellent flexibility, is in some cases more suited to a company’s needs than a classic increase in equity with a public offering, which brings with it certain requirements with regard to calendar, price and volatility. However, nothing would actually prevent both transactions from being

Contact: Marc Lefèvre Head of Coverage Europe, NYSE Euronext. Tel : + 33 1 49 27 10 87 mlefevre@nyx.com http://europeanequities.nyx.com

pursued simultaneously if so desired. With private placement, SMEs can choose their shareholders: family offices, private equity, corporate funding, etc. By selecting qualified investors, the company limits its exposure to the volatility of the economic environment, unlike a public offer with a traditional rights issue. In practise, the price of the new shares must be at least within the three-marketday average, with a maximum 5% discount or decided otherwise by the shareholders’ meeting up to 10% of total equity. It should be noted that for offers greater than 10% of the total number of shares listed, the prospectus is still necessary, so updating the reference document each year allows better responsiveness for undertaking this type of operation. There is no minimum for a private placement, which leaves room for real flexibility. Promising results in 2011 Despite the economic downturn in 2011, NYSE Euronext continued to play its part in financing the economy. Of the 44 companies that were introduced on our European markets, 38 were SMEs — an encouraging result if we recall the market conditions of the second half of the year. There were notably 16 market introductions with capital raised on NYSE Alternext, compared with eleven in 2010. It is also satisfying to note that a large number of SMEs used the stock exchange in 2011. There were approximately one hundred instances of raised capital on the primary and

secondary markets involving 90 companies. This means that 15% of listed companies used the market to seek financing in 2011, compared with less than 10% in recent years. Overall, companies listed on NYSE Euronext’s European markets (small-, mid- and large-cap) raised slightly more than €66.5 billion last year, through bonds (€50.2 billion), equity (€14.57 billion) and convertible bonds (€1.7 billion). Looking at equity and convertible bonds alone, there has been a 37% increase over 2010. Going further to support SMEs Today, too few investors, brokers and analysts show interest in SMEs, particularly as European reforms such as Basel III and Solvability II have led the major players in the financial sector to turn away from smaller caps. It is therefore crucial to develop a more positive environment for small- and mid-caps in Europe. In 2010, NYSE Euronext created a European Government Affairs and Public Advocacy team to promote our positions and those of issuers with the European Commission. For its part, the Commission has introduced the ‘Think Small First’ principle, by which every proposed text at the European level will be subject to an ‘SME compatibility’ test. Of particular importance for facilitating access to the financial markets for SMEs are, the MiFIR(D) and MAR(D) directives concerning market structure and functioning; the Prospectus directive defining listing conditions; the Transparency directive that addresses financial communication for bonds;

and lastly the numerous other texts currently being examined that address governance issues, notably the Audit directive. In response to an SME action plan proposed by the Commission in 2011 aimed at facilitating market access for small and medium-sized companies, NYSE Euronext contributed to formulating a series of six recommendations for smoothing out the difficulties encountered by SMEs that wish to enter the stock exchange. These recommendations were submitted to the SME Finance Forum of the Enterprise and Industry Directorate General, in charge of advising the Commission on topics relating to small and medium-sized companies. These include proposals relating to tax reform, the creation of funds to promote investment in SMEs and the completion of high-calibre research on small and medium-sized companies. These are strategic issues for listed companies, which is why they benefit from the joint action carried out by the NYSE Euronext teams in charge of listings and by the European Government Affairs and Public Advocacy team. This approach is perfectly aligned with NYSE Euronext’s mission of advocating for its clients and for the financial markets, with regard to such key issues as job creation, tax reform, governance and market structure. In Europe as in the United States, NYSE Euronext is an active voice for issuers with governments and financial authorities, and will continue to regularly provide information about all the issues that can impact our global markets. April 2012 • GBM • 11

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BRITISH VIRGIN ISLANDS O’Neal Webster Christopher Simpson Counsel, Corporate Finance Telephone: 1 284 494 5808 Fax: 1 284 494 5811

csimpson@onealwebster.com www.onealwebster.com

Securities and investment business regulations in the British Virgin Islands It has been almost two years since the Securities and Investment Business Act, 2010 (‘SIBA’) in the British Virgin Islands (‘BVI’) was established – coming into effect on May 17th 2010. The BVI is the world’s largest offshore corporate domicile, and is known for its corporate flexibility, global acceptance and compliance with international standards. SIBA, along with its related regulations, continues to demonstrate the BVI’s commitment to appropriate and relevant regulations for BVI companies doing business globally. SIBA’s primary objectives are to regulate persons carrying out investment business in, from or within the BVI as well as the public issuance of securities in a non-mutual funds context to persons located in the BVI. It has abolished the Mutual Funds Act, 1996, which has been replaced with Part III of SIBA and the Mutual Funds Regulations (‘MFR’) – the latter also coming into effect on May 17th 2010 and it has also introduced a new market abuse regime covering insider dealing and market manipulation. However, it should be noted that SIBA and the MFR have not made any substantial changes to the mutual funds regime in the BVI. Investment Business SIBA regulates investment business in, from or within the BVI. It makes sure that no person can carry out investment business of any kind, unless they are licensed by the BVI Financial Services Commission (‘FSC’) to do so. The types of activity that constitute an ‘investment business’ are broadly defined in Schedule 1 of SIBA as: • Dealing in investments • Arranging investment deals • Managing investments • Providing investment advice • Providing custodial services with respect to investments • Providing administrative services with respect to investments • Operating an investment exchange Schedule 2 of SIBA provides for the exemption of certain types of investment 12 • GBM • April 2012

activities from constituting investment business. It also excuses certain persons conducting investment business, from being required to hold an investment business licence under SIBA. More importantly, SIBA covers any BVI company carrying out investment business anywhere in the world, and any person soliciting a person (including a BVI entity) in the BVI, in order to offer a service constituting investment business. For the purposes of SIBA, ‘investments’ are defined as including shares; interests in a partnership or fund; debentures; bonds; other debt instruments and derivatives; and other interests relating to such investments. Once licensed, licensees are then required to implement a number of systems and controls for their business operation. These include requirements relating to the appointment and removal of directors; capital resources; changes to ownership structures; insurance; corporate governance; segregation of client assets; advertising; and rules on corporate and other administrative necessities. SIBA is of particular relevance to people such as stockbrokers, investment managers, investment advisors, custodians and administrators. In order to assess whether SIBA applies to a particular situation, careful analysis of the regulations and the company’s business model is required. Investment Funds As of May 17th 2010, the Mutual Funds Act 1996 was abolished and replaced with Part III of SIBA, the MFR and the Public Funds Code. Notwithstanding the introduction of SIBA, the fundamental structure of the BVI mutual funds regime has not changed. In fact, in many instances SIBA has merely codified existing FSC policies. This has been extremely beneficial to persons already familiar with doing business in the BVI. Public Issues of Securities Part II of SIBA introduced a new regime to regulate any person who wishes to offer issues of securities to ‘the public’ in the BVI. However, it does not include securities issued by mutual funds or offers to ‘qualified investors’ (which includes listed companies,

FSC regulated entities, and persons having a close connection with the issuer and professional investors). Public offers that come within Part II of SIBA, must be based on a prospectus registered with the FSC, and comply with such requirements as prescribed by the FSC. Public issuers have an ongoing obligation to register any amendments or supplements to a registered prospectus with the FSC, and are required to make available a copy to every person who received the original version. Market Abuse SIBA also introduced criminal offences for BVI based individuals who carry out insider dealing, market manipulation, or make misleading statements relating to their investment business. These provisions have been put in place to bring the BVI in line with internationally accepted standards for the prevention of market abuse and similar financial crimes. To elaborate, insider dealing occurs where an insider – being a person in receipt of ‘inside information’ – deals in price-affected securities (or encourages another person to deal, or discloses the inside information to another person otherwise than in the course of employment). Committing the offences of misleading information and market manipulation, is when an individual makes a statement, promise or forecast he knows to be deceptive, dishonestly conceals any material facts, or recklessly makes a statement that is misleading, false or deceptive. Going Forward Since SIBA was incepted, several companies have already been registered in the various licence categories, but as with any new legislation, it is anticipated that there will be some changes in the future, to improve and refine some areas – namely, the current licence application process, and the introduction of possible further exemptions for niche or specialised areas. This article is for informational purposes only and should not be construed as legal advice. For further information please contact Christopher Simpson (csimpson@ onealwebster.com).

UK Benita Yu Slaughter and May Tel: +852 2901 7207 Frances Murphy benita.yu@slaughterandmay.com Tel: +44 207 090 3158 www.slaughterandmay.com frances.murphy@slaughterandmay.com

Gold for equity capital markets in 2012? All eyes turn to London this summer as it plays host to the world’s most famous sporting spectacle. It also provides a welcome opportunity for the city to remind the world why it deserves a place on centre stage in the play that is today’s globalised economy. Will it mark the return to the golden days of the global capital markets or will it be the silver lining in an otherwise cloudy year? It would be a happy coincidence for 2012 to be a triumphant year both in the capital markets and the sporting arena but for the former it will feel long overdue. Towards the end of 2010, there was cautious optimism that 2011 would be the year of recovery. By October 2011, however, any optimism had been severely dampened by the Eurozone crisis and the Chinese economy’s ‘soft landing’. Neither of these issues have, to date, satisfactorily resolved themselves. A general Eurozone recovery is probably the more likely scenario than its collapse, which may begin to tempt money into equities, but there is still uncertainty as to when this will happen. Equally, the Chinese government’s monetary policy appears to be designed to address the risk of real estate inflation but the extent to which this can be avoided is unclear. So from a global economic perspective, the key barrier to a buoyant capital market outlook, namely volatility, is still very much in evidence. The regulatory response to the financial crisis of the last few years may eventually contribute to the restoration of stability in the capital markets but, in the short term at least, is injecting more variables into the equation. For European banks and insurance companies, which will have to comply with new capital requirements, there is the prospect of equity issuance. That might

reinvigorate Europe’s capital markets (at the risk of indigestion) but there is much water still to flow before we see what will be required, and some solutions that have been canvassed (such as leaving the Eurozone) may have the opposite effect. Given that the global economic picture is still so uncertain, perhaps the more interesting question is who will benefit most from such activity as there is? Last year Hong Kong and New York shared the IPO gold medal with around US$30bn worth of IPOs each by value and 64 and 69 deals respectively. London was third but by quite some margin, seeing around US$17bn worth of IPOs, spread over 14 deals. At first glance the consolation prize for London’s IPO market would appear to be the strength in its deal values (US$1.21bn per deal, as against around US$0.4bn per deal for Hong Kong and New York). The glister is slightly dimmed when you take into account Glencore’s US$11bn IPO that was a dual Hong Kong and London listing. Excluding it from the picture changes the figures to US$0.5bn per deal for London and US$0.3bn per deal for Hong Kong which, although less dramatic, is still significant. In fact, given the pipeline of natural resources businesses expected to come to market in the near future, it would be bullish to bet against seeing more dual-listings. The advantages of an Asian listing given the focus of global commodities and natural resources consumption is clear, and London’s strong record with companies in these sectors complements this. London faces a balancing act in positioning itself to take advantage of any such pipeline. On the one hand, it will need to consolidate its position as providing a badge of quality

for companies with a listing, but on the other it will need to make itself attractive to foreign companies shopping around for a market on which to debut. FTSE recently announced that it would be raising the free float requirement for inclusion in its UK and Global series from 15% to 25%. The change will seem relatively inconsequential to European companies seeking to list; their listing model has tended to include a large free float. However, the five companies which currently do not meet the FTSE 25% threshold and have been given two years to comply with it are all in the natural resources and energy sector. Overseas companies in this sector are more likely to raise equity capital with a minimum or near minimum float, and the possibility of being permitted to do this by the UKLA (which can and does grant dispensation from its 25% threshold) but being excluded from the FTSE index will be of relevance to them when considering where to list. FTSE has also announced a consultation on governance issues for issuers with significant shareholders. This stands in contrast to moves by the HKSE in recent years to increase its attractiveness, such as introducing the joint policy with the SFC allowing foreign issuers to list in Hong Kong, provided that they offer sufficient shareholder protection, the revised regime enhancing the listing of mineral companies and the latest uplift on the standards of corporate governance. Will we start to see the beginnings of a recovery for global equity capital markets? Probably the only thing that we can say for certain is that once London’s stadiums have emptied, we should have a clearer idea of whether it will be in 2012 and, if it is, who the real winners will be.

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SWITZERLAND Baker & McKenzie Zurich Dr. Matthias Courvoisier Co-head of the Capital Markets Group of Baker & McKenzie Zurich Attorney at law / MSc in Finance (London Business School)

Holbeinstrasse 30, P.O. Box 8034 Zürich Switzerland matthias.courvoisier@bakermckenzie.com

Swiss Style – A View on Regulatory Developments of the Swiss Financial Markets Switzerland keeps government spending within limits, and unlike other countries public debt is low. Nevertheless, financial markets and equity markets in Switzerland – traditionally open to free money flows – have been heavily influenced, not only by the uncertainties of the world economy, but from the numerous proposals and projects put in place to tighten financial market regulations. Between November 2011 and March this year, the Swiss equity market’s annual volatility started to decrease from around 26% to around 14%, prompting speculation that market participants will finally be able to find common ground in equity valuations. Previously, the high uncertainty and volatility in the market were major impediments to the equity capital markets picking up speed on the takeover side and the IPO side. While this year promises to be an interesting transitory period, we hope that this glimmer of optimism will not be dampened by rigid regulatory proposals and further debt shocks. With a view to reviving the equity capital markets in Switzerland, new regulatory developments will play an increasingly important role. In the area of public takeovers, one of the envisaged major changes will be to disallow the payment of a control premium in purchases prior to the submission of a public takeover bid. This means that the public offer would have to be made at least at the highest price paid to a third-party seller during the twelve months’ period before its submission. In the lead up to the new law probably being enacted in early 2013, one chamber of the Swiss Parliament has already passed the amendment, with the other expected to do by this summer. This amendment is often viewed as a direct result of the ongoing Quadrant case, where we continue to represent a major institutional fund in its aim to obtain a substantial increase in the offer price, because of a violation of minimum price rules. The major problem highlighted by the Quadrant case 14 • GBM • April 2012

was however not the control premium, but the takeover proceedings. In the world of friendly takeovers these proceedings work smoothly with only few formalities, thereby creating an environment that supports markets for corporate control. However, in highly litigious takeover battles, Swiss takeover procedures often fail to grant the parties, including shareholders, sufficient protection, and there appears to be no attempt to improve that situation. Despite these impediments, eighteen months after the Quadrant proceedings started, we reached a first milestone, with the Swiss Federal Administrative Court’s finding that the most favourable financing granted on the part of the bidders to certain co-bidding managers, must be taken into account when determining the minimum bid price of the public offer. The case is now since more than one year back with the Swiss takeover board, which has to rule on the specific minimum price. A further major change in takeover laws is the extension of the takeover rules (together with the major shareholder reporting rules) to foreign entities with a primary listing of shares in Switzerland. This is an undisputed proposal that is likely to be put into practice in early 2013. With this change in mind, we have been advising foreign entities with a primary listing in Switzerland, on the amendments they must or should make to their articles of incorporation. In particular, listed companies may now amend their articles of incorporation to exclude the mandatory bid rules (opting-out), or to move the threshold for mandatory bids from 33 1/3% up to 49% of shareholding (opting-up). The effect of this opting-out is to also exclude the minimum price rules in public takeovers. We recommend such changes should be made at the earliest opportunity before the new rules enter into force. SIX Swiss Exchange is not only operating the major stock exchange in Switzerland but is to a large extent fulfilling the function of the regulatory body – a regime that we

expect will continue. SIX Swiss Exchange treats listed companies and candidates for listing as customers, rather than suppliants. It’s having a customer-oriented approach – along with the ability to keep procedures and rules comprehensive and easy to implement –gives the stock exchange in Switzerland a competitive advantage. The flipside of all this customer orientation is the relative weakness of the shareholders’ and other market participants’ position. It goes without saying that there are laws in place against insider trading and market manipulation. There are also rules to ensure proper reporting. This is being reinforced by giving Swiss Financial Market Supervisory Authority (FINMA) new powers to sanction violations of major shareholder reporting, insider trading, market manipulation, and non-compliance with mandatory bid rules. All of this will lead to extending the power of FINMA to confiscate funds. Unfortunately, giving more power to a regulator that has limited resources to cope with all its tasks is not useful and will not improve the protection of any of the market participants. In fact from our experience, litigious cases are not always handled according to the rule of law and with proper procedure. It therefore seems likely that the financial market regulator will be forced to limit its enforcement activities to selected matters, which will result in unequal treatment. The discussed new rules will certainly give shareholders and listed companies some more scope to protect themselves, but the legislator has again failed to effectively empower market participants to protect themselves, instead the burden was put on FINMA only. This short overview looks at the advantages and disadvantages of doing it ‘Swiss style’. Enforcement could be improved by recognising that market participants should be given the appropriate means to protect their financial sources, their business and their investments.

AUSTRALIA & CHINA King &Wood Mallesons www.kwm.com Nicola Wakefield Evans Partner Tel: +61 2 9296 2348 nicola.wakefield.evans@au.kwm.com

Jo Thanyakittikul Senior Associate Tel: +61 2 9296 2058 jo.thanyakittikul@au.kwm.com

Tapping into the Asian market Hong Kong and Singapore are attractive capital raising destinations for international companies looking to tap into the Asian market, and the future launch of the International Board on the Shanghai Stock Exchange is eagerly anticipated by companies and investors alike. In order to manage listing and post-listing compliance costs, companies that are already listed on another stock exchange should undertake a comparative analysis between the requirements of their current stock exchange and those that they will be required to adopt post-listing under the regime of the local Asian bourse – whichever one that may be. Hong Kong Unlike some other stock exchanges such as the Australian Securities Exchange, listings on the Hong Kong Stock Exchange (HKSE) are undertaken in a pre-vetting environment. There are a number of requirements that will be imposed by the HKSE, which should be addressed early so as to minimise their impact on the listing timetable and on postlisting compliance costs. A comparative analysis will assist in determining whether appropriate waivers should be sought from the HKSE and the Securities and Futures Commission (SFC). The listing timetable should take into account the time required for a reporting accountant to report on the company’s last three audited financial statements. The reporting accountant, who is to be engaged by the company, must be a certified public accountant qualified under the Hong Kong Professional Accountants Ordinance (subject to a waiver being granted) and its report must be included in the prospectus. The listing timetable should also take into account the requirement that the latest audited accounts must not be more than six months old.

If a company releases interim unaudited results in accordance with the rules of another exchange (while preparing for its listing on the HKSE), it must include that information in its prospectus. That information must be reviewed by an independent auditor and a copy of the auditor’s report must be included in the prospectus. Once the company is listed, shareholders who are interested in 5% or more of any class of voting shares will be required to disclose their interests, and short positions, in those shares under Part XV of the Securities and Futures Ordinance. Directors and CEOs (and their respective spouses and children) will be required to disclose any interests, and short positions, in any shares and debentures in the company (or any of its associated companies). The company will have an obligation to maintain a register of shareholders’ interests and directors’ interests. A company that is seeking a secondary listing may apply to the SFC in certain circumstances for an exemption from these obligations. The HKSE prescribes the information that is to be included in a company’s annual and interim reports which may impact on post-listing compliance costs, particularly for companies that are already listed elsewhere. Banking companies will also need to comply with the Banking (Disclosure) Rules issued by the Hong Kong Monetary Authority, in terms of content requirements for their prospectus, interim reports and annual reports. A comparative analysis undertaken as part of a company’s listing process may save the company on post-compliance costs later on. A company that has its primary listing on the HKSE will be required to comply with the Takeovers Code and the Code on Share Repurchases (Codes). A company with a secondary listing on the HKSE may still be subject to the Codes if the SFC determines

that it is a ‘public company’ in Hong Kong. Accordingly, companies looking at a secondary listing could be subject to the takeovers regime in Hong Kong as well as that of its home jurisdiction, and should therefore consider whether a waiver from the SFC should be requested. In determining whether a waiver will be granted, the SFC takes into account economic and commercial factors including (but not limited to) the number of Hong Kong shareholders, the extent of share trading in Hong Kong, the location of the company’s business and assets, and any protections that would available to Hong Kong shareholders through the laws of the company’s home jurisdiction. Companies should be aware that accelerated non-traditional rights issue structures, such as those that have developed in the Australian market, are not currently permitted under the HKSE listing rules, and they should consult with the HKSE on such matters as part of their listing process. Shanghai It is expected that the future launch of the International Board on the Shanghai Stock Exchange (SSE) will allow non-PRC companies to make public offerings in the PRC of new shares or depositary receipts that are denominated in RMB and traded in RMB. While rules for the International Board are not yet publicly available, it is anticipated that the qualifications for listing that will apply to non-PRC companies will be separate from those that currently apply to listings by PRC companies. Financial criteria are likely to be applied but what those thresholds will be remains to be seen. A concrete date for the opening of the International Board has not yet been announced, but there is a possibility that it may take two to three years, given the changes in leadership in the PRC and in the China Securities Regulatory Commission. April 2012 • GBM • 15

GLoBaL CapitaL MarKetS report 2012

INDONESIA Kartini Muljadi (Mrs) Senior Partner kartini.muljadi@kmuljadilaw.com Phone: + 6221 7279 4535

Jalan Gunawarman No. 18 Kebayoran Baru Jakarta 12110 Indonesia

New Financial Services Authority Kartini Muljadi Senior Partner Kartini Muljadi & Rekan The regulatory authority currently responsible for supervision of capital market activities in Indonesia is Bapepam-LK (Badan Pengawas Pasar Modal dan Lembaga Keuangan). This will change on 31 December 2012. In October last year, Indonesia’s House of Representatives passed Law Number 21 of 2011, which has established a new Financial Services Authority (Otoritas Jasa Keuangan) (“FSA”). The FSA will serve to regulate and supervise activities in the financial sector (including banking and insurance) and the capital market, and will assume regulatory and supervisory authorities currently being exercised by Bank Indonesia (with effect from 31 December 2013) and, with effect from 31 December 2012, Bapepam-LK. Until then, companies in the financial sector will continue to be supervised by Bank Indonesia or Bapepam-LK and be subject to their rules. For public listed companies, the rules of the Indonesian Stock Exchange and Bapepam-LK also apply. New rules on material transactions for public companies Bapepam-LK issued new rules on material 16 • GBM • April 2012

transactions for public companies in November last year. The new rules, as set forth in Regulation IX.E.2 attached to Decree of the Chairman of Bapepem-LK No. KEP-614/BL/2011, replace Regulation IX.E.2 attached to Decree of the Chairman of Bapepam-LK No. KEP-413/BL/2009 (the “old rules”). The principal change is the definition of material transaction. The new rules define a material transaction as any (a) participation in a business entity (which would include a company), project or business activities, (b) purchase, sale, transfer or exchange of assets or business segment, (c) leasing in or out of assets, (d) lending or borrowing, (e) encumbrance of assets, or (f) guarantee, having a value of 20% or more of the public company’s equity (whether in a single transaction or series of transactions). The definition of material transaction in the old rules specifically referred to the acquisition or disposal of shares. This is absent from the new rules. However, the definition of material transaction in the new rules includes the purchase, sale, transfer or exchange of assets, which would seem to be broad enough to capture the purchase or sale of shares. Material transactions with a value of more than 50% of equity must be independently appraised, approved by a General Meeting

of Shareholders and publicly announced. Transactions with a value of between 20% and 50% do not require the approval of a General Meeting of Shareholders (unless this is required under the company’s Articles of Association), but must be publicly announced in accordance with the new rules. There are certain exemptions, including for transactions between a public company and a subsidiary in which the public company holds at least 99% of the shares, loans from banks, venture capital companies or financing companies, and transactions which form part of the public companies core business activities. Kartini Muljadi & Rekan Kartini Muljadi & Rekan is one of Indonesia’s law firms established since 1990. M&A, banking and finance and capital markets (debt and equity) are among its core practice areas. The firm’s attorneys include accredited capital market specialists, and the firm regularly advises on debt and equity issuances, as well as advising a large number of public listed clients on compliance with the regulatory requirements of Bapepam-LK and the Indonesian Stock Exchange.

NYSE EuroNExt –

HELPING COMPANIES KEEP UP WITH A CHANGING WORLD NYSE EURONEXT IS ONE OF THE LEADING FINANCIAL MARKET OPERATORS IN THE WORLD, WITH EXCHANGES IN THE UNITED STATES AND EUROPE: THE NEW YORK STOCK EXCHANGE, NYSE EURONEXT, NYSE AMEX AND NYSE ALTERNEXT. THESE EXCHANGES CATER TO COMPANIES OF ALL SIZES AND FROM ALL SECTORS. NYSE EURONEXT IS THE WORLD’S MOST LIQUID STOCK EXCHANGE GROUP, HANDLING OVER ONE-THIRD OF GLOBAL TRANSACTION VOLUMES. FROM THE OUTSET OF THEIR LISTING, COMPANIES GAIN ACCESS TO A SECURE MARKET, STATE-OF-THE-ART TECHNOLOGY, MADE-TO-MEASURE ADVICE AND THE WORLD’S BROADEST INVESTOR BASE. IN 2005, TO OFFER EUROPEAN SMALL AND MID-SIZED COMPANIES ADDITIONAL FINANCING OPTIONS AND ACCELERATE GROWTH, NYSE EURONEXT CREATED A MARKET TAILORED TO SMALL AND MID CAPS – NYSE ALTERNEXT – WHICH MET WITH IMMEDIATE SUCCESS. NYSE EURONEXT OFFERS LISTED COMPANIES HIGH VALUE-ADDED ADVICE ON HOW TO RAISE FINANCING ON ITS EXCHANGES. IT ALSO PROVIDES A HOST OF SERVICES, INCLUDING EXPERTLINE (AN INTERACTIVE PLATFORM BASED IN THE CENTRALISED EUROPEAN MARKET SURVEILLANCE ROOM), A DEDICATED WEBSITE, A QUARTERLY NEWSLETTER (LISTINGS EXCHANGE) AND TRAINING IN BEST PRACTICES THROUGH FREQUENT REGULATORY AND FUNCTIONAL WORKSHOPS.

NYSE EuroNExt NYSE ALtErNExt NYSE NYSE AMEx Welcome to the exchanging world of NYSE Euronext. http://europeanequities.nyx.com MyQuestion@nyx.com

©2012 NYSE Euronext. All rights reserved. No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior written consent of NYSE Euronext. NYSE Euronext and its affiliates do not recommend or make any representation as to possible benefits from any securities or investments, or third-party products or services. Investors should undertake their own due diligence regarding securities and investment practices. This material may contain forward-looking statements regarding NYSE Euronext and its affiliates that are based on the current beliefs and expectations of management, are subject to significant risks and uncertainties, and which may differ from actual results.

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UNITED KINGDOM

Mark Florman: Chief Executive, British Private Equity & Venture Capital Association It is very easy in such uncertain economic times for those in the investment community to pull in their oars and wait for calmer waters. With the ongoing eurozone crisis, the threat of recession hanging over many European countries and the increasing wave of regulation, this is an understandable position. But it would also be a mistake. Home to more than 800 million people and 20 million small and medium-sized businesses, Europe has countless high-growth, high-potential business spread throughout fragmented market sectors. Combine this with low company valuations and the imminent deleveraging of the Continent’s investment banks, and it becomes clear that the problems currently facing Europe should not cloud the reality that this is a region which remains a very attractive place to invest. Whilst there will doubtless be challenges ahead, there are opportunities too, particularly for private equity and venture capital. In fact, historical evidence shows that market volatility has actually resulted in superior fund performance. The BVCA’s own research reports that funds established in 1994 and 2004, both periods of recovery after an economic downturn, are the best performing vintages in British private equity history. This underlines a crucial characteristic of private equity, namely its ability to not just weather economic shocks but actually prosper. Its long-term approach is one of the reasons why investors have consistently committed to the asset class and why it will remain a key feature of any investment strategy. As well as being good for investors, private equity is also good for business. With continued credit constraints and the difficulties securing debt financing, especially for SMEs, there is a huge need equity financing. Governments support it. Companies need it. And where the more traditional areas of funding have been exhausted, private equity can fill the gap. European private equity and venture capital firms invested €43bn into over 5,000 companies in 2010, whilst funds raised €20bn from investors. In the UK, around 4,700 companies are backed by the industry worldwide, employing around 1.6 million people on a full-time equivalent basis across the world. In 2010 alone UK funds

invested £20.4bn globally, up from £12.6bn in 2009, backing almost 1,000 companies. Many of these companies are household names - the likes of the AA, Boots, Pizza Express - but even more are the SMEs which form the backbone of the British and global economy. In 2010, 85% of UK companies that received private equity or venture capital investment were small or medium-sized businesses. It is an industry which already has a positive impact on European economies and one which European government and regulators cannot afford to stifle by inappropriate regulation which fails to take into account the nature, character and abilities of alternative investment funds. The BVCA, together with its international partners, continues to negotiate with the EU and other supranational bodies on a range of policy issues. This has the potential to stifle private equity’s ability to raise capital and invest it, from the Alternative Investment Fund Managers Directive and Solvency II, to Basel III, the EU Pensions Directive and the G20’s proposals on shadow banking. All of these pieces of regulation stem from a lack of understanding by politicians, civil servants and regulators of the true nature of private equity. It is now up to the industry, including the BVCA, to explain itself better to those stakeholders and demonstrate its role in the real economy. One great example is private equity’s involvement in Crown Paints, the second biggest paint business in Britain. In 2008 Crown Paints was bought by Endless Private Equity. At that time the business was losing money and there was no other buyer. If the company had failed to find new investment 1,300 jobs would have been lost. In just a few short years Endless turned the business around. There was a £35m improvement in profitability and market share grew from 16% to 19%. There was a £10m plus investment program in factory upgrades and IT systems, accompanied by extra investment in key brands. Exports grew by 40% and its UK and Irish store network expanded to 135 outlets. In June 2011, Endless successfully sold the business to Hempel, a world leading paint manufacturer based in Denmark. As well as supporting more established businesses, the industry is also a key funder of new ones. The future of both the UK and EU economies on the global stage, hinges on the ability to foster innovation, commercialise technology and encourage investment in early stage and fast-growing companies. The fundamentals are already here. The EU produces more science and technology graduates than either the United States or Japan, resulting in worldclass technology, cutting-edge innovation and serial entrepreneurs who are building market-leading companies to take on the world. What is now needed is a genuine innovation eco-system supported by a truly supportive regulatory framework. Skype, Autonomy, Lovefilm and even Vodafone: venture capital has been key in the development of all them, and to ensure Europe maintains and enhances its position on the global stage, we need to back enterprise

and improve access to finance for Europe’s entrepreneurs. And the industry brings more than just funding and operational expertise to the table. Responsible investment is now a key performance indicator for many businesses across the world and one which private equity has embraced. BVCA research published in November 2011 revealed that over 60% of private equity and venture capital firms surveyed now have environment, social and corporate governance (ESG) policies and/or principles in place within their firms up from just 24% in 2009. The study, of around 80 senior professionals in UK private equity and venture capital houses, also showed that 64% thought that active management of sustainability issues made a company more attractive to investors, and 54% of survey respondents agreed that sustainability management would generate greater shareholder value over the long term. These findings were supported by another report, this time carried out by Doughty Hanson, the World Wildlife Foundation and PwC, which showed that the integration of ESG risks and opportunities into investment decisions and management of assets is key to building stronger, more profitable companies. Such an approach is becomingly increasingly important as private equity becomes global in nature with growing appetite for investment in the emerging markets. According to the Emerging Markets Private Equity Association (EMPEA) US$32.3bn was raised for private equity funds targeting the developing economies in the first three quarters of 2011, up from the US$23.5bn in all of 2010. In that time, Emerging Asia raised US$23.7bn, an increase of 167% on 2010, and Brazil reached a record US$4.5bn, surpassing the 2008 peak of US$3.6bn and a 400% increase over the prior year. As well as investor appetite, there is a realisation in developing economies of the beneficial effects increased private sector investment can have as a catalyst for growth, by creating jobs, driving economic growth and building better, sustainable businesses. The positive impact private equity and venture capital can have on the fortunes of companies across the world has been demonstrated time and again. Indeed, a report published by the Centre for Management Buy-out Research (CMBOR) and the Credit Management Research Centre in March 2011, showed that not only did private equity-backed companies outperform both listed and non-listed businesses in recent years, but the outperformance was even more pronounced during the last recession than before it. The challenge now is to ensure this message - that private equity is good for business, good for the economy and good for investors - is heard at all levels, from policy-makers and entrepreneurs, to CEOs, regulators and investors. The industry needs to become part of the mainstream of economic and social life. The industry as a whole must take every opportunity to spell out exactly what it is we do and how we do it. We make businesses better, we support entrepreneurs, we fund innovation and we create jobs. In short, we fund the future.

BVCA, 1st Floor North, Brettenham House, Lancaster Place, London, WC2E 7EN | T: +44(0)20 7420 1800 | F: +44(0)20 7420 1801 E: bvca@bvca.co.uk | www.bvca.co.uk | Twitter: @BVCA Potential clients contact: Leon de Bono, Director, Commercial Development +44(0)20 7420 1853 | ldebono@bvca.co.uk

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Into Africa Things are hotting up in Africa as the investment climate becomes more inviting, both to Africans and outside investors. Indeed, according to George Soros, Africa is "one of the few bright spots on the gloomy global economic horizon". In the past many Western investors have viewed Africa as simply too high risk: perceived as a potentially volatile cocktail of political and economic turbulence, shaken with climatic/geographic challenges, with a twist of corruption risk. However, for an increasing number of African countries, this investor reticence is rapidly dissipating in the face of opportunity and an improved investment landscape. It has been some time since only bad news was broadcast about Africa. In fact, since the credit crunch, some of the highest economic growth rates in the world have been found in African countries and the continent is increasingly being seen as a serious long-term investment opportunity by international investors. In the last 10 years, six of the top ten fastest-growing economies have been in sub- Saharan African and many commentators predict that this trend will continue. Average GDP growth rates in sub Saharan Africa for 2011 have been estimated as over 5%, with certain counties, such as Nigeria, significantly higher that that (estimated as having GDP growth of between 7.3 and 7.8% in 2011). Africa's recent successes have been attributed to the surge in prices of the natural resources with which Africa has been blessed, and the appetite of emerging nations such as Brazil and China to access them. Yet this is only part of the story. Improved political and macroeconomic stability and microeconomic reforms in many countries have led to growth in other sectors including, banking and finance, retail, agriculture, transportation and telecommunications. There are also initiatives to improve infrastructure, update legislation and regulation in core areas and promote corporate governance programs. There has been a surge of private investment inflows from the African diaspora, and from global and Africabased major corporates, banks and investment houses and Western investors from the US, UK and continental Europe who previously disregarded the African continent as an unpromising and high risk landscape are now reassessing. As a result, a new “scramble for Africa” is underway.

This time however, the rules are being redrawn. Several countries within the continent are proactively adopting initiatives to seek to ensure that, whilst welcoming outside investment into Africa, programmes are put in place to encourage indigenous ownership and provide in-country job creation and training, so that the local population share in the benefits of the investment. Structuring and documenting the strategic equity and debt investments, joint ventures and acquisition activity to appropriately capture the commercial relationship between the parties is important in any inward investment or cross border transaction. London and Paris are often key conduits for cross – border investment into Anglophone and Francophone Africa, in part arising from their historical colonial links with large parts of the continent. Consequently the legal systems of many countries in the continent have roots in English common law or the French civil system. Working closely with key local legal counsel in the relevant jurisdictions, Winston and Strawn London and Paris offices have had the privilege of working with a number of African-based clients to provide legal advice on projects and transactions over the past decade, in various industries including oil and gas, renewable energy, construction and agricultural/forestry, in addition to assisting with a number of pro bono projects. The legal documentation for these transactions is full form and consistent with international cross border expectations. Our experience includes advising indigenous African entities who are expanding in markets that have traditionally been occupied by larger multinational entities. By way of example, Winston & Strawn’s London office were delighted to have the opportunity to represent an indigenous Nigerian company, in connection with the financing and acquisition of oil mining leases from Shell Oil, TOTAL and Eni, in line with the Nigerian government’s initiatives to encourage local ownership in key areas of its economy. Similar initiatives are also under way in Angola and in newer resource-rich countries such as Ghana and Uganda. Such regulatory reform can only help to increase both local and international investor confidence in the continent which is key in ensuring the continued growth of African economies.

Zoe Ashcroft is an English qualified partner and Head of the Corporate Department of Winston & Strawn, London. Norah Mugambi is an associate at Winston & Strawn qualified in Kenya, New York and England and Wales.

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Doing Private Equity Deals after AIFMD It is now less than 18 months until the EU Alternative Investment Fund Managers Directive (AIFMD) comes into effect, and private equity firms are beginning to grapple with the likely ramifications. At present, affected firms are mainly focussing on the internal compliance consequences, but the new regime will also have implications for firms’ investment activities. From July 2013, EU-based firms authorised under the AIFMD, and non-EU firms who market funds to EU-based investors under the AIFMD regime, will be subject to information disclosure requirements and anti-asset stripping rules when making investments into EU companies (other than SMEs). The political rationale for the disclosure rules is that target companies and their employees, and also regulators, should receive certain basic information from fund managers to enable them to assess how being private equity owned will impact the company’s situation. The anti-asset stripping provisions are designed to address the concern expressed by some EU politicians that, as one leading politician put it, private equity firms see companies simply as a class of asset rather than as people-based organisations rooted in local culture and community. The basic notification requirement is triggered when a private equity fund acquires, holds or disposes of, a substantial stake in an unlisted EU company. The fund manager must inform the relevant regulator, whenever the fund’s share of voting rights reaches, exceeds or falls below 10%, 20%, 30%, 50% or 75%. Where the fund acquires control, the fund manager must make more extensive notifications: it must notify the company, the company’s shareholders and the regulator of the identity of the fund and the fund manager, the date on which control was acquired and the resulting situation in terms of voting rights. The fund manager must also ensure this information is passed on to the company’s employees. Where a fund acquires control of either a listed or unlisted EU company (for listed companies, control means the Takeovers Directive threshold, typically 30% of voting rights; for unlisted companies, it means majority control, being more than 50% of voting rights), more substantive disclosure requirements apply. The firm must disclose the firm’s conflicts policy (including, in particular, the safeguards put in place by the firm to ensure that any agreement between the fund or fund manager and the company is on arm’s length terms) and the firm’s policy for communicating with employees. For unlisted companies, the disclosure made to the company and its shareholders (and indirectly to employees) must also include the firm’s intentions with regard to the future business of the company, the likely repercussions for employment overall and any proposed changes to conditions of employment. The disclosure to the regulator must include information on the financing of the acquisition, to enable regulators to monitor firms’ use of leverage.

Finally, there are annual reporting requirements for unlisted companies (listed companies being subject to annual reporting requirements in any case). Firms must prepare a narrative report, including a fair review of the development of the portfolio company’s business as at year end, giving an indication of any important subsequent events, the company’s likely future development and information about any share buybacks. Firms subject to these disclosure requirements will be required under other provisions of the AIFMD to produce an annual report for each of their funds, so firms have the option to disclose this information in the portfolio company’s own annual report or in the annual report of the fund itself (in which case the firm must ensure that the information is passed on to employees). Although these transparency requirements create an additional administrative burden, and for some will go against the notion of ‘private’ equity, it is unlikely that they will have any significant impact on how, or whether, deals are done. The anti-asset stripping provisions, on the other hand, are meant to change the way in which some firms approach acquisitions, although it is questionable how much the new rules really add to existing capital maintenance requirements. For a two-year period after acquiring control of an EU portfolio company, the AIFMD prohibits fund managers from mandating or facilitating any dividend, share buyback or capital reduction if the portfolio company’s assets are, or following the distribution would be, lower than the aggregate of its share capital and undistributable reserves as shown in the most recent annual accounts, or if the amount paid out to shareholders would exceed the company’s accumulated net profits. However, the provisions are not clearly drafted, and much will depend on how individual EU countries choose to implement the new rules. National implementation will also determine the extent to which, if at all, these new provisions put firms operating under the AIFMD regime at a competitive disadvantage relative to other prospective purchasers such as corporate buyers, or even other funds that are outside the AIFMD (such as non-EU funds that are managed outside the EU and are not marketed to EU-based investors). As a strict legal matter, the anti-asset stripping provisions only have to be applied to those fund managers within scope, but the EU is asking national legislators to take account of the purpose of the provisions and the need for a level playing field when implementing the AIFMD into national law; the extent to which they will do so remains to be seen. Stephanie Biggs and Lisa Cawley are financial services partners in the London office of Kirkland & Ellis International LLP. Stephanie is a member of the BVCA’s Legal & Technical Committee.

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Resolving workplace disputes in the UK, or creating them? UK employers and business groups often criticise the UK’s employment law regime for being inflexible and heavy on the ‘red tape’. Many of the governing principles derive from EU law and are implemented through domestic legislation, which is then interpreted by the UK Employment Tribunal (the ‘Tribunal’) and Courts. Investors in the UK may be interested to learn of the wide-reaching reforms to employment law announced by the UK Government at the end of 2011. We look at whether key proposals will stack up in practice, or potentially create as many workplace disputes as they aim to resolve. Unfair dismissal qualifying period to increase A UK employee who commences employment on or after 6 April 2012 will be required to have two years' qualifying service (rather than one year, as is currently the case) to bring an unfair dismissal claim. On the face of it, most UK employers will welcome this change to the law. There are obvious benefits to having a two-year period in which to assess whether the employment relationship is working or not. However, a more worrying side effect could be that employees who are dismissed during the initial two year period seek protection elsewhere. For example, there could be an increase in assertions of dismissal for a discriminatory reason, or because an employee has ‘blown the whistle’ on the employer’s unlawful practices. Such claims are particularly attractive to employees because there is no length of service requirement and there is the potential for uncapped damages (unlike for an unfair dismissal claim, where there is a limit on compensation). Unfortunately for UK employers, both discrimination and whistleblowing claims can be particularly complex to defend, often requiring large financial and time commitments. The implications of the increase in unfair dismissal qualifying period therefore remain to be seen. Tribunal costs Unlike in the civil Courts, where legal costs are generally recoverable from the unsuccessful party, the Tribunal has limited discretion to award costs and an award against an employee is still the exception rather than the rule. At present, any costs claim in excess of £10,000 must be brought in the County Court. However, with effect from 6 April 2012, the limit for Tribunal costs orders will increase from £10,000 to £20,000. The prospect of the Tribunal deciding that an employee is on the hook for up to £20,000 of their employer’s costs could be

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daunting, and the increase may encourage employees to focus on the merits of the claim at an earlier stage. Financial penalties To the dismay of UK employers, the proposal to introduce a financial penalty system has been confirmed. Broadly, a Tribunal will have the discretion to impose a fine equating to half of the total award payable to the employee, with a lower cap of £100 and (thankfully) an upper cap of £5,000. The fine will be payable to the UK Exchequer and will be reduced by half if paid within 21 days. Although not an exorbitant amount, the concept of an additional penalty on top of any compensation payment to an employee will be unwelcome. However, a financial penalty will not be automatic, but instead will be at the Tribunal’s discretion, based on the extent of any bad behaviour (such as the employer’s negligence or malice). The risk of aggrieved employees using such penalties as negotiating leverage will be limited, not least because the penalty will not be payable directly to the employee. Protected conversations A consultation will be launched on introducing ‘protected conversations’, which are aimed at employers and employees having frank discussions about work-related issues (such as underperformance and/or retirement), safe in the knowledge that the contents cannot be referred to in any Tribunal proceedings. At present, a valid without prejudice (or ‘off the record’) discussion can only take place where there is genuine attempt to settle an existing dispute. There will be no such requirement for a ‘protected conversation’. However, the ability to approach an employee off the record at an earlier stage does not necessarily reduce the chance of an employee raising a grievance and/or bringing a Tribunal claim. Any such conversations will still be highly sensitive, both in relation to content and timing, and discriminatory comments by an employer will not be protected. It seems fairly inevitable that ‘protected conversations’ will provide fertile ground for future disputes. Tribunal fees A consultation has been launched in relation to two options for the introduction of Tribunal fees. Broadly, the first option involves a one-off fee (up to £1,750) dependent on the value of the claim, whereas the second involves an issue fee (up to £250), followed by a listing fee (up to £1,250) depending on the type of claim. It is envisaged that the employer will have to reimburse the fees paid by a successful employee, on top of any compensation payable and potentially any penalty, as mentioned above. The future In addition to the above, the entire Tribunal system will be reviewed in 2012. Consultations will also be launched on reducing the UK's collective redundancy consultation period, and whether the UK’s transfer of undertakings legislation ‘gold-plates’ the requirements of EU law. The one point of certainty is that UK employers are set for a busy few years ahead.

“a firm that carries the hallmark of quality” Chambers uk

UK Law Firm of the Year Global Law Experts Awards 2011

www.traverssmith.com April 2012 • GBM • 23

SuCCeSS StorieS - riCHard BranSon

Success Stories Richard Branson, according to the Forbes, is the 4th richest person in the United Kingdom with an estimated net worth of over $4.2 billion as of 2011. Branson (born July 18, 1950) began this accumulation of wealth at the early age of 16 when he began publishing a magazine named Student. The Student Magazine, somewhat eerily, was run out of the crypt of an old church and in 1970 he began using the magazine as an advertisement vehicle to sell mail-order records for considerably less than local retailers at the time. The venture was an overnight success that soon became branded as “Virgin,” at the suggestion of one of Branson’s early employees— as they were all new to the business. The Virgin moniker has stuck through most of Branson’s business ventures to this day. In early 1972 Branson started a record shop on Oxford Street in London. Later that year he expanded the venture to a chain of record stores called Virgin Records, later to be known as Virgin Megastores. Virgin Megastores generated enough income in its first year of operation that Branson was able to purchase a country estate in which he installed a recording studio. From this property he then launched the record label Virgin Records with Nik Powell. The entrepreneurs leased studio time to up and coming artists in the area and in 1973 Virgin Records' first release became a chart-topping best-seller. The album was the debut release “Tubular Bells” from multi-instrumentalist Mike 24 • GBM • April 2012

Richard Branson

Oldfield. Richard Branson then embarked on a quest to turn the controversial into cash. Virgin Records signed on controversial bands other record companies were afraid to touch such as the Sex Pistols, Faust and Can as well as the Culture Club to name a few. In the early 1980s Branson took the controversial card one step further with his purchase of the gay nightclub “Heaven” and his first, as well as only, attempt at record production-- the novelty record "Baa, Baa, Black Sheep", by Singing Sheep. The single was recorded with a percussion machine along with a recording of a series of sheep baaing. Believe it or not, the single actually came in at number 42 on the charts in 1982. This is not to say everything Richard Branson delved in was controversial in that time period. Branson also formed Virgin Atlantic Airways in 1984 and during the remainder of the decade the Virgin brand grew rapidly through both the record label and the airways. Writing in his autobiography in relation to his airline venture Branson wrote “My interest in life comes from setting myself huge, apparently unachievable challenges and trying to rise above them...from the perspective of wanting to live life to the full, I felt that I had to attempt it.” To keep Virgin Atlantic Airways going, in 1992 Branson had to sell the Virgin label to EMI for £500 million. He was quite saddened by the sale because Virgin Records had been the foundation on

which his other ventures had grown. Once Virgin Atlantic Airways was solvent again, Branson formed V2 Records to re-enter the music business. This decade also marks the beginning of the diversification process for the Virgin Group of companies. The first step in the process was an expansion of his transportation holdings. In 1993, Branson entered the railway business with the formation of Virgin Trains. Virgin Trains quickly won the contracts for the former Intercity West Coast and Cross-Country sectors of British Rail. In 1996, Richard Branson began diversifying geographically when he acquired European shorthaul airline Euro Belgian Airlines and renamed it Virgin Express. Later, in 2006 to be exact, Virgin Express would merge with SN Brussels Airlines forming Brussels Airlines and Branson would also start a national airline based in Nigeria-- Virgin Nigeria. In 2007, Virgin America would begin flying out of San Francisco International Airport. In 1999 Richard Branson launched Virgin Mobile, his first venture into the communication industry, and a quite successful one at that. This is not to say every venture was successful, Virgin Cola brand and Virgin Vodka brand were two undertakings of the time period that couldn’t get off the ground, so to speak. The last addition to the process took place in the year 2000 with the development of Virgin Blue in Australia-now called Virgin Australia. Never afraid to try something “a little off” (or controversial

for that matter) Branson announced a deal in 2004 involving a new space tourism company, Virgin Galactic. In partnership with Microsoft co-Founder Paul Allen and designed by American aeronautical engineer Burt Rutan the

“with an estimated net worth of over $4.2 billion as of 2011” space tourism company will take paying passengers into suborbital space for $200,000 a pop. Richard Branson next venture is a little more down to earth in the form of alternative fuels or Virgin Fuels. Branson once a skeptic of global warming

and climate change was convinced differently after breakfasting with Al Gore. Virgin Fuels will be offering a revolutionary, cheaper fuel for automobiles and in the near future aircraft, to exploit the inevitable rise in fossil fuels and combat

global warming. In 2006, Richard Branson said he plans to invest the profits from both Virgin Atlantic and Virgin Trains into research for environmentally friendly fuels, an amount that is estimated to be more than $3 billion. Will these

two ventures pay off for Branson?—or is someone trying to pull the wool over our eyes. That is a matter of controversy that only the future can tell. But then sometimes controversy pays off very well, in fact you could build an empire on it.

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Mergers acquisitions

“

Middle Market Rules

“

Today the public company is in trouble: the organisation that has been at the heart of capitalism for the past 150 years faces a loss of confidence in its Anglo-Saxon heartland and the rise of powerful challenges abroad. The number of companies listed on the major American stock exchanges has been declining relentlessly in recent years, from a peak of just over 7,000 in 1997 to just over 4,000 now.”

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(The Economist: The World in 2012.)

While the larger publicly traded companies dwindle in number because of regulatory and other costs, the influence of the middle market private business sector in America is staggering. Virtually ignored by academia and the media, this vitally important sector is one of the most important drivers of America’s economy and yet it flies largely under the radar. Accounting for a third of private sector GDP and jobs, it has been growing in the face of the past four difficult years of ‘the great recession’. If the U.S. Middle Market were a country, its GDP would rank it as the fourth-largest economy in the world, just behind Japan’s. Clearly then, there is a need to better understand this important market sector and provide it with the level of support, attention, and advocacy it merits. “Results from this largest study ever of the U.S. middle market show this business segment is the nation’s surest bet for economic recovery. The study, a survey of more than 2,000 business leaders and analysis of economic data, defined this segment between small and big business, surprisingly resilient throughout the economic crisis.” (GE Capital 2011: National Middle Market Summit The Market that Moves America Insights, Perspectives, and Opportunities from Middle Market Companies: GE Capital

& The Ohio State University’s Fisher College of Business.) However, meaningful information about these middle market private companies can be incredibly hard to locate. They are not regulated by the federal government and thus, in most cases, are not required to regularly file with the Securities and Exchange Commission. The mergers and acquisitions marketplace for these companies is somewhat chaotic, highly fragmented, and often fails to capture any substantial efficiency in scale, particularly at the lower end of the middle market with private companies valued at less than $150,000,000. Role of middle market M&A Advisors in the economy M&A Advisors provides essential liquidity to small and private businesses in America. Large businesses have the option of going public to seek growth capital and get liquidity to their entrepreneurial efforts. However, access to public market capital and liquidity options is not available to small and mid-size companies. Also, entrepreneurs by nature are creative and free-spirited. Not all are motivated to go public or want to face the scrutiny of external oversight. They rely upon the services of intermediaries for capital access and liquidity. The M&A Advisor facilitates that liquidity by creating a market for each transaction and managing the actual exchange process. Often without significant regard for the very special personal financial planning needs of the private company owner, this market has been served by numerous advisors and intermediaries, ranging from accountants and management consultants – to investment bankers - to small business brokers. Unfortunately, some of these various market participants are less than fully qualified or reputable. Investment bankers tend to concentrate on the larger deals only and may take on a middle-market business client only as an accommodation or ‘fill in’ activity. For reasons of economics, they primarily focus on servicing publicly traded companies and financing engagements, rather than the ‘full service’ business and personal financial advisory needs of small to mid-sized private business clients. Because of these current market realities, often many business owners lack access to a knowledgeable and trustworthy M&A advisor. A very large part of America's wealth lies with these private, family-owned businesses. 7.5 million of the 25 million businesses in the United States have one or more employees. The larger companies of this sector, with 50 or more employees, represent the primary middle-market. Over 90% of all business enterprises in North America and the majority of businesses internationally are family-owned. Post-World War II

entrepreneurs, having built this great wealth are at the age when they must decide the manner in which to transfer accumulated wealth, secured primarily in the value of their family businesses. In the next five years, 39% of family-owned firms will experience a change in leadership due to retirement or semi-retirement. According to a recent national survey, 25% of senior generation family business shareholders have not completed any estate planning, other than writing a will; 81% want the business to stay in the family; and 20% are not confident of the next generation’s commitment to their business. The cumulative effect of this landmark ‘succession event’ will be the largest intergenerational transfer of wealth in U.S. history. Cornell economist Robert Avery estimates that approximately $10.4 trillion of net worth will be transferred by the year 2040, with $4.8 trillion being transferred in the next 20 years. The highly fragmented marketplace for financial advisory and transaction services offers a very opportunistic scenario for future economic growth and profitability. With the growing numbers of small businesses, revolutionary new technology, and a rapidly changing global competitive environment, the middle market is now in the midst of an extraordinary transformation. In the late 1990’s, responding to meet the void in this overlooked marketplace, the Alliance of Merger & Acquisition Advisors, (AM&AA) - a Chicago-based, international professional trade association - was formed. Its goal was to share information, education, trusted relationships and extensive ‘behind the scenes’ support, to highly qualified business professionals seeking to better position themselves to serve the many transactional advisory needs of small to midsized, private companies. Today the AM&AA is the leading credentialing body for more than 800 middle market M&A professionals in more than 20 countries. These highly qualified, independent M&A experts identify and exchange new investment opportunities and provide market liquidity for privately held companies. Their services include financial and operational due diligence, accounting, finance, business valuation, tax, legal, strategic planning, and a wide variety of other advisory and transaction support services. The founding core values of AM&AA • A willingness to freely share knowledge and expertise. • Transparency and accountability in financial reporting. • A belief in ‘coopetition’, which is a blend

of cooperation and competition - or the act of helping an existing or future competitor in order to benefit oneself. • The commitment to life-long learning with a desire for continuous professional selfimprovement. • A belief that technology will increasingly affect the delivery of services and communication with clients and other constituents (i.e., peers, capital markets, the investing public, and clients). Historically, by training and experience, most financial advisory professionals focus on just one or two specialised services, such as business valuation, legal, accounting, tax, M&A, etc. Most fail to completely understand the owner’s fundamental personal needs, or comprehensively evaluate the company’s overall business performance and potential. Because the needs of the middle market private business owner and the company are inextricably intertwined, superior M&A and financial advisors focus on the whole and not just individual parts. The most highly valued advisors are those that combine the expertise of deep speciality know-how, with broad generalist knowledge across many strategically critical and diverse disciplines. The best M&A advisors often also build relationships with other professionals, to help clients establish investment goals and objectives that are consistent with their risk tolerances, unique circumstances and needs. While maintaining high ethical standards and adhering to the fiduciary duty due to the client, all of the MDP professionals working with private company owners should use a holistic framework to consider a client’s total portfolio, which includes both financial and non-financial assets. Due to trends such as the globalisation of middle markets, the internet, and greater overall knowledge and awareness of exit alternatives, business owners frequently will firstly ask for help and direction from any one of their trusted advisors. To respond most effectively to such requests, a small group of highly qualified AM&AA professionals have developed a comprehensive training forum to share their collective M&A know-how and experience. The ‘Certified Merger & Acquisition Advisor’ (CM&AA) credential is a ‘first-of-its-kind’ certification for the middle market attracting experienced investors and M&A advisory professionals of all types. Global recognition of CM&AA as a business leader and strategic partner in building longterm sustainable organisational success This vision focuses on enhancing the profile, influence, and relevance of professional M&A advisors. It recognises that many professionals in this sector are in a position

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MerGerS and aCQuiSitionS

of strategic or functional leadership, or are otherwise well placed to collaborate with colleagues in other disciplines, to create longterm sustainable value for their organisations. Business leaders typically perform director or management roles, while strategic business partners support and participate in decisionmaking and direction at various levels of the organisation. The organisation was founded on this basic principle of multi-disciplinary professional collaboration. Today many financial professionals focus on just one or two of the pieces of the overall business picture i.e., valuation, legal, accounting, tax, etc. They fail to completely understand the owner’s fundamental personal needs and comprehensively evaluate the company’s overall business performance and future growth potential. "The biggest mistake that consultants make is to overspecialise...clients start out, saying, `I do need an expert in this area.' But, ultimately, they stick with the professionals who provide synthesis, a big picture view, and more than just expertise," says consultant Andrew Sobel in the book Clients for Life. In today's economic environment, the lines between formerly distinct disciplines are fading, and experienced technical experts require new advisory skills to better understand and collaborate with other experts essential to the completion of successful M&A and other corporate financial transactions. As the first recognised standard of professional competence for these types of M&A transactional advisory services, the CM&AA designation complements and extends the value of all other existing

credentials and academic degrees, such as JD, MBA, or CPA. The CM&AA designation serves to maintain the highest recognised standards of professional excellence for middle market corporate financial advisory and transaction services, as well as to provide a benchmark for professional achievement within that overall body of knowledge. M&A advisors have an unprecedented opportunity in the middle market, with the generational transfer of wealth and capital being deployed by private equity and corporate investors. Because of the need for much better decision-making information in this middle market, leading certified members of AM&AA have just recently published: Middle Market M&A: Handbook for Investment Banking and Business Consulting. This book is a must-read for investment bankers; M&A intermediaries and specialists; CPAs and accountants; valuation experts; deal and transaction attorneys; wealth managers and investors; corporate development leaders; consultants and advisors; and CEOs and CFOs. In addition to this, the AM&AA is now working in close collaboration with several institutional partners, to build a new webbased ‘centre of excellence’ that will offer access to a directory of highly qualified subject matter experts, a central repository for research and study materials, as well as a clearinghouse of best practice, process and standards. It will also offer a source of both transaction and educational opportunities on the given subject or topic, as well as the establishment and maintenance of web-based dedicated collaboration/idea generation facilities (www.midmarketplace.com).

Michael R. Nall, CPA, CM&AA, CGMA Founder, Alliance of M&A Advisors 200 East Randolph St., 24th Floor Chicago, IL. 60601 Phone: 312-856-9590 mnall@amaaonline.org

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www.amaaonline.org My Blog: michael-nall.blogspot.com New Book: www.middlemarketma.com

Michael Nall is the founder of the Alliance of Merger & Acquisition Advisors® (www. amaaonline.org). The AM&AA is the leading association and credentialing body for 800 + middle market M&A professionals in 20 countries, providing connections, best practices, and education. An experienced corporate financial advisor with a proven track record as a transaction advisor for privately held companies, Mr. Nall is a published author and recognised speaker on the valuation, growth, and sale of middle market companies. With the benefit of over 25 years of experience in the industry, he leads the AM&AA development and launch of a ‘first of its kind’ professional training and credential designation for the independent corporate financial advisory community: ‘Certified Merger & Acquisition Advisor’ (CM&AA). A licensed and retired CPA, having sold his business over 25 years ago, Mr. Nall holds a Bachelor of Science degree in Business Administration and Accounting, graduating with honors from Eastern Illinois University.

M&A and Deal-Protection Those companies that are willing to engage in M&A in 2012 will want to protect their deals and themselves as much as possible. The recent cases of Porton Capital Technology Funds v 3M UK Holdings [2011] EWHC 2895 and Francotyp-Postalia Ltd v Whitehead [2011] EWHC 367, provide a useful reminder of the importance of accurate drafting in relation to two commonly used dealprotection measures – the earn-out provision and the non-compete clause. Earn-Out Provisions It is becoming increasingly common for parties to include an earn-out provision in their share purchase agreement (‘SPA’). The case of Porton Capital Technology Funds v 3M UK Holdings turned on an earn-out provision in a SPA entered into by 3M (the buyer) and Porton Capital Technology Funds (among others, the seller), to acquire the entire issued share capital of Acolyte Biomedica Limited (the target business). Put very simply, 3M were interested in purchasing the target business to acquire a certain technology. The seller sought to protect its position under the earn-out provision by imposing certain obligations on 3M during the earn-out period. These were that 3M would: (i) ‘actively market’ the target business; (ii) ‘diligently’ seek regulatory approval for the technology; and (iii) not terminate the target business without the consent of the seller, ‘such consent not to be unreasonably withheld’. Shortly after the sale had completed, 3M terminated the target business due to its poor performance. The seller had refused to consent to the termination on three separate occasions. It brought proceedings against 3M claiming that 3M had breached its obligations under the earn-out provision. The High Court found for the seller. In holding that 3M had breached its obligation to actively market the technology, it found that ‘actively marketing’ meant more than merely taking some active marketing steps. The High Court also found that an obligation to act ‘diligently’ imposed a standard of reasonable application, industry

ENGLAND AND WALES and perseverance, and that the seller had not acted unreasonably in withholding its consent. Despite the fact that the parties had clearly directed their minds to the conduct of the target business during the earn-out period, and had provided for it in the SPA, conflict still arose as to their obligations under the earn-out provision. This highlights the importance of an accurate and detailed earn-out provision. Ambiguous terms such as ‘diligently’, ‘active marketing’ and ‘all reasonable endeavours’ should be avoided where possible. From a seller’s perspective, it would be prudent to include a detailed schedule of what the buyer can and can’t do with the target business during the earn-out period, to ensure that the buyer cannot artificially decrease the earn-out consideration. On the other hand, a buyer will obviously want to limit the restrictions imposed on the running of its newly acquired business so it can operate effectively. Ultimately, an effective earn-out provision should align the respective parties’ interests, as both parties will benefit from a maximising of the target’s profits during the earn-out period. Non-Compete Clauses and Severability Non-compete clauses serve a similar purpose to earn-out provisions insofar as they provide post-sale protection for the buyer. The case of Francotyp-Postalia Ltd v Whitehead considered a non-compete clause and the rules relating to severability. The non-compete clause in question was held to be unenforceable because the geographical area in which it sought to restrict competition (defined in the agreement as the ‘Restricted Area’) was too large. The High Court attempted to sever the unenforceable noncompete clause from the contract, so as to preserve the enforceability of the remainder of the contract. In doing so it applied the ‘blue pencil test’ (Beckett Management Ltd v Glyn Hall [2007] EWCA Civ 613) which permits severance by the courts if: (i) the unenforceable provision can be severed without needing to add or modify

the remaining wording; (ii) the remaining terms continue to be supported by adequate consideration; and (iii) the severance does not change the character of the contract so that it materially differs from the contract that the parties entered into. The High Court held that it could not sever the unenforceable non-compete clause without adding or modifying the remaining wording. In particular, it could not simply delete ‘Restricted Area’ as a defined term, for this would also affect the application of the other restrictive covenants in which this defined term was used. Non-compete clauses require careful drafting. A non-compete clause that is excessive, whether in duration, content or geographical area, will be a restraint on trade and will therefore be unenforceable. But even with careful drafting, the tendency for restrictive covenants to be unenforceable makes it crucial that they can stand-alone from each other in the SPA. This extends to the use of defined terms across clauses. For example, when drafting the territorial scope of a non-compete clause, it is infinitely better to name a particular country, or countries, rather than using a defined term. Ultimately, the courts will not draft a new contract, and it is therefore up to the parties to ensure that the contract is drafted effectively so that they receive the protection that was intended. Nigel Boardman’s broad practice includes; domestic and international corporate finance, mergers and acquisitions, joint ventures, IPOs, demergers, private acquisitions and disposals, private equity, public takeovers, issues of compliance and corporate governance , insolvency, restructurings, investigations, and sports law.

Slaughter and May Nigel Boardman Partner Tel: 020 7090 3418 nigel.boardman@slaughterandmay.com www.slaughterandmay.com

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Introduction Slaughter and May is regarded as a leader in the M&A field. We advise leading companies and investment funds worldwide on all aspects of buying and selling companies and businesses in both private and public transactions, often involving many jurisdictions and in all business sectors. Our experience in M&A and day-to-day involvement with the market enable us to provide sophisticated advice of the highest quality on all types of deals, while at the same time remaining rooted in the reality of the market place. We are the principal legal adviser for more FTSE 100 and FTSE 250 companies than any other law firm and for a wide range of international companies. We advise large and small, listed and private, multi-national and domestic companies. We are ranked: • Tier 1 for M&A in London and the UK (Chambers UK, 2012 and The UK Legal 500, 2011) • Tier 1 for EC/Competition law in London and the UK (The UK Legal 500, 2011, Chambers Global, 2011 and Chambers UK, 2012) • Tier 1 for M&A in Hong Kong (Asia-Pacific Legal 500, 2011/2012) • Tier 1 for M&A: High-end Capability (International Firms) (jointly) in China (Chambers Asia, 2012)

• Law firm with the most FTSE 100 and FTSE 250 clients (Hemscott Corporate Advisers Rankings Guide, November 2011) • Hong Kong International Law Firm of the Year” (Chambers Asia Awards, 2010) • ‘Law firm of the Year’ (City A.M. Awards, 2010, Legal Business Awards, 2009)

There have also been a number of examples of important restructuring transactions taking place – some of them driven by necessity in the current economic climate. Developments

Growth trends UK M&A activity continues to be affected by the Financial Crisis. UK M&A activity in 2011 was US$130,554 million, 2.14% down on 2010 (Bloomberg Asia Pacific Legal Advisory Mergers and Acquisitions Rankings 2011, Global M&A Activity by Target Region/ Country). However, we are anticipating that a recovery in US M&A activity is likely to have a follow on effect for the UK and M&A activity is expected to increase over the coming year. There has been substantial growth in US M&A activity, which totalled US$874,691 million in 2011, up 14% on 2010 (Bloomberg Asia Pacific Legal Advisory Mergers and Acquisitions Rankings 2011: Global M&A Activity by Target Region/ Country). Despite the financial crisis, we have seen from our own experience significant cross-border M&A activity, such as the acquisition of Cadbury by Kraft Foods Inc., the merger of British Airways with Iberia and American Airlines, the recommended cash bid for Autonomy by Hewlett-Packard, and Prudential’s proposed combination with AIA in Asia. We have seen companies that are cash-rich making some strategic acquisitions. As private equity activity has reduced, it has been a good time for corporates that are in a position to acquire others. A further consequence of the global downturn has been an increase in the number of hostile transactions in the public acquisition arena. One of the factors which has contributed to this is the discrepancy in price expectation between buyers in the market, who are hoping

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to take advantage of suppressed prices, and target companies and sellers, who are keen to ensure that they are receiving optimum price and some of whom are prepared to ‘wait it out’ until conditions improve.

Last year saw one of the most significant shake-ups of the UK Takeover Code to have taken place in recent history. This stemmed from Kraft Foods Inc.’s hostile offer for Cadbury (in which we advised Cadbury), which brought the UK public acquisition process into the spotlight. Although some of the wide-ranging proposals originally debated did not lead to amendments to the UK Takeover Code (principally those relating to raising the acceptance threshold and disenfranchising short-term shareholders), some other major changes have been implemented – some of which are having significant effects on deal strategy and timing. Most importantly, The Takeover Panel has abolished all traditional deal protections (except in limited cases) and it has sought to impose strict time limits during which possible bidders need either to table their offers or ‘walk away’. Challenges The main challenges facing the UK M&A market are (i) the current economic climate, (ii) in relation to the public acquisition arena, the new rules of the Takeover Panel, and (iii) ensuring that debt keeps flowing, to enable purchasers and bidders to strike the right balance between equity and debt funding and to reinvigorate deal flow.

HONG KONG Growth trends M&A activity in Hong Kong remains relatively healthy, supported to a large extent by Chinese M&A activity and pan-Asian activity. Given Hong Kong’s position as a hub for investment into the PRC, its status as a major financial centre and the widespread use of offshore companies for investment into and out of the PRC, a substantial number of Hong Kong M&A transactions have foreign involvement. While acquisitions of Hong Kong companies in 2011 shrank by 24%, down to US$29,199 million from US$38,343 million in 2010 (Bloomberg Asia Pacific Legal Advisory

HONG KONG Mergers and Acquisitions Rankings 2011: Global M&A Activity by Target Region/ Country), Hong Kong outbound M&A in 2011 was US$32.8 billion (Bloomberg Asia Pacific Legal Advisory Mergers and Acquisitions Rankings 2011: 2011 YTD Asia Pacific M&A Capital Flow), significantly outweighing inbound M&A. We have seen many significant recent inbound and outbound PRC and Hong Kong acquisitions, such as Diageo’s acquisition of a controlling interest in Sichuan Chengdu Quangxing Group and its mandatory tender offer for Sichuan Shui Jing Fang; Guangdong Rising Asset Management’s acquisition of Caledon Resources; CITIC Dicastal Wheel Manufacturing’s acquisition of German company KSM Castings Group; Hony Capital’s investment in a Madagascan iron ore project; and PTTEP’s recently announced possible offer for Cove Energy plc. Developments Companies Ordinance Rewrite One of the key pieces of legislation relating to mergers and acquisitions in Hong Kong is the Companies Ordinance. A recent review of the Companies Ordinance has resulted in the Companies Bill, which is expected to come into force in 2014. Key changes will be the revision of the headcount test for schemes of arrangement, enabling a company and its wholly-owned subsidiaries to amalgamate by special resolution, and streamlining the ‘whitewash’ procedures in relation to providing financial assistance for the acquisition of shares, which will now also apply to listed companies. Takeovers Code The Hong Kong Takeovers Code was amended in 2010 so as now to apply to real estate investment trusts (REITs) that are authorised by the Securities and Futures Commission (SFC). PRC Anti-Monopoly Law The PRC Anti-Monopoly Law, which governs anti-competitive behaviour and

merger control, has been in effect since 2008. MOFCOM has published a number of rules and guidelines on merger control, although certain key issues, such as the circumstances that constitute the acquisition of ‘control’ and the treatment of joint ventures under the Law, remain subject to some uncertainty. It is expected that further guidance will be published by MOFCOM, including in relation to transactions falling below the jurisdiction thresholds but which may be subject to merger review (Competition Law in China: Slaughter and May: October 2011). Hong Kong Competition Law There is currently no cross-sector competition law in Hong Kong, although the telecommunications and broadcasting sectors in Hong Kong are subject to their own competition rules as set out in the Telecommunications Ordinance and the Broadcasting Ordinance. However, in 2010 the Competition Bill was introduced and, if passed, it will have a significant impact on businesses operating in Hong Kong. The Bill prohibits any agreement or behaviour with an anti-competitive effect in Hong Kong. The Competition Bill does not include merger control provisions, therefore, mergers can continue to be implemented in Hong Kong without review (except in the telecommunications sector, which is already subject to merger control), but parties will need to ensure that they do not fall foul of the law, for example, by assessing whether there are provisions in the transaction agreements that may have anti-competitive effects. The Competition Bill is expected to be voted on in 2012 and, if passed, will come into force following a transitional period expected to be at least 12 months. Challenges The main challenge currently facing the M&A industry in Asia is the potential slowdown in economic growth in China, and its knock-on effect for the rest of Asia. Another challenge is the impact of the various new laws and regulations and the way in which these will be interpreted and applied across the Asian jurisdictions.

David Watkins is a partner of Slaughter and May. David moved to our Hong Kong office in the summer of 2011. Prior to that he was based in our London office. His principal areas of practice include mergers and acquisitions (of both public and private companies), general corporate finance and equity capital markets. David spent two years on secondment to The Panel on Takeovers and Mergers (London) from January 2006 to January 2008 as Secretary regulating some of the most high profile public merger and acquisition transactions to have taken place in recent years.

T +852 2901 7278 (Direct line) E david.watkins@slaughterandmay.com

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M&A advisers optimistic about outlook for mid-market, according to Nexia International survey A global survey of independent corporate finance firms paints a picture of relative good health for mid-market M&A deals, says Nexia International, the network of independent accounting and consulting firms. Nexia International’s member firms say they continue to advise on a steady flow of mid-market M&A deals. Just over a third (35%) of member firms surveyed said that the volume of M&A deals on which they advised increased in the last year compared to the previous year. Another 41% said it had stayed about the same. Firms are also relatively confident about the volume of M&A deals on which they expect to advise over the coming year. Nine out of ten firms said they expect the volume of deals to increase (38%) or remain unchanged (52%) in the next 12 months, despite the generally gloomy global economic outlook.

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While most advisers are working from a relatively low base, given difficult market conditions, the research suggests that the worst slump in M&A activity in decades may be behind us. The perennial M&A drivers of economies of scale, growing the client base, improving profitability and succession planning were cited as the keyfactors likely to lead to more M&A activity. “The survey appears to confirm that there remains a steady trickle of businesses putting themselves up for sale as a result of the natural lifecycle of the family business, says Charles Simpson, head of corporate finance at UK member firm Saffery Champness. “This may be due to lack of cash, business owners wanting to retire or reaching a pivotal point

in their lives, or changes in the family due to death, divorce or retirement. Succession planning remains a critical issue for many smaller privately owned businesses, which is the natural territory of many Nexia firms”, he says. “And buyer demand looks to be slowly improving as buyers who have built up cash reserves during the good times look for higher returns and quality businesses in which to invest. The old adage that cash is king is particularly pertinent in the current environment. While still relatively thin on the ground, there are cash-rich corporate buyers, ready to make strategic purchases, including cross-border, by leveraging their own balance sheets so that finance is secured on the rest of the business rather than the target,says Simpson.”

Obstacles remain Difficulties in raising finance and a lack of market confidence are overwhelmingly cited as the key obstacles to M&A activity next year, followed by an inability to match valuation expectations. “Mid-market M&A has been slow to recover from a series of setbacksfollowing the fall-out from the financial crisis in 2009/10”, says Simpson. “Potential buyers have struggled to secure debt funding for deals, as banks remain reluctant to lend, instead focusing on existing customers and rebuilding their balance sheets,” he adds. “In addition, there has been a reluctance on the part of sellers to lower their valuations from the highs of the boom years up to 2007/08, despite deepening global economic difficulties. In contrast, buyers immediately discounted valuations, resulting in a mismatch which has kept deal flow static,” says Simpson. There are some signs of healthier multiples, but for the volume of M&A deals being done to rise significantly, ultimately sellers will need to reassess their value expectations in line with the ‘new reality’. Simpson says “there are now signs that sellers realise that multiples are not going to rise quickly and are therefore more accepting of the valuations achievable in today’s market.” Other key survey ﬁndings • Mergers and trade sales, particularly private-equitybacked deals, are expected to be the most active types of transaction, with

leveraged management buy-outs or buyins suffering as a result of a lack of debt finance. • Manufacturing is expected to be the most active sector for M&A deals in the next 12 months globally, followed by information and communications technology and business services. • Where firms anticipate growth in M&A activity beyond their own region, AsiaPacific, in particular South East Asia and China, is expected to be the most active for cross-border deal growth, followed by Western Europe, North America and Central and Eastern Europe.

international requirements of our clients, ranging from globally listed entities and international subsidiaries, to owner-managed businesses and high-net-worth individuals. Nexia member firms had combined global fee income of US$2.33bn in 2011 and Nexia was ranked the 11th largest international network by revenue in the latest International Accounting Bulletin World Survey (2011).

About the survey Nexia International’s annual M&A survey of member firms was conducted at the end of 2011. Participants were senior decisionmakers within the corporate finance departments of 66 member firms from 36 countries around the world. The survey measured the involvement of Nexia member firms in M&A transactions in a lead advisory or transaction support role. Nexia International is home to a wide range of firms, but the majority of firms in the survey (71%) have fewer than ten partners or directors. Just over half (51%) of the Nexia firms in the survey advised on M&A deals with a total value of up to US$5m last year. However, 22% of the firms surveyed advised on deals with a total value of US$10m–50m and a further 22% on deals totalling more than US$50m. Nexia International is a leading global network of independent accounting and consulting firms with more than 500 offices in over 100 countries, providing a comprehensive portfolio of assurance, tax and advisory services. With a substantial presence in the world’s major financial and economic centres, Nexia is strategically positioned to serve the diverse

For further information and insight into the survey, contact: Charles Simpson Saffery Champness Tel: +44 20 7841 4176 Email: charles.simpson@saffery.com

PR enquiries: Steve Smith or Layisha Laypang Thirdperson Words Tel: +44 20 7096 5026 Email: stevesmith@thirdpersonwords.co.uk layishalaypang@thirdpersonwords.co.uk

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Merger Control in India – New Beginnings Merger control is the new reality. The Competition Act, 2002 (Competition Act) modelled on the EU, the US, the UK and other competition law jurisdictions seeks to ensure that a proposed 'combination' has no appreciable adverse effect (AAE) on 'competition within the relevant market in India'. A combination is defined to include an acquisition of shares, voting rights, control or assets of an enterprise or mergers and amalgamation between enterprises whether occurring in India or outside. Thresholds for notiﬁcation Transaction attracts merger control provisions if the combined size of the acquiring and acquired enterprise in a transaction where parties have a cross-border presence is (i) globally, at least USD 3 billion in terms of assets or USD 9 billion in terms of turnover on a group basis or at least USD 750 million in terms of assets or USD 2.25 billion in terms of turnover on an enterprise basis and (ii) in India, at least USD 165 million in terms of assets or USD 500 million in terms of turnover on a group or enterprise basis. In purely domestic transactions the combined size of the acquiring and acquired enterprise in a transaction is, at least USD 1.32 billion in terms of assets or USD 4 billion in terms of turnover on a group basis or at least USD 330 million in terms of assets or USD 1 billion in terms of turnover on an enterprise basis. Exemptions There are a few exemptions of note. One, if the acquired enterprise has assets that are worth less than INR 2.5 billion in India or turnover of less than INR 7.5 billion in India but this exemption does not apply to mergers and amalgamations. Second, acquisitions of up to 25% of the shares or voting rights of an enterprise solely as an investment or in the ordinary course of business (which does not lead to an acquisition of control) and acquisitions within the same 'group'. However, as per the recent amendment, for mergers and amalgamations within the same 'group', the exemption is limited to mergers or amalgamations involving a holding company

and its wholly-owned subsidiary, and between subsidiaries wholly-owned by enterprises belonging to the same group. Highlights of the Notiﬁcation process The acquirer (for acquisitions) or the parties jointly (for mergers and amalgamations) are required to notify the Competition Commission of India (CCI) within 30 days of the execution of an agreement or binding document providing for the transaction. In all cases, the notification to CCI must be filed in 'Form I', which provides for limited disclosure. In cases where a 'second request' is called for, 'Form II', which provides for detailed disclosures, must be filed. The CCI is required to provide a prima facie opinion on whether there is expected to be 'AAE on competition within the relevant market in India' within 30 days of the notification. The CCI has informally indicated that 90 to 95% of cases would receive a favourable view and be closed at this stage. In a small minority of cases, the CCI may call for detailed disclosures (Form II) and engage in an in-depth review, leading to a final order within 180 days of the original notification. In any event, a combination is deemed to be approved if there is no decision within 210 days of the original notification. It must be noted that all time limits exclude the time taken in responding to queries from the CCI or for rectifying a defective notification on account of incomplete information / documentation. Assessment of AAE For assessing AAE on competition for combinations, some of the factors the CCI is required to consider under the Competition Act are (a) extent of barriers to entry into the market; (b) degree of countervailing power in the market; (c) likelihood that the combination would result in the parties to the combination being able to significantly and sustainably increase prices or profit margins; (d) extent to which substitutes are available or are likely to be available in the market; (e) market share, in the relevant market, of the persons or enterprise in a combination, individually and as a combination; (f) relative advantage, by way of the contribution to the

Trilegal One Indiabulls Centre 14th Floor, Tower One Elphinston Road, Mumbai - 400 013. Tel.: +91 22 4079 1000

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INDIA economic development, by any combination having or likely to have appreciable adverse effect on competition; and (g) whether the benefits of the combination outweigh the adverse impact of the combination, if any. In all cases decided until now, the CCI has passed final orders within 30 days of the notification. Several cases at the CCI have involved foreign acquirers and the foreignorigin of the acquirers has had little impact on the CCI’s analysis. The merger control provisions of the Competition Act envisage a mandatory notification regime and a failure to notify attracts a penalty which may extend to one per cent of the total turnover or the assets of the combination, whichever is higher. Further, where a combination has been carried out without notifying the CCI, the CCI has the power to initiate investigation into such combination within a period of one year from the date on which the combination takes effect. It is pertinent to note that CCI has the power to nullify the combination if it is of the view that such combination can cause AAE on competition in India. Trilegal is one of the few law firms in India to have made a merger control filing before the CCI since the merger control provisions were notified. The parties represented by Trilegal have received the CCI’s approval within the 30 days time period. Recently, in a transaction related to acquisition of assets, Trilegal acted for the acquirer, a leading foreign bank operating in India.

Mergers &Acquisitions: An Overview Founded in 1917, Amarchand Mangaldas is India’s largest law firm. It has over 500 lawyers, including 59 partners, and a presence in the major cities in India. An exclusive Indian member of Lex Mundi - the world’s leading association of independent law firms - Amarchand Mangaldas has been part of major headline transactions in all segments of industry and services. They have represented almost every major transnational corporation on their India entry and business strategy. Amarchand Mangaldas has one of the most highly reputed Mergers and Acquisitions (M&A) practices in India. The firm’s M&A team maintains an impressive track record in various types of domestic and cross-border M&A transactions. As a truly integrated full-service law firm, Amarchand Mangaldas has been providing focused and coordinated solutions to foreign companies seeking to acquire existing businesses or set up new projects in the country. They are also credited for quality professional services rendered to clients in structuring business acquisitions. The firm has been pivotal in several deals on behalf of clients in diverse forms including acquisition of shares, the takeover of business divisions through the Board of Industrial and Financial Reconstruction (BIFR), and contractual arrangement. The firm’s acknowledged expertise in the domain has prompted the Securities

Exchange Board of India (SEBI) to engage the firm on the committee to review the Takeover Code in India. The firm is acknowledged as the chief architect of the ‘Open Takeover Offer'. The firm’s M&A practice encompasses all areas of acquisitions – advice; structuring; due diligence; buy-outs; shareholder agreements; privatisation; share and asset disposals; property M&A; joint ventures; corporate mergers and de-mergers; negotiations; and post-acquisition due diligence and integration. Prominent cases include a USD 1.1 billion investment by JFE Steel Corporation in JSW Steel Limited, and a USD 1.4 billion sale by Aircel Limited of its passive infrastructure business, to a wholly owned subsidiary of GTL Infrastructure Limited - the latter being the largest all-cash M&A transaction in India to-date. Having dealt with some of the largest and most intricate mergers documented in the archives of Indian corporate business, the firm has also held a unique position as an advisor on the public policy formation in India. Such pre-eminent counselling has earned the firm a leading reputation amongst its peers. The practice has also been consistently acknowledged at various awards, league tables and ranking surveys on a local, national and world scale. Some of corporate India’s most influential entrepreneurs turn to Amarchand Mangaldas for innovative legal solutions and strategies.

An Outlook on Mergers and Acquisitions in Malaysia for 2012 Amidst the external headwinds in the global economy, the Malaysian economy performed relatively well in 2011, growing at a rate of 5.1%. Corporate activity in Malaysia was also relatively robust. On the M&A front, 2011 saw us at Kadir, Andri & Partners experience a healthy flow of deals. 2011 started off well for us, when we advised Malayan Banking Berhad (Maybank) in its SGD1.8 billion acquisition of Singapore listed broker Kim Eng Holdings Ltd. We were also involved in Hong Leong Bank’s RM5.06 billion acquisition of EON Capital Bhd (‘EON’), which created the fourth-largest banking group in the country. In terms of deals involving Malaysia’s sovereign wealth fund Khazanah Nasional Berhad (‘Khazanah’), we advised Khazanah in its RM3.3bil disposal of a 30% stake in Integrated Healthcare Ltd (‘IHH’) to Mitsui & Co Ltd, and then in IHH’s subsequent acquisition of a stake in Turkey's Acibadem Group – the latter making IHH one of the world's largest healthcare groups. Looking ahead, with uncertainties continuing to roil global economies, market conditions and investor sentiments for the remaining months of 2012 have become increasingly

difficult to predict. However, a number of factors could potentially provide the necessary impetus for further M&A activity going forward. Firstly, industry experts are expecting to see further consolidation between the existing nine banking groups, driven by increasing competition, thinning margins and the regional aspirations of the players in the sector. Secondly, it is expected that the insurance sector will see some consolidation and the entry of more foreign insurers into the Malaysian insurance industry, spurred on by the increase in the cap on foreign ownership of Malaysian insurers to 70% from 49%, and the introduction of the risk-based capital framework. On the insurance front we are currently advising Insurance Australia Group, which has a 49% stake in local insurer AmG Insurance Berhad, as to the latter’s acquisition of a stake in Kurnia Insurance (M) Berhad. Thirdly, the Oil, Gas and Energy sector, one of the National Key Economic Areas identified by the Malaysian government as part of its Economic Transformation Programme to lift Malaysia's status to that

INDIA Mr. Shardul S. Shroff, Managing Partner Amarchand & Mangaldas & Suresh A. Shroff & Co. Amarchand Towers, 216, Okhla Industrial Estate, Phase III, New Delhi (India) Ph: 91 11 26920500 Fax: 91 11 26924900 shardul.shroff@amarchand.com

2012 sees the firm at the cutting-edge of new issues in law and areas of economic activity, guiding the creation of legal precedents, and expanding its services and skills to meet the challenges of change.

MALAYSIA Kadir, Andri & Partners Dato’ E. Sreesanthan Senior Partner Tel: 603-2078 2888 sree@kaaplaw.com www.kaaplaw.com

of a high income nation by 2020, is likely to see considerable activity. We are currently advising SapuraKencana Petroleum Berhad, a special purpose vehicle set up to facilitate a RM12 billion merger between two major oil and gas players namely, Kencana Petroleum Berhad and SapuraCrest Petroleum Berhad. Lastly, the warming relations between the Malaysian and Singapore governments, as witnessed in the 2010 historic agreement between the two governments over the longdrawn out railway land issues, bodes well for more cross-border deals in the future. At the time, we advised Khazanah, the investment arm of the Malaysian government, on the said transaction.

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5. Gaia Retreat & Spa - Brooklet, Australia This boutique hotel in Brooklet combines warmth and beauty through its elegant earth tones styled in every room. Perched on the highest point of a hill, the dramatic backdrop of Gaia Retreat & Spa cannot be matched. As one TripAdvisor traveller said, “Gaia is the perfect place to escape from the world. It is located in the most spectacular location and it is a beautiful health retreat.”

As one TripAdvisor traveller said, “I have just returned from a weekend at this elegant hotel and I was impressed by the pools, the treatments and the professional and friendly staﬀ.”

8. Hotel Aqua - AbanoTerme, Italy A bespoke styled hotel adorned with fashionable furnishings, soft architecture and natural materials, Hotel Aqua is also an oasis for your senses featuring an extensive menu of treatments, remedies and massages. As one TripAdvisor traveller said, “The hotel is really beautiful, quiet and ideal for a holiday in total relaxation.”

9. Thermenwelt Hotel Pulverer - Bad Kleinkirchheim, Austria This quiet property with views of the Carinthian Nock Mountains and lakes is ideal for lovers of water. Featuring indoor and outdoor pools, a spiral whirlpool and a waterfall, Thermenwelt Hotel Pulverer is the ideal place to immerse yourself and discover the revitalizing quality of water. As one TripAdvisor traveller said, “We had an unbelievable holiday at Pulverer Hotel! Everything from the meals, entertainment, service and treatments were top class. We plan to return.”

10. St. Martins Therme & Lodge Frauenkirchen, Austria Set close to the National Park with spectacular views from the wooden decks of its peninsula, St. Martin’s Therme & Lodge is a magical retreat to unwind and watch nature go by. As one TripAdvisor traveller said, “Great cozy place in the middle of nowhere to just relax and spend time in the thermal baths.”

For more information on these properties, including reviews and travellers photos, visit www.tripadvisor.co.uk/TravelersChoice-Hotels-cRelaxation-g1 36 • GBM • April 2012

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Spa resort s

LUXURY BRAND SERIES

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Coworth Park Ascot The Spa at Coworth Park Revel in the pastoral tranquillity of a unique hotel – a refined retreat with more than a few surprises… Set in 240 acres of picturesque parkland on the borders of Windsor Great Park, Coworth Park blends the warmth and comfort of a traditional country house hotel with an eccentric spirit that is undeniably English and irrefutably modern. Designed to complement and preserve the natural beauty of its surroundings, our groundbreaking eco-luxury spa is an architectural wonder. Partially submerged in the landscape, it enjoys breathtaking views, with floor-to-ceiling windows in the pool making for a uniquely sublime swim. Built over two floors the spa has eight treatment rooms (including two doubles), a manicure/ pedicure suite and relaxation rooms, while the roof is adorned with a garden of thyme, lavender, chamomile and other fragrant herbs. Guests can enjoy a range of luxury branded treatments including Carol Joy London, Kerstin Florian, Aromatherapy Associates, and a 100% organic treatment by Dr. Alkaitis. Swimmers can enjoy underwater music and atmospheric lighting. Filled with natural daylight, the glass side of the swimming pool hall opens out onto a sun terrace sheltered by the spa hillside. Along the length of the swimming pool are 15 unique amethyst geodes which stand on stone plinths. Sourced from St Andrews, Scotland, these sculptures range in size, have had the backs silver leafed and are uplit. The depth of the pool is 1.2 metres deep hence there is no lifeguard on duty. If you feel peckish after a dip in the pool, you can enjoy light meals or even a

glass of chilled champagne in The Spatisserie. Boasting solid eco-credentials The Spa at Coworth Park is built predominantly out of timber structures. Emerging from the hillside it has a Living Roof with plants and herbs such as St. John’s Wort, Thyme, Chamomile and Lavender which are used by the spa therapists. The Spa at Coworth Park Spa.CPA@dorchestercollection.com +44 (0)1344 756 756

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Luxury Brand SerieS – Spa reSortS

Spas of Jetwing Hotels Sri Lanka HEAVEN, ON EARTH – THE SPAS OF JETWING HOTELS Enter our heavenly havens and leave the earth far, far behind. Let all your worldly cares slip away as you savour the sublime wonders of a Jetwing Spa. Nestled in seclusion at some of the most beautiful locations in Sri Lanka, spa facilities and treatments on par with the world’s best are yours to indulge in, with all the warmth of care and attention that is naturally yours at any Jetwing Hotel. Whether you seek a total holistic holiday experience with a complete wellness package or just looking to treat yourself to a few hours of divine pampering, you will discover pure bliss. Our spas are secluded sanctuaries of complete privacy where you can leave yourself in the hands of qualified therapists whose expert care will restore you mind, body and soul. From a simple massage to a full programme of specialised healing, you can choose your indulgence from the extensive spa menus which include our renowned spa treatments and traditional Ayurvedic and naturopathy cures. All facilities are also of the highest standards with wet areas, steam rooms, plunge pools as well as massage and treatment rooms available and the best spa products as well – international brands such as Sothys or products renowned in Sri Lanka, such as Spa Ceylon and Link. If you wish for a customised wellness package, it can be tailored to fit your individual requirements too. Our signatures Spa Experiences are legendary and deemed unforgettable. Indeed, once you have enjoyed the pleasures of a Jetwing spa you will be more than ready to return to the world – refreshed, renewed and rejuvenated, a whole new you.

Jetwing Blue

Jetwing Sea

Offering you the most wonderful indulgences and the healing touches of Ayurveda, our spa in Negombo is a perfect haven for those who wish for peaceful pursuits. Here, you can treat yourself to some wonderful pampering: from aromatherapy massage to reflexology and everything in between.

For those who believe in ultimate indulgence, the new rooftop Spa at Jetwing Sea is a place to head straight to. Here, some rejuvenating treatments will transport you to another world, if the view fails to do so first that is.

You can choose from an extensive spa menu which includes our renowned signature treatments and some traditional therapeutic care too. We provide free consultation and special spa programs can be arranged for our long staying guests, in addition your package can be tailored to fit individual requirements too.

Pampering of every sort is here at your command with trained therapists to attend to your every comfort too. At our spa every luxury from a simple massage to a full programme of specialised healing is yours. You can choose yours from an extensive spa menu which includes our famed signature treatments too.

The spa at Jetwing Blue is open from 8 am to 9 pm, so you can choose your time there in leisure too. Indeed, you can even spend the whole day and treat yourself to an indulgent spa dining experience as well.

Open from 9 am to 8 pm every single day, we provide free consultation and 3 to 5 day spa programs can be arranged for our long staying guests, and if you require a specially created individual spa package, that can be arranged as well.

Contact - +94 31 2279000-3

Contact - +94 31 2279062

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Jetwing Vil Uyana If a holistic holiday experience where you are totally at one with nature is what you seek, you will find pure heaven at the Jetwing Vil Uyana Island Spa. Enter our world of bliss, and your imagination becomes reality; dwell in the sheer delights of our Island Spa – a private haven where absolute peace and perfect luxury awaits to heal and pamper your entire being. Let your tensions give up their hold to a relaxing body massage; your cares flee as the soothing scents of aromatherapy care engulf you. Watch your worries float away as you soak in the restoring swirls of the plunge pool. So why leave these pleasures, stay and indulge in a romantic candle-lit Spa dinner for two; the world can wait. As in the days of the ancient kingdom of Sigiriya, Ayurveda treatments handed down across the centuries, still extend their healing powers to refresh and renew you – mind, body and soul. A secluded haven on a little island surrounded by the lake, the facilities at our Spa are exceptional and complete privacy in the company of nature is yours to indulge in. There is a ‘wet area’ with a steam room and plunge pool as well as massage and treatment rooms that offer a range of therapeutic as well as beauty treatments. Our signatures Spa Experience takes you back to the wonderful luxuries enjoyed by ancient royalty – try the ‘Kassapa & Upulla’ special honeymoon spa package for the most incredibly romantic way to pamper yourselves. Contact - +94 66 4923585-6

Jetwing Lighthouse Whether you are just looking for a few hours of pampering or a holistic holiday experience, you will find pure bliss at the Jetwing Lighthouse Spa. Set away from the main hotel buildings in a secluded corner, this beautifully designed spa is surrounded by palms. It faces its own large pool, with the sweeping beach and ocean on one side making it an isolated spot of privacy. Open from 9 am to 8 pm every single day, the spa offers you every luxury from a simple massage to a full programme of specialised healing. So, leave yourself in the hands of our experts and the best of care. Our signatures Spa Experiences are legendary. Try a ‘Marma’ total body, mind and soul experience or settle for the incredibly hedonistic Adam & Eve spa experience – a floral soak under the stars, candle lit dinner by the plunge pool, and imagine that the world is still yours and yours alone. Contact - +94 91 2223744

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Luxury Brand SerieS – Spa reSortS

La Sultana Marrakech Dream or reality ?

discreetlythroughout your stay.

In the heart of imperial Marrakech, in the first kasbah of the sultans, next to the ancient Saadian tombs, is the hotel La Sultana. Chosen by Forbes Traveller magazine as one of the 400 most beautiful hotels of the world, it is an oasis of calm and comfort amidst the swirl and bustle of the medina.

La Sultana is made up of five separate riads (courtyard houses). The unusual origins give the hotel a wonderful mixture of levels and spaces.

Moroccan hospitality

La Sultana shows Moroccan craftsmanship at its best, from the intricate stucco ornamentation to the hand-carved woodwork and tadelkat (polished plaster) surfaces.

A member of Small Luxury Hotels of the World, La Sultana has a level of servicesecond to none. Our staff of 100 will helpyou cheerfully, efficiently and

Every part of the hotel has its own associations and atmosphere.

Year-round, the swimming pool provides

the perfect respite from the heat and dust of Marrakech. It is located in a patio with shady colonnades, palm, banana and sica trees and high brick walls covered with Virginia creeper. The bedrooms and bathrooms are like voluptuous boudoirs embellished with marble, tadelakt and zellige (ornamental tiles). When you open the door to your bedroom you enter a world of fantasy. The 28 bedrooms and suites all have their own individual style but they share the La Sultana hallmark of oriental splendour. This suite, with its bold fuchsia drapes and carpets, its slate-blue tadelakat and carved cedarwood furniture, combines the worlds of the Indian maharajah and Moorish sultan. A spa that oﬀers the best of East and West The spa and beauty parlour offer every type of treatment for health and relaxation. As well as an exercise room, sauna and jacuzzi there are shared and individual hammams, massage rooms and lounges. At the Sultana you can enjoy detoxification and rejuvenation techniques like aromatherapy, balneotherapy (therapeutic baths), algotherapy (seaweed treatments for body and face) and chromotherapy(chakra-balancing), as well as traditional Moroccan massage and beauty therapies. The sensuous world of the harem: ancient doors open onto an interior of crimson marble, illuminated by wrought-iron lanterns, with a vaulted ceiling suspended on pillars rising up from a turquoise pool.

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Delicious food, whatever the time of day Breakfast at La Sultana is a delight. From your table in the shade of the palm trees you can look over the rooftops of the medina while enjoying seasonal fruits, freshy-baked pastries or whatever else takes your fancy. At midday you can relax over a light lunch on the patio before taking a dip in the pool. Late afternoon is given over to the ceremony of mint tea served with Moroccan pastries. And what better way to end a day of shopping or sightseeing than with dinner under the stars? How about a honey-glazed leg of lamb simmered in a tajine? Or foiegras served with juicy apples from the Ourika valley? At La Sultana meals are treated like works of art. We use the best local produce, the freshest fish and meat. Our Moroccan chef knows

the most mouth-watering recipes in the Moroccan and Mediterranean repertoire, to which he adds a twist of his own. And did we mention our home-made pastries, ice-creams and desserts?

inviting atmosphere and the all-important ‘wowfactor’. We’ll help you design and plan your event down to the tiniest detail.

Cocktail hour When the time comes for a Gin Fizz, Manhattan or Mojito youcan choose between drinking al fresco or in the wood-panelled interior of the lounge bar. The retro club chairs, with their white leather upholstery, are a comfy way to enjoy a plate of tapas or a cigar. And there’s a large window with an underwater view of the swimming pool.

La Sultana Marrakech 403 Rue de la Kasbah –Marrakech Tél: (00212) 5 24 38 80 08 – Fax: (00212) 5 24 38 98 09 contact@lasultanamarrakech.com www.lasultanamarrakech.com

Memories are made of this La Sultana has three essential elements for a special event: professional staff, April 2012 • GBM • 43

Luxury Brand SerieS – Spa reSortS

La Réserve Ramatuelle – SPA On a private domain overlooking the Mediterranean, La Réserve Ramatuelle is a hotel and spa that offers luxury and escape in equal measure. Designed by internationally renowned architect Jean-Michel Wilmotte, there are 9 bedrooms, 20 suites and 12 private villas, complete with an onsite restaurant and bar. Each one of the well appointed rooms has floor-to-ceiling windows, and a full sea view terrace to make the most of the majestic views: Some even have their own private garden.

exercise; and increasing stamina through a wholesome diet. We also mobilise complementary prevention strategies to help you maintain such health and lifestyle changes long after your stay. This programme is a complete experience that promises to improve your quality of life.

• 9 Bedrooms – 50 sqm (540 sq ft.) – including two with disabled access

Now that winter is over and sunny days beckon, are you looking forward to taking on a physical and mental challenge? Our sportwalking programme will meet your expectations every step of the way. Set in a breathtakingly beautiful landscape between the sea and the mountains, La Réserve Boot Camp is a 5 day / 5 night programme designed for groups of four to eight people.

• 11 Junior Suites – 55 to 72 sqm (590 to 775 sq ft.) • 2 Deluxe Junior Suites – 80 sqm (860 sq ft.) • 2 Suites – 75 to 95 sqm – with separate bedroom • 5 Prestigious Suites – 90 to 100 sqm (970 to 1075 sq ft.) – with one or two separate bedrooms La Réserve Ramatuelle is the only spa in France to offer Crème de la Mer beauty treatments, the Spa has exclusivity in France and is the only SPA Crème de la Mer.

Ultimate Regenerating Experience 6 Day / 7 Night Programme Welcome to a refined, sensory universe where luxury and discretion reign. In an exceptional setting that harmoniously blends in with the surrounding landscape, the Ultimate Regenerating Experience is designed to restore overall balance, through weight loss, sculpting, and the revitalisation of the body. How you physically feel often relates to what’s going on inside. At Réserve Ramatuelle our healthcare professionals establish a personal profile to understand your true objectives. You then receive a tailormade programme using natural methods, to help you achieve your specific goals. Our 6 day / 7 night programme specifically focuses on maintaining and optimising your health through boosting several factors namely, slimming and toning; balancing the flow of energy; reducing stress; re-establishing physical and psychological fitness through regular

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La Réserve Boot Camp 5 Day / 5 Night Programme

On your arrival, our consulting doctor will carry out a medical check-up and assessment of your aptitude for physical activity. The following day, after yoga and breakfast, a guide will take you through the countryside and coast to explore this exceptional region on a Nordic-style walk, keeping pace with individual abilities. Our team have several planned itineraries ranging from 15 to 20 kms, at varying degrees of difficulty. In the afternoon, the Spa will welcome you with a programme of pampering treatments. Last, but by no means least, our chef Eric Canino will introduce you to the delicious and healthy flavours of his ‘Mediterranean Regime’.

HEALTH AND WELL-BEING PROGRAMMES SPRING 2012 ENERGY PROGRAMME 7 days / 6 nights - Medical check-up at beginning and end of programme - Health and wellbeing follow-up every two days - Personal trainer consultation to establish a personalised sport programme - 3 x Personal training sessions - Therapeutic natural drinks according to prescription - Daily ‘Sport & Health’ activities: Pilates, yoga, aqua-energy/ strengthening, cardio, nordic walking, & cooking lessons etc

- 3 x La Réserve Better Aging body treatments - 1 x Therapeutic treatment: massage, reflexology, acupuncture, shiatsu & osteopathy - Tailor-made health plan at the end of programme - Tailor-made energy diet (Full board) WEIGHT LOSS PROGRAMME 7 days / 6 nights - Medical check-up at beginning and end of programme - Health and wellbeing follow-up every two days - Personal trainer consultation to establish a personalised sport programme - 3 x Personal training sessions - 1 x Cellu M6 session - Therapeutic natural drinks according to prescription - Daily ‘Sport & Health’ activities: Pilates, yoga, aqua-energy/ strengthening, cardio, nordic walking, & cooking lessons etc - 1 x La Réserve Better Aging body treatment - 1 x Hydrotherapy session: bath, body wrap & shower jet - 1 x Therapeutic treatment: massage, reflexology, acupuncture, shiatsu & osteopathy - Tailor-made slimming diet (Full board) - Tailor-made health plan at the end of programme BEAUTY AND WELL-BEING BREAK 5 days / 4 nights - 1 x Crème de la Mer Excellence facial - 1 x Crème de la Mer Excellence body treatment - 1 x La Reserve Better Aging face massage - 1 x Manicure - 1 x Pedicure treatment - Daily ‘Sport & Health’ activities: Pilates, yoga, aqua-energy/ strengthening, cardio, nordic walking, & cooking lessons etc - 1 x La Réserve Better Aging body treatment - 1 x Hydrotherapy session: bath, body wrap & shower jet - Tailor-made ‘well-being diet’ (Full board) EXPRESS FIT & BEAUTY 4 days / 3 nights - 3 x Nordic walking sessions - 1 x Hydrotherapy session: bath, body wrap & shower jet - 1x Therapeutic treatment: relaxing massage, reflexology, acupuncture, shiatsu & osteopathy - 1 x La Réserve Better Aging body treatment - 1 x Crème de la Mer Excellence facial treatment - Daily ‘Sport & Health’ activities: Pilates, yoga, aqua-energy/ strengthening, cardio, nordic walking & cooking lessons etc - Tailor-made ‘well-being’ diet (Full board) We look forward to welcoming you to La Réserve Ramatuelle. La Réserve Ramatuelle – SPA www.lareserve.ch sparamatuelle@lareserve.ch Tel : + 33 4 94 44 94 44 April 2012 • GBM • 45

A M B A S S A D O R

G R O U P

The specialist in wellness, spa and golf in Czech Republic

MARIENBAD

Unique spa centre with wellness programme in Mariánské Lázně

HOTEL ESPLANADE SPA & GOLF RESORT

Karlovarská 438, 353 01 Marienbad, CZ Operator: tel.: +420 354 676 111, fax +420 354 627 850, e-mail: hotel@esplanade-marienbad.cz Room Reservation dpt.: tel.: +420 354 627 855, fax: +420 354 627 860, e-mail: reservation@esplanade-marienbad.cz

An oasis of peace in the center of Prague

Luxury Ambassador Thai & Wellness Club

PRAGUE

HOTEL AMBASSADOR • ZLATÁ HUSA Václavské náměstí 5-7, 111 24 Praha 1, CZ

HOTEL AMBASSADOR ZLATÁ HUSA Open daily

Operator: tel.: +420 224 193 111 Room Reservation dpt.: tel.: +420 224 193 876, fax: +420 224 226 167, e-mail: reservation@ambassador.cz Food and Beverage dpt.: tel.: +420 224 193 817, fax: +420 224 193 651, e-mail: banquet@ambassador.cz

from 11am till 10pm tel.: +420 224 193 833 fax: +420 224 193 651 e-mail: info@atwc.cz www.atwc.cz

MARIENBAD

HOTEL AGRICOLA SPORT & WELLNESS RESORT

Tyršova 31, 353 01 Marienbad, CZ Reception: tel.: +420-354 611 111, fax: +420-354 622 754, e-mail: hotel@hotel-agricola.cz

Perfect peace soul and body paradise

Luxury Brand Series – spa Resorts

Six Senses Spa at porto elounda DE LUXE RESORT Crete, Greece The Six Senses Spa at Porto Elounda is undoubtedly the most breathtaking spa in Greece, following the local architectural traditions with a touch of the latest trends and some very impressive contemporary art. Located in the western coves of Mirabello bay, it overlooks the resort’s golf course and the distant mountains, and encompasses all that is the world of Six Senses Spas. The reception area is a magical environment of water, stone, glass, wood and breathtaking murals that introduce an unforgettable spa experience as guests are greeted by the expert Six Senses staff and escorted to the spa’s focal point, the Tepidarium. Receiving its name from the Roman baths, the Tepidarium is a tremendous space that excites all the senses with water being the main motive force: flowing through a cascade, bubbling in the hydrotherapy swimming pool, glistening in the overhead glass pond, and dominating the view out of the enormous glass façade. The hydropool is filled with a host of water features like jets, cascades, bubble-beds and air-massage. Having both an indoor and an outdoor section, it is a unique experience to swim around it while admiring the distant seascapes and as the skin’s pores admit beneficial seawater ions. After the bath experience, the body is ready to immerse into the Thermal Suite. Besides the traditional Finnish sauna with dry heat, there is also the Saunarium with its more subtle heat and humidity and the Caldarium, the traditional Roman steam room. After these cabins, there’s nothing better than a dip in the ice-cold pond. The Ottoman Hammam experience at the Porto Elounda Spa is a whole ritual whose rejuvenating properties have been used for centuries. It starts with footbaths and continues with a cleansing whole-body shower and onto the main hot room where the skin softens in anticipation of a thorough body scrub. After the exfoliation comes a gentle massage with natural oils and thence the hammam’s relaxation area. 48 • GBM • April 2012

One of the unique features of the Six Senses Spa at Porto Elounda is the Therapy Suite, essentially a small private spa within the spa. Available for a few hours or for the whole day, it offers a private steam room, sauna, small hydropool, outdoor bubble-tub, and two treatment rooms with indoor and outdoor relaxation areas. All private treatment rooms in the spa are located on an independent level with a large Therapy Suite like the one on the reception level below, two Oriental Treatment rooms with floor mattresses, two Couple Treatment rooms with an outdoor bubble-tub, and two Thalassotherapy Suites. A set of four treatment rooms can be joined to create another suite: The Dry Float room for all kinds of wraps, the Cleopatra Bath for immersion in therapeutic concoctions of milk and honey, two wonderful massage rooms large enough for couples, as well as an outdoor bubble-tub. Even meals can be taken in the suites, in order not to spoil the feeling of security and privacy. Six Senses Spa at porto elounda DE LUXE RESORT 72053 Elounda Crete, Greece T:+30 28410 68000 F:+30 28410 68013 spa@elounda-sa.com www.portoelounda.com

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Luxury Brand SerieS – Spa reSortS

Masseria San Domenico Nr, Fasano, Puglia Masseria San Domenico Spa-Talasso & Golf Against the backdrop of the blue Mediterranean sky and sea, Masseria San Domenico lies only 500 metres from the Adriatic coast in the Puglia region of Italy, its whitewashed building standing amidst centenarian olive groves. The building itself goes back to the 15th century, when it was used by the Knights of Malta as a watchtower. Keeping intact the original structure of the “masseria”, it was lovingly restored in the early 1990s and opened as a 5 star boutiquestyle hotel in 1996. The centrepiece of the hotel is undoubtedly the magnificent irregular-shaped swimming pool encircled by rocks and plants, which stands amidst 100 hectares of olive groves and orchards. The pool is filled with naturally-filtered seawater, reflecting the philosophy of the hotel's thalassotherapy Spa which has been certified as Leading Spa in 2005 (the hotel is member of the Leading Hotels of the World since 2003). SPA-Thalassotherapy Masseria San Domenico is home to one of Italy's best thalassotherapy Spas. The Spa makes use of the rich seawater and seaweed found in the nearby Adriatic Sea, just 500 metres away. The word thalassotherapy comes from the ancient Greek word "thàlasa", meaning "sea". Although the actual word "thalassotherapy" came to be used in France from 1867, it was not until the first part of the 20th century that an individual called Renè Quinton began to study and compare the elements of sea water and those of blood plasma. He discovered that the chemistry between sea water and plasma is uniquely possible due to the temperature of human skin and its humidity conditions. Sea water is well known to be rich in potassium, magnesium and other vital

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minerals. These minerals are able to reach human blood cells by means of the natural osmosis process, and from there they help the regeneration and treatment of various ailments such as poor blood circulation and bone disorder. Thalassotherapy devotees have come to quote a case in point that the whale was able to survive the dinosaur only because of its sustaining natural environment, i.e. sea water. Seaweed is also extremely beneficial, with its vast concentrations of minerals and vitamins, indispensable for the improvement of human biological functions. For many of the Masseria's Thalasso treatments, seaweed is crushed and micro pulverized, then added to sea water for hydro massages and compresses. Seaweed and seawater produce an exceptional cocktail, giving an equilibrating, invigorating and detoxifying effect. Puglia's green sea is rich in plankton and has a very high salt percentage (40 gr per litre), only slightly inferior to that of the Red and Black Seas. The seawater used in the Spa is drawn from a deep underground stratum, sitting about 400 metres below the sea level. Seawater is completely purified by filters and heated once it arrives at the Spa. For example, the Spa's balneotherapy treatments use hot sea water at 37-38°C, and some balneotherapy treatments can be done directly in the sea where temperatures reach 20°C, similar to that of a cold bath. Some of the Masseria's Spa treatments include Douche d'Evian, a relaxing massage whereby two masseurs use special oils containing marine extracts, followed by a shower of warm sea water; Thalatherm, where the body is covered with a layer of natural mud and then warmed with seawater steam for 15 minutes, followed by a sprinkling of sea mist, thus encouraging the absorption of marine extracts and the

cleansing of the skin; Thalgojet, a water jet which is directed at specific zones of the body, excellent for improving blood circulation and Seaweed therapy, where the body is covered with a layer of crushed seaweed encouraging the absorption of the sea's natural elements. Brands used :Thalgo, Carita, Masseria San Domenico Olive Oil line Masseria San Domenico Nr, Fasano, Puglia Tel. +39 080 4827769 Fax +39 080 4827978 www.masseriasandomenico.com

Six Senses Con Dao Vietnam Balance your senses beyond all expectations. Six Senses Con Dao is the perfect place to escape to paradise. Six Senses Spas are world renowned and our spa at Con Dao is one of the finest in Vietnam. Located on Vietnam’s newest island destination, Con Dao is an untouched and breathtakingly beautiful archipelago only a 45 minute flight from Ho Chi Minh City. Six Senses Con Dao lies along 1,6 km of sandy beach, surrounded by dramatic mountain landscapes and stunning turquoise waters. Our spa offers four indoor treatment rooms, one Thai therapy room, three outdoor treatment salas, a Yoga and Meditation pavilion, a Juice Bar and changing facilities. Six Senses Spa therapists are internationally trained and passionate about ensuring guests experience exhilarating sensory journeys, through many forms of holistic healing and sense of wellbeing; through options of body and beauty care. Using only the highest quality naturally derived and ethically spa products, the comprehensive treatment menu promotes Six Senses signature therapies, traditional Vietnamese healing practices and incorporates the local herbs and flower essences to offer you a selection of SLOW LIFE treatments. Six Senses SLOW LIFE treatments support Six Senses’ commitment to SLOW LIFE: Sustainable, Local, Organic, Wholesome, Learning, Inspiring, Fun, Experiences. By utilizing ingredients, plants and herbs that are indigenous to the local area, we treasure local tradition as the very Essence of Six Senses to offer you a truly natural and authentic Six Senses experience.

The Six Senses Spa Pyramid represents the foundation and creation of the Spa experience at Six Senses Spas. The foundation of the experience is formed by three primary senses; sight, sound and touch. The second stage builds upon this experience by appealing to the more acute senses of taste and smell. The apex symbolizes the unique sensory experience of a Six Senses Spa. This pyramid is a testimonial. It visually represents that the spa experience may only be achieved once all five senses have been nurture. Our aim is to offer a new kind of spa experience, one that is truly holistic, tailor-made and designed to rejuvenate and energize, and ultimately provide the knowledge, tools and support that is required to create a better quality of life for all. Immerse yourself in the tranquil and luxurious surroundings of Six Senses Spa and indulge in treatments that are therapeutic and restorative for your total well-being- the unique experience of all senses elevated beyond expectations Six Senses Con Dao Dat Doc Beach, Con Dao District, Ba Ria Vung Tau Province, Vietnam Tel : +84 64 3831 222 , Fax : +84 64 3831 456 reservations-condao@sixsenses.com

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tHe iMportanCe oF ip LaW

e c n a t r o p The Im of IP Law ECTA And The Importance Of Intellectual Property Rights It goes without saying that the importance of Intellectual Property Rights (IPR) has grown considerably over the last decade. The introduction of the internet for commercial use some fifteen years ago has escalated this development. The possibility to obtain an exclusive right to an invention, a brand or a design, etc., continues to function as an important incentive for industry. In most cases an investment is only worthwhile if appropriate protection is obtained. Therefore, a well-functioning IP legal infrastructure is a necessary prerequisite for a successful economy as a whole, a matter more important than ever in the global competitive economy.

quite unique within the EU. Today it has close to 1,450 members.

IPRs as an important means for business To secure a patent for an invention is crucial. It gives the owner a possibility to cover the costs spent to make the invention and to secure the income envisaged. Designs serve the same purpose. Without trade marks it is impossible to distinguish goods or services of one company from another. Even though a domain name is technically considered to be an internet address, it clearly also has a distinguishing function. IPRs are in other words necessary means for businesses to achieve their goals.

ECTA played an active role in the drafting of the CTM Regulation. When the regulation entered into force in 1996 ECTA became, and still is, one of the most active observers of the implementation of the CTM system. At the time the so-called ECTA OHIM Link Committee was created to facilitate the cooperation between ECTA, the profession and the Office for Harmonisation in the Internal Market (OHIM). Over the years this cooperation has continued to be both regular and active.

The European Communities Trade Mark Association The European Communities Trade Mark Association (ECTA) wants to be of assistance in this respect. ECTA is a European association with a membership of IP practitioners, both from the free profession and from the industry. In this respect it is

52 • GBM • April 2012

The association was founded in 1980. At the time there was neither a Community Trade Mark system (CTM) nor a European Design system, and it was still uncertain whether anyone of them would become a reality. The initial aims of the association were to create an association of IP practitioners, whose main interest was focused on trade marks, whether from industry or the free profession, and to be involved in the creation of a European trade mark system. EU Trade Mark Regulation and the role of ECTA

Over the last 18 months ECTA, particularly with the assistance of its Law Committee, has closely followed and actively commented upon the Study on the Overall Functioning of the European Trade Mark System by the Max Planck Institute (the Study), which was published in March last year (MARKT/2009/12/D). The Commission is continuing the work based on the Study, and a legislative proposal on both the Community

trade mark regulation and the trade mark directive, is expected to be forthcoming within the coming months. To review and comment upon it will of course be one of the main priorities of the association and its members. Besides ensuring an adequate legal framework for the benefit of the business community, ECTA is also very concerned to secure the enforcement of those granted rights. Through its Anti-Counterfeiting Committee, it has closely participated in the review of the enforcement directive and customs regulation, as well as in the drafting of the ACTA agreement – the ratification of which it now supports and explains to the members of the EU Parliament. ECTA Anti-Counterfeiting Committee is also closely following the works of the European Observatory on the infringements of intellectual property rights. Governance of ECTA In addition to these, ECTA has several other committees on relevant matters such as; Geographical Indications, Harmonisation, Internet, Professional Affairs, and Publications – to name a few. They are all actively engaged in following the latest developments within the IP field. At present there are one hundred projects of various sizes and importance being pursued. If the Council, the Management or a Committee finds it important to affect the development, be it EU legislation or decisions to be made in the IP field, opinion papers will be written and directed to the appropriate authorities. ECTA has regular contacts not only with

OHIM in Alicante, but also, among others, with the EU Commission, the EU Parliament and World Intellectual Property Organisation (WIPO). In addition to these contacts, ECTA finds it important to cooperate with the National Patent and Trademark Offices (PTOs) and is regularly in touch with other Non Government Organisations (NGOs), particularly when a joint effort is considered important.

2010, in cooperation with OHIM, it arranged a number of workshops on the European trade mark system, and last year with WIPO on designs – the latter, a continuing cooperation that resulted in a further meeting held last month in Madrid. Among others, separate seminars were also arranged in February on Geographical Indications in Alicante and on Genuine Use and Class Headings in Brussels.

ECTA is governed by an Annual General Meeting and a Council – the latter representing each EU Member State and convening twice a year during the autumn and summer. In addition to these bodies there is a Management Committee handling the running matters between the meetings. This Management Committee consists of the President, two Vice Presidents, the Secretary General and the Treasurer. ECTA also has a Legal Coordinator in its employment, responsible for preparing all matters related to IP Law.

This year the Annual Conference will be held in Palermo in June with, among other highlights, a China workshop. The Council meeting is being arranged in Amsterdam in October and next year ECTA will be convening in Bucharest and in Malta. In 2014, in close cooperation with OHIM, the Annual Conference will be held in Alicante.

ECTA Today ECTA is actively engaged in arranging workshops and seminars around Europe. In

Helsinki (Finland) is Secretary General and Jaroslaw Kulikowski from Warsaw (Poland) is Treasurer. ECTA Secretariat Should you wish to join ECTA as a member or obtain some additional information about its activities, please visit the ECTA website (www.ecta.eu) or get in touch with Ewa Grabiak, Legal Coordinator, or Cathy van Vuuren, Administrative Secretary, at the ECTA Secretariat in Brussels, Rue des Colonies 18/24, BE-1000 Brussels, Belgium, tel. +32/2 513 52 85. ECTA will be very pleased to serve you.

Currently, the President is Annick Mottet Haugaard, a lawyer who specialises in IP litigation, based in Brussels (Belgium). However, in June she will be succeeded by Domenico de Simone based in Italy, for a two-year period, before being replaced by F. Peter Müller, a German Trade Mark Attorney from Munich. Dr Max Oker-Blom from

Max Oker-Blom, ECTA Secretary General, FI Annick Mottet Haugaard, ECTA President, Partner at Lydian, BE

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Firm Profile Jackson, Etti & Edu (‘the Firm’) is a full service Nigerian law firm with an internationally renowned Intellectual Property (IP) practice. Headquartered in Lagos – the financial nerve centre of the country – and with three other offices (including an international office), the Firm is able to provide services throughout the African region and beyond. The Firm’s clientele includes a broad spectrum of local and international blue chip firms. From individuals and small private companies – to major multinationals and conglomerates – the Firm has a reputation for providing high quality services, tailored to the specific commercial goals, constraints and concerns of each client. This is indeed a major driver to ensuring that client objectives are achieved in the most efficient and costeffective way. Services We offer advice on all aspects of Intellectual Property Law and Practice including: prosecution, management and protection of Trademarks; Patents; Designs & Copyright; Anti-counterfeiting; IP Litigation; IP Audits; Domain Names and Commercial IP issues (licensing, franchising, distributorship etc). As an IP practice, we offer advisory services to the Federal Government of Nigeria regarding IP policies. We also offer advice and reviews of IP laws, and regional perspectives on IP related matters. Other ancillary services available include product registration for NAFDAC (The National Agency for Food and Drug Administration and Control), SON (Standard Organisation of Nigeria) and NOTAP (National Office for Technology Acquisition and Promotion). One of our IP Partners is a World Intellectual Property Organisation (WIPO) consultant, who regularly offers advice on a myriad of IP related issues. Another partner is the only Nigerian member of the WIPO Domain Names Dispute Resolution Panel. Awards The Firm has won many awards, with highlights that include: the 2011 ‘IP Firm of the Year’ at the Nigerian Legal Awards (organised by ESQ and BusinessDay newspaper); the 2011 Acquisition International Legal award for ‘Nigerian IP Law Firm of the Year’ (organised by Acquisition International magazine in the UK); and ‘IP Law Firm of the Year in Nigeria Award’ at the 2011 Finance Monthly Law Awards (a renowned UK legal publication).

In 2011, we were also one of eight worldwide firms shortlisted for the ‘IP Law Firm of the Year in an Emerging Market Award’, by Intellectual Property Magazine (IPM). At the November awards ceremony held in London, the Firm was ‘Highly Recommended’. Achievements Between 2001 and 2011, Jackson, Etti & Edu was rated as a ‘TIER 1’ firm for contentious and non-contentious trademark and patent work in Nigeria, by the ‘Managing Intellectual Property’ annual survey. In 2010, two Partners in the IP department were selected to feature in the second edition of ‘Who's Who Legal: Nigeria’, which identified Nigeria's leading business lawyers (Law Business Research Ltd: London: UK). One of our Partners was nominated as one of the pre-eminent individuals in the world by expert guides, in the 2010 inaugural edition of ‘Guide to the World's Leading Emerging Markets Practitioners’. In April 2011, two Partners were recognised amongst ‘Nigeria’s 50 most influential women in the legal profession’, by BusinessDay newspaper.

RCO Court, 3-5 Sinari Daranijo Street, Victoria Island, Lagos Branch Offices: Abuja, Ikeja, Ghana Tel: +234-1-4626841, 1-2806989, 1-7904276; 1-7732754 Fax: +234-1-2716889, 2623702 jacksonettiedu@jacksonettiandedu.com www.jacksonettiandedu.com Lookman Durosinmi-Etti (durosinmi-etti@jacksonettiandedu.com) Uwa Ohiku (uwaohiku@jacksonettiandedu.com) Chinyere Okorocha (chinyereokorocha@jacksonettiandedu. com) Membership: INTA, FICPI, AIPPI, ITMA, APAA, CTA, WIPO, IPLAN, IBA, NBA Number of Partners: 6 Total IP Professionals: 18 Total Non Professional: 22 Year Established: 1996 Languages: English, French, Igbo and Yoruba

Consultancy In August 2002, Jackson, Etti & Edu advised the then Federal Minister of Commerce on the pros and cons of Nigeria becoming a full member of the African Regional Intellectual Property Organisation (ARIPO) in a report entitled: ‘Should Nigeria join ARIPO…an Industrial Property Practitioner’s point of view’. The Firm was also commissioned on behalf of the Federal Minister of Commerce & Industry, to prepare a report on revamping the operations of the Trademarks, Patents & Designs Registry. This report was entitled: ‘THE ROADMAP 2008.’ Members of the Firm have spoken and delivered papers at numerous international IP focused events. One of our Partners acted as consultant to the United Nations Development Project (UNDP) on Intellectual Property matters in Nigeria. Another Partner was appointed in 1996 as an arbitrator to WIPO, and has been consistently been called up to advise in various capacities on a wide range of IP issues. We have a Partner who is a member of the Committee of Experts, and was appointed in April 2011 by the Federal Science & Technology Minister, to review the Draft Science, Technology & Innovations Policy’s compliance with Intellectual Property. Another Partner is currently the chairperson of the IP Committee of the Section on Business Law of the Nigerian Bar Association. We also have a Partner who is a member of the Stakeholders Sub Committee, which was set up in respect of the Online Registration of Trademarks, Patents & Designs (for the Federal Ministry of Commerce in Abuja, Nigeria). Media

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One of our Partners featured in the December 2011 edition of ‘Expert Guide: Intellectual Property’ by Corporate LiveWire magazine in the UK, in an article entitled: ‘Franchising & IP Protection – A Nigerian Perspective’. In 2011, three Partners featured in the September edition of Finance Monthly Law magazine. One of our Partners in the IP department was among the 556 world’s leading Patent lawyers to be nominated in the 2011 and 2011 editions of ‘The International Who's Who of Patent Lawyers’. Two Partners in the IP department were nominated in the ‘Guide to the World’s Leading Trademark Law Practitioners 2012’ (Legal Media Group: Euromoney Institutional Investor PLC). In October 2011, a Partner featured in Lawyer Monthly magazine, in an article entitled: ‘Global Review of Intellectual Property – Nigeria’. In 2011, another Partner was the sole representative for Nigeria in an Acquisition International magazine feature entitled: ‘Protecting Intellectual Property in M&A Transactions’.

Diagnostic Tests and

UN ITE D ST AT ES Gene Patents: Catching up on the Intellectual Property Debate

Intellectual property is a critical value determinant for the Biotechnology sector, a lucrative sector characterised as constantly evolving, research intensive, prone to high risk and having relatively low cost barriers for product imitation. Biotech companies deal with the development of products and services for several industries, including medicine, agriculture and materials science. It is not surprising that in medicine and healthcare, biotechnology has its most profound direct impact and finds its largest market. Present day drug discovery and therapeutic interventions heavily rely on genetic analysis and manipulation. In fact, commercial biotechnology traces its inception back to June 16, 1980, when the United States (U.S.) Supreme Court ruled that a genetically modified microorganism as described in US Patent 4,259,444 was eligible for patenting in the case of Diamond v. Chakrabarty, 447 U.S. 303 (1980). However, patenting inventions derived from the human genome has remained a highly contentious topic. A number of cases before the U.S. Court of Appeals for the Federal Circuit (CAFC) and the U.S. Supreme Court have highlighted aspects of the ongoing debate involving diagnostic tests and gene patents. One side protests that patenting DNA is an impediment to future genetic research and is immoral and unethical, while the other side believes that disqualifying such inventions as patent eligible material is potentially devastating to biotech companies and the U.S. economy in general. With the U.S. patent system undergoing major reform, this debate will affect the fundamentals of patent law and its interpretation in the life sciences. Two cases of particular interest are Association for Molecular Pathology v. U.S. Patent & Trademark Office, 653 F.3d 1329 (Fed. Cir. 2011), ‘the Myriad case’ and Mayo Collaborative Services v. Prometheus Laboratories Inc., 566 U. S. ____ (2012), ‘the Prometheus case’. In the Myriad case, the CAFC affirmed the right of Myriad Genetics to patent two ‘isolated’ human genes BRCA1 and BRCA2 - mutations in which are

linked to susceptibility for breast and ovarian cancers. It was put forth that Myriad’s exclusive license on the BRCA patents and hence monopoly on the BRCA genes permits it to set the terms and cost of testing, making it impossible to access alternate tests or get a comprehensive second opinion about the results. Pursuant to section 27 of the LeahySmith America Invents Act (AIA), the United States Patent and Trademark Office (USPTO) is directed by Congress to study aspects of the provision of independent, confirming genetic diagnostic test activity where gene patents and exclusive licensing for primary genetic diagnostic tests exist. The USPTO is to report the findings of this study to Congress by June 16, 2012. The conduction of the study under Section 27 of the AIA segues from the decision of the CAFC in the Myriad case and the ethics associated with exercising patent rights commercially. Though a valid discussion, it would seem that the considerations of Section 27 of the AIA relating to level of medical care, the interpretation of testing results, the performance of testing procedures and cost and insurance coverage are beyond the constitutional remit of the USPTO. Such matters are not proper considerations of the USPTO alone; but should be considerations of the Department of Health & Human Services, and the Food & Drug Administration. In essence such considerations are not patent law issues but rather health care or health reform issues. Compelling existing patent and license holders to allow for independent second opinion genetic diagnostic testing would be an uncompensated taking in violation of the 5th Amendment to the U.S. Constitution— especially as to patents that have issued or will issue from patent applications already pending. Such a watering down of the protection afforded by patents pertaining to isolated nucleic acid molecules, may be premature and not warranted by the lone situation of the Myriad case. It is important to note that the United States is also an assignee on the BRCA patents and if there are really serious issues with how Myriad

Vedder Price P.C. Thomas J. Kowalski Shareholder Tel: 212-407-7640 tkowalski@vedderprice.com www.vedderprice.com

was enforcing the BRCA patents then the U.S. Government should employ already existent laws; namely, March-In rights under the Bayh-Dole Act or Government authorisation to use patent rights pursuant to Title 28 of the United States Code (U.S.C), Section 1498. It may be opined that in the Myriad case the CAFC correctly held that claims to isolated DNA are patent-eligible subject matter under Title 35 U.S.C, Section 101, and that method claims directed to only ‘comparing’ or ‘analysing’ DNA sequences are patent ineligible because they cover only abstract, mental steps. Embracing a similar interpretation of patentable subject matter, on March 20, 2012, a unanimous U.S. Supreme Court overturned the CAFC ruling in the Prometheus case and said that “to transform an unpatentable law of nature into a patenteligible application of such a law, one must do more than simply state the law of nature while adding the words ‘apply it’”. It will be interesting to see how the decision in the Prometheus case affects the report due to Congress in June based on the study under Section 27 of the AIA. With the whirlwind of activity, both at the USPTO and in the Courts, it appears that the debate involving diagnostic tests and gene patents is far from settled. The Intellectual Property group of Vedder Price P.C. is experienced in biotechnology, pharmaceuticals, agriculture, chemical and medical apparatus litigation, patent prosecution, licensing and counselling.

Co-Author: Smitha B. Uthaman, Ph.D. Scientific Advisor Tel: 212-407-7646 suthaman@vedderprice.com www.vedderprice.com

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Exclusive licences in the aftermath of the Premier League case In February this year, pub landlady Karen Murphy eventually succeeded in overturning her conviction by Portsmouth Magistrates of two offences under section 297(1) of the Copyright, Design and Patents Act 1988 (the ‘CDPA’). The High Court’s judgment quashing those convictions followed a preliminary ruling by the Court of Justice of the European Union in October of last year, where it ruled on a number of questions that had been referred to it regarding the interpretation and application of (and the interplay between) the CDPA, relevant EU broadcasting and intellectual property Directives, and the free movement and competition Articles of the Treaty on the Functioning of the European Union (‘TFEU’). The focus for much of the ensuing press coverage, particularly that which immediately followed the Court of Justice’s ruling, has been on the consequences for rights holders and broadcasters. Will the FA Premier League have to change the way it sells broadcast rights? Will BSkyB find a hole blown in its revenues and have to reduce its investment in football coverage? These are perfectly valid questions, but the case is of wider significance for all businesses that rely on international licensing structures across Europe. Amidst its responses on the technical questions referred to it, the Court was making it quite clear that it would not tolerate the artificial partitioning of the common market, even where based on intellectual property rights. Whilst its decision did acknowledge that the FA Premier League was entitled to take some action to protect its rights – specifically in respect of material that is protected by copyright and would be communicated to a new public audience without its authorisation – the message in respect of contractual restrictions was less encouraging for rights holders. Restrictions that make the interpenetration of national markets more difficult may fall within the scope of Article 101(1) TFEU, and will therefore be prohibited if they do not satisfy the exemption criteria under Article

101(3). If those restrictions create a higher territorial barrier than would be afforded by the underlying intellectual property right – which might be presumed when they add value to the exclusivity granted under a licence – then those criteria are unlikely to be satisfied, unless another compelling public interest justification can be established. In many respects, the Court of Justice wasn’t actually saying anything new. Most businesses involved in these types of agreement will recognise that EU competition law typically prohibits the use of contractual restrictions to ensure absolute territorial protection. Many involved in the licensing of patents or of software copyright, will have encountered the Block Exemption for Technology Transfer Agreements, and will therefore be familiar with the extent to which particular territorial restrictions may be permissible in that context. Nonetheless, the judgment does serve as a useful reminder that, for the territorial restrictions in a licensing structure to be robust, they must take account of the particular nature of the rights that are being licensed. The challenge for companies that engage in these arrangements – rights holders and prospective licensees alike – is to ensure that their licensing agreements are fully compliant with applicable EU law before they are entered into. In case there is any doubt as to how important this assessment can be, it should be noted that the consequences of getting it wrong would include all of the offending contractual restrictions being void and unenforceable from the outset. This could leave a rights holder in a position where its licensees throughout Europe are entirely unrestricted with respect to the territories into which they might sell. Furthermore, this wouldn’t necessarily be good news for the licensees, as they would immediately become vulnerable to unrestricted competition between themselves. However desirable competition might be in a general sense, its sudden imposition within a network of exclusive licensees would be potentially damaging, bringing with it the risk of licensees in smaller or less lucrative territories suddenly being swept aside by

Macfarlanes LLP Malcolm Walton Partner Tel: +44 20 7849 2575 malcolm.walton@macfarlanes.com www.macfarlanes.com

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UK/E U their larger rivals. Such risks can be avoided through careful planning and close attention to the subject matter of the rights in question. This exercise doesn’t require a crystal ball in order to foresee what the next decision coming out of Luxembourg might be, but should instead reflect a balanced approach that takes account of EU competition and free movement laws. Tailoring contractual restrictions so that they apply in respect of specific, identified rights and are justifiable in that context is the approach that is most likely to deliver a robust and defensible licensing structure. In practice, this is likely to mean that a rights-holding licensor will end up with a more limited set of contractual controls over its licensees than it might originally have hoped for, and that it might have to devote more resources to putting its licence structure in place than it would originally have envisaged. However, this should ultimately deliver a network of exclusive licences that can be relied upon to stand up to legal scrutiny, rather than one that appears to be more commercially attractive but which ultimately fails to deliver because it cannot be enforced. Malcolm Walton is a partner in the Commercial & Competition group at Macfarlanes LLP.

The Importance of Copyright for Businesses Although it tends to be overlooked, copyright is potentially an economically valuable intellectual property right for all types of businesses, be they modern or more traditional.

would not be legitimately justified. This decision is in line with the European Court of Justice's Infopaq judgment (C-5/08).

What does copyright protect?

As a general rule, copyright protects the author of the work, namely the natural person that created it. It is therefore important to check that a company's employment contracts and service agreements contain an IP clause which provides for the assignment to the company of all copyright in created works, in the broadest sense possible. In this regard the law provides precise rules, which must be respected. However, it should be noted that there is a significant exception for computer programmes; in the absence of a provision to the contrary, copyright and all other ‘economic rights relating to computer programs created by one or more employees or agents in the performance of their duties or further to the employer's instructions’ are deemed assigned to the employer.

Copyright confers automatic protection on an original literary or artistic work that takes a certain form. The term ‘literary and artistic works’ is interpreted broadly to include not only works of literature and art, but also amongst other things; architectural plans, software codes, furniture, packaging and shapes of products, meeting reports and advertisements. The requirement that the work must take a certain form means that a mere idea cannot be protected by copyright. The Belgian Supreme Court recently revisited the originality requirement for copyright protection. In Artessuto v B&T Textilia of 26 January 2012, the Supreme Court held that in order to be considered original, a work should constitute the author’s own intellectual creation. In contrast to its earlier case law, the Court stated that the work need not ‘bear the stamp of its author's personality’ and specified that a decision based on this requirement

Who benefits from the protection?

What are the advantages of copyright over other intellectual property rights? This question is important as in certain cases a creation can be protected by different types of rights. Thus, for example, software is covered by copyright but can also benefit from patent protection, provided that the application of the software has a technical effect. The same holds true for slogans, logos or product packaging, which qualify for copyright protection but can also benefit from trademark protection if they meet certain conditions. One important advantage of copyright protection is that it is automatic, so no investment is required to obtain or maintain it. Moreover, thanks to the effect of various international conventions, such as the Berne Convention, copyright protection extends to the majority of the world. Conversely, both patents and trademarks require the filing of an application with the competent national or international registration organisations. Another advantage of copyright protection is its duration – seventy years from the author's death.

BELG UIM Finally, it is important to keep in mind that, given the absence of a register of all copyright-protected works, it is not possible to verify in advance if a work is protected or not. Hence, the best way of avoiding the risk of reproducing a protected work is not to copy original works. What precautions should be taken to protect copyright? Firstly, it's advisable to obtain proof of the date of creation of the work. Such proof can, for example, be obtained by filing a copy of the work with a notary. Furthermore, contracts with the legal entities (for example, sub-contractors) and natural persons that created the work should be properly managed. In particular, it is important to provide for the assignment of copyright and other IP rights. The rules for works created by employees or in the performance of a work for hire are more flexible, provided the person that placed the order is engaged in a non-cultural activity or advertising. The contract should also contain sufficient guarantees, notably with regard to the fact that the assigned or licensed works do not infringe third party rights. If a third party is authorised to use or reproduce a protected work (for example, a manufacturer to whom the author grants the right to produce and sell a product), it is advisable to sign a license agreement in due form. The agreement should cover the following points in particular: scope of use; duration of use; right to sublicense (if applicable); ownership of copyright in adaptations/translations; means of remuneration; termination of the agreement; applicable law; and lastly, jurisdiction. In summary, there are definitely advantages to copyright but good management, in particular of upstream and downstream contracts, is required.

NautaDutilh Florence Verhoestraete and Patrice Vanderbeeken Tel: +32 (0) 2 566 80 00 Florence.verhoestraete@nautadutilh.com Patrice.vanderbeeken@nautadutilh.com www.nautadutilh.com

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DR-C AFTA Has Modernised IP Legislation In The Country In 2007, the Dominican Republic, the United States and several Central American countries entered into a free trade agreement (‘DR-CAFTA’). As a result of the adoption of the DR-CAFTA, the country has improved its system for the protection of intellectual property, adopting international standards such as those contemplated by the Agreement on Trade-Related Aspects of Intellectual Property Rights. This agreement is, among others, part of the World Trade Organisation system; the treaty on PatentRelated Cooperation (‘PCT’); the Budapest treaty on International Recognition of the Deposit of Microorganisms for the Purposes of Patent Procedure; the International Convention for the Protection of the New Varieties of Plants; the Berne Convention; and the Universal Copyright Convention. More recently, the Constitution adopted in 2010 recognises intellectual property rights as fundamental rights. This is demonstrated by Article 52 of the Constitution: ‘… recognises and protects the right to the exclusive property, for the term and in the manner determined by law, of the scientific, literary and artistic works, inventions and innovations, denominations of origin, trademarks, trade names and other products of the human intellect’. The Dominican Republic´s Industrial Property Law (‘Law No. 20-00’) recognises the patentability of inventions in all technology fields for products or procedures. However, there are certain exceptions to this general principle, such the exclusion of computer software and methods of treatment from patent protection. Although patents are valid for 20 years, the patent term may be adjusted or compensated due to unreasonable delays in firstly, the process of examining or granting the patent (also known as ‘patent term adjustment’), or secondly, the issuance of the marketing approvals for the first commercialisation of pharmaceutical products protected by patent in the Dominican territory (also known as ‘patent term restoration’). The adjustment or compensation may be requested for a maximum of three years in cases of delay of more than five years; in the granting of a patent more than three years from the date of the merit examination request; or when there is a delay of more than two and a half years in the granting of the first marketing approval for a patented pharmaceutical product. The PCT coming into force has significantly increased the number of patent applications in the Dominican Republic. The convenience of filing an international application, and only subsequently filing a national phase when the applicant has confirmed his interest

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in protecting his invention in the country, has increased the number of patent applications received by the administrative agency in charge of the grant and other administrative actions regarding Dominican Republic industrial property matters (‘ONAPI’ as per its acronym in Spanish) by more than 50%. ONAPI´s decisions are subject to judicial review, and recourse to the Supreme Court is also possible.

DOM INIC AN REPU BLIC Headrick Rizik Alvarez & Fernandez Mary Fernández Rodríguez Senior Partner Tel: (809) 473-4500 Mfernandez@Hrafdom.Com Www.Hrafdom.Com

As a result of the DR-CAFTA entry coming into force, patent linkage and data protection are also available for pharmaceutical products. Utility models and industrial designs are protected by Law No. 20-00: Utility models are granted for 15 years, while industrial designs are granted for five years, with the possibility of being extended for two additional five-year periods. Patents and related rights may only be enforced through civil lawsuits. However, monetary compensation, and obtaining an injunction prohibiting a defendant from engaging in further acts of infringement is permitted. Trademarks for products or services may be registered for 10 years and subsequently renewed for additional 10-year periods. Trade names, designs, emblems, geographical indications, appellations of origin, as well as collective and certification marks are now available. Protection of such well-known marks are recognised as the country has upheld the Paris Convention. On December 13th, 2011 the Trademark Law Treaty (‘TLT’) came into effect. Consequently it is no longer necessary to demonstrate evidence of use of a mark, which renders sworn statements unnecessary for trademark renewals. As TLT´s provisions are not applicable to trade names, emblems and evidence of use are still required when filing a renewal. Furthermore, the law grants third parties the possibility of requesting cancellation of a mark after three years without use. The national Copyright Law establishes standardised rights contemplated in both the Berne Convention and the Universal Copyright Convention. National treatment, automatic protection and independence of protection are also established in the Dominican legislation. Authors enjoy copyright ownership during their lifetime, and their successors for 70 years following their death. DR-CAFTA provisions include border

measure provisions to protect against trademark and copyright infringements. Both of these protections may be enforced through civil as well as through criminal actions – the latter including the possibility of a prison sentence of up to three years and fines. Civil damages may also be claimed. Studies show that reforms promoting a strong intellectual property system can be directly correlated to an increase in direct foreign investment (Lo, Shih-Tse: ‘Strengthening Intellectual Property Rights: Experience from the 1986 Taiwanese Patent Reforms’). Therefore the Dominican Republic, by continuing to modernise its intellectual property protection system while benefitting from economic and political stability, aims to attract more foreign investment.

Why France is a good forum for preliminary injunctions in patent The market of innovation is changing fast Preliminary injunctions are an essential means to enforce patent rights. Their importance has been acknowledged by the European Directive 2004/48 on the Enforcement of Intellectual Property Rights, which provides that they must be available in all the Member States of the European Union. Some rules applicable to the grant of preliminary injunctions have been harmonised by the Directive. However, this has not put an end to differences of regime between Member States. In particular, the variations concern the conditions to obtain preliminary injunctions, the scope of the measures granted, as well as the general procedural rules applicable. As a result, some national courts may be more favourable than others to the grant of preliminary injunctions. Our experience of patent litigation indicates that France is a very good forum to obtain preliminary injunctions, for at least three main reasons: Firstly, the grant of preliminary injunctions is submitted to minimum conditions. Secondly, the courts tend to grant broad measures, and thirdly, decisions can be obtained very fast when necessary. These advantages are illustrated by the recent case law of the Paris First Instance Court (hereafter ‘Paris Court’). With exclusive jurisdiction for any actions concerning patent rights, this court has developed a broad expertise in patent matters. Minimum conditions In France, preliminary injunctions are granted when two conditions are satisfied: firstly, the claimant must provide reasonable proof of an actual or imminent infringement, and secondly,

there must be no serious doubt on the validity and ownership of the patent rights. These conditions correspond to the minimum provided by Article 9 of the Directive. In many Member States such as Germany, the United Kingdom and the Netherlands, preliminary injunctions are submitted to one or several additional conditions. Urgency is often required: the right holder must establish that the postponement of the injunction would cause it an irreparable harm. In addition to this, some national courts apply a balance of convenience : they assess, in the light of all the circumstances of the case, whether a preliminary injunction is the most adequate remedy. Such conditions are not required in France. Although the balance of interests may be taken into consideration, it is not a requirement under French law. Urgency is not a requirement either. Broad Measures Where an actual or imminent infringement is established, broad prohibitions from manufacturing, importing, offering for sale, marketing, using and holding for the abovementioned purposes, infringing products, are automatically ordered by the Paris Court, often under a penalty. Furthermore, when the claimant demonstrates their need, it can obtain powerful measures such as the disclosure of evidence and information, the recall of the products from the distribution networks and provisional damages. Only the measures causing an irreparable harm are not ordered, such as the publication of the order and the destruction of the goods, except when specific circumstances justify them. Other national courts may be more severe. In the United Kingdom, for instance, the grant of a preliminary injunction is not automatic and may be replaced by a compulsory licence. In Italy, it is very difficult to obtain the recall of products from distribution networks. Accelerated proceedings The usual timeline of inter partes preliminary proceedings before the Paris Court is of one to two months from the initiation of the action to the decision, but if special circumstances require a faster decision, this is always taken into account.

matters

FRAN CE

Allen & Overy LLP Laëtitia Bénard Partner Tel: 00 33 1 40 06 50 33 laetitia.benard@allenovery.com www.allenovery.com

summons, and the preliminary injunction was rendered a week later, just before the date on which Mylan had announced it would launch its products, this efficiency preventing the infringing products from being put on the market. In very special circumstances, the Paris Court also accepts to grant preliminary injunctions ex parte (i.e. without the defendant having been heard), where any delay would cause irreparable harm to the right holder. The remarkable efficiency of the Paris Court has been recently illustrated in the Novartis v. Sanofi (Valsartan) case. Sanofi had decided to make a launch at risk of its generic product whereas the extended SPC for Novartis' original product expired three weeks later. The ex parte order was granted in 24 hours, and was confirmed inter partes, upon appeal of the defendant, in 48 hours, prohibiting further sales of generic products and ordering the recall of all the products already on the market. Conclusion Companies that are faced with the infringement of their European patents in several countries (including France) are invited to go to Paris if they are looking for quick and efficient remedies. The results we have obtained in recent years indicate that the courts are favourable to broad preliminary injunctions when minimum conditions are met and that they lead the way on many complex issues. As a result, they may set the stage for similar decisions in other European jurisdictions.

For instance, in the Merck v. Mylan (Losartan) case, the trial hearing took place three days after the service of the writ of

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Intellectual Property Law - Where Practical Experience Meets Extensive Networking Spoor & Fisher is a specialist law firm that provides solutions across the full spectrum of intellectual property. Initially established in 1920’s South Africa, and then in Jersey during the 1970’s, it has since become a successful firm of over 80 lawyers and intellectual property specialists, supported by 220 paralegal and administrative staff. Spoor & Fisher assist clients in obtaining and enforcing intellectual property rights around the world, through close relationships with overseas intellectual property agents and practitioners. We have close ties with registries and associates throughout the African continent, the Caribbean and the Middle East. While our large team gives us a diverse skill set to draw upon, it also enables us to offer the highest level of expertise. A number of partners have joined us, after having practiced with distinction in Europe and North America. We also have a proud tradition of being involved in many of the leading patent, trademark and copyright cases in South Africa and the continent. As specialists in our field, we have authored many of the leading textbooks on intellectual property law in this part of the world. Spoor & Fisher comprises two main fields of

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practice, namely patents (including electrical, electronics and software)/designs, and trademarks. The firm also has commercial and litigation departments, which straddle the main fields of intellectual property practice. Apart from the main focus of filing and maintaining of patents and trademarks across the African continent, our firm has also seen significant growth in litigious matters. As we’ve become increasingly involved in such matters here and in the Caribbean and the Middle East, we’ve built up substantial expertise in these jurisdictions. Where possible, Spoor & Fisher deals directly with local trademark and patent registries. However, we also have our own offices in several countries, as well as an extensive network of local employees, as well as other contacts and associates. As we utilise our ever-increasing network of specialist agents, we ensure superior filings throughout the continent. Recently, Spoor and Fisher opened offices in Cameroon to practice before the African Intellectual Property Organisation (OAPI). Currently the member states are: Benin, Burkina Faso, Cameroon, Central African Republic, Chad, Congo, Equatorial Guinea,

SOUT H AFRI CA Gabon, Guinea, Guinea Bissau, Ivory Coast, Mali, Mauritania, Niger, Senegal and Togo. Spoor & Fisher’s anti-counterfeiting unit has become well known and highly regarded throughout Africa. In this time, our firm has developed comprehensive expertise in all legal and practical aspects of anticounterfeiting law enforcement. With its years of practical experience and an extensive network across the continent, Spoor & Fisher is ideally placed to assist both local and overseas clients in securing patent and trademark protection throughout Africa, the Caribbean and the Middle East. Spoor & Fisher Craig Kahn phone: 27 12 676 1110 Fax: 27 12 676 1100 c.kahn@spoor.com

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CariBBean FoCuS

Caribbean Focus Caribbean Association of Banks Inc (CAB): Its role in the Financial Services Industry in the Caribbean Introduction A recent World Bank (2012) report on the financial development of Latin America and the Caribbean notes that the financial services industry in the Caribbean has transitioned from a mostly bank based model to a more complete and interconnected model, in which bond and equity markets have increased in both absolute and relative sizes; institutional investors (mutual funds, pension funds, insurance companies, etc.) play a more central role; and the number and sophistication of participants have increased. Simultaneously, the strengthening of monetary management has allowed an important shift in the nature of financing, toward the longer term and into the local currency. Nonetheless, the region’s financial systems remain underdeveloped. 62 • GBM • April 2012

The economies of the Caribbean countries have been impacted by the turbulence of the global economy. It has been noted by the Eastern Caribbean Central Bank that there has been a prolonged decline in demand triggered by low rates of growth, high level of unemployment and sovereign debt, fiscal imbalances and financial sector fragility experienced by the United States, the United Kingdom, Japan, and the European Union (ECCU Economic Review, 2011). The Caribbean economies are firmly connected to the United States and Europe. As a result of the global recession, the Caribbean has experienced a decline in remittances, and foreign direct investment. In addition, there has been a decline in tourism receipts, impacting heavily on the GDP of some of the countries. Rising oil and gas prices has also impacted revenue negatively. Consequently, growth prospects for the Caribbean continue to be slow. Notwithstanding the above economic challenges, there are investment opportunities for the financial services sector in the following areas, inter alia: • Infrastructural development

• Transportation (air and sea) • Information, Communication, and Technology • Renewable energy • Research and Development • Education • Agro-business • Green Tourism The Role of the Caribbean Association of Banks Inc (CAB) Considering the above observations on the region’s financial services industry, what then is the role of the Caribbean Association of Banks Inc (CAB) which was founded in 1974? The CAB supports and serves the Caribbean banking and financial services community. The mission of CAB is to advance the interest of member institutions through advocacy, networking, provision of training and other solutions, to strengthen the Caribbean’s financial sector. The CAB currently represents 58 members comprising General, Service and Associate.

It serves as a valuable source of information through publications, seminars and conferences. Through the work of the CAB, its membership is kept up-to-date on legislative, regulatory and market developments that influence or impact the future of the banking and financial services industry. CAB provides industry relevant information, educational and training support and effective advocacy to support members with efficient and effective operation of their respective institutions. Consequently, the CAB is therefore a strong collective voice for members. Services Within the financial services industry, the CAB provides an excellent avenue for networking among professionals, such as accountants, lawyers, software vendors, bank officials, and large institutional lenders such as the IFC, AFD and the IMF. Moreover, capacity building and training opportunities, information sharing, gathering and advocacy, are provided to members through the CAB. As a result of networking, professionals are given the opportunities to optimize the growth prospects of their businesses. The CAB annual conference provides the ideal forum for Caribbean banks and financial institutions faced with daunting challenges, namely the rapidly changing marketplace, competition from unlikely sources, lack of resources, tough economic circumstances, rapid technological developments and lastly, an uncertain return on investment to gain first-hand experience. Here they can share best practices and be inspired by practical ideas from both seasoned bankers who are succeeding in today's marketplace and dynamic industry experts. The annual conference has over the years afforded members an ideal environment to initiate business development

contacts, many of which have blossomed into successful business endeavours. It is these exchanges among members, within and between countries that broadens knowledge and experience, providing individual opportunities for growth and development. The CAB serves to lobby and negotiate on behalf of its members on legislative and regulatory matters regional and international (FATCA, AML/CTF etc), pertinent to the financial services industry. The CAB has observer status and access to CARICOM’s Council of Finance and Planning (COFAP); through its lobbying and negotiation functions, the CAB provides its membership extended and highest avenues to influence policy decisions impacting the industry. Resources The CAB serves as a valuable resource for information, through publications, seminars and conferences. Regular communication enables its members to stay up-to-date on legislative, regulatory and market developments that may influence or impact the current and future of the banking and financial services industry. Information deficits related to, for example, US legislation on US citizens’ foreign accounts, may result in serious negative consequences for the effective operationalisation of the financial services industry in the region. Hence, the role of the CAB in addressing information gaps for strengthening the enabling environment for the financial services sector is a significant added value to its members.

Caribbean Association of Banks Inc Chakiro Court, Vide Bouteille P O Box CP 5404 Castries, Saint Lucia Telephone: (758) 452 2877 Facsimile: (758) 452 2878 cab@candw.lc www.cab-inc.com

The CAB established the Caribbean Anti Money Laundering (AML/CTF) Principles in 2009, to strengthen and or reinforce its member’s compliance and control environment. These Principles are available for adoption by all members of the CAB. Conclusion Despite the challenges facing the economies and consequently the financial services sector in the Caribbean, there are inherent opportunities. The uptake of these opportunities requires building consensus and strong strategic partnerships among all stakeholders. The CAB is therefore a critical mechanism for promoting these organizational prerequisites for strengthening the financial services sector.

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CariBBean FoCuS

Trade Marks in Trinidad and Tobago At present in Trinidad and Tobago, the legislative regime governing trade marks is the Trade Marks Act. To a certain degree, that Act is similar to the Trade Marks Act of the United Kingdom, 1938. There is under discussion a Trade Marks Bill that contains provisions similar to those of the United Kingdom Trade Marks Act, 1994. As those discussions are still at a preliminary stage, it is unlikely that this new legislation will be enacted anytime soon.

Lex Caribbean Bronock A. Reid Partner Tel: 1-868-628-9255 bronock.reid@tt.lexcaribbean.com www.lexcaribbean.com

The registration of trade marks is a relatively simple process, once there are no objections to the trade mark itself. Upon the filing of an application and the payment of the requisite fee, the Controller of the Intellectual Property Office (‘the Controller’) will determine whether the trade mark ought to be accepted or rejected. If accepted, the trade mark will then be advertised so as to allow third parties to object to its registration on the Trade Mark Register. Assuming that there are no objections or, if there are no successful objections, upon payment of the registration fee, the Controller will proceed to register the trade mark. It is only at this point, i.e. the entry of the trade mark on the register, that the owner of the trade mark is entitled to all of the rights and privileges that come with registration. It is worth noting too that while registration of a trade mark is not compulsory in Trinidad and Tobago, the owner of a mark, though not protected by the legislation, may still have legal protection under the common law and may institute an action against any party that it alleges is passing off its goods and mark as the owner’s. Often there are times where an owner of a trade mark finds that while their mark for registration has been accepted by the Controller, a third party objects to its registration on the ground that it is confusingly similar to its registered trade mark and is therefore likely to confuse and/

or to deceive the public into thinking that the applicant’s trade mark is its own. The applicant will then be called upon to defend its application if it can, and establish that its trade mark is not confusingly similar to that of the opponent. Evidence of use of the applicant’s trade mark in Trinidad and Tobago while useful, is not actually determinative of the issue whether the trade mark is confusingly similar to the opponent’s. The applicant must be able to establish that its trade mark is distinctive, with the evidence of use restricted to the period prior to the filing of the application. Furthermore, if evidence of use is to be adduced, it may not be sufficient simply to refer to the island of Trinidad. Evidence ought to be adduced with respect to the island of Tobago as well. Omitting one of the two islands actually allows the opponent to contend that the evidence is not indicative of whether the public would be confused and/ or deceived. It is worth remembering in this regard that Trinidad and Tobago is a unitary republic. In addition to this, it is common for an applicant to wish to adduce evidence in support of its application for registration, that its trade mark has been registered in other territories. Under the current state of law this is of no real relevance to the Controller, although if the trade mark has been registered in territories that have a similar legislative framework as Trinidad and Tobago it is an aspect that may be considered. Lex Caribbean offers its clients the full range of services in dealing with trade mark applications before the Controller. We not only act as trade mark agents for the actual filing of applications, but we also advise and appear for clients before the Controller in the event that their trade mark is opposed. We are therefore able to offer a seamless transition without the need to retain third party assistance. Furthermore, as a regional law firm with offices in Barbados and Jamaica, Lex Caribbean offers clients cross-border services in a cost-effective and timely fashion. We also collaborate closely with other attorneys throughout the English-and Dutch-speaking Caribbean, and are therefore in a position to ensure that clients obtain the most effective and efficient service available.

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www.lexcaribbean.com Lex Caribbean was established in Barbados in 1997. Our vision was to become the first pan-Caribbean law firm providing seamless advice as to the local law of multiple territories in the region. With over 30 lawyers we currently operate from three offices in Trinidad and Tobago (consequent upon a merger in the late 1990â&#x20AC;&#x2122;s with De Nobriga, Inniss & Co., a leading firm in Trinidad and Tobago which had been founded in 1967), and from single office locations in Barbados, Jamaica and London. We have also formed strategic alliances with respected counsel in several other Islands, consolidating our extensive reach throughout the Caribbean.

In the pursuit of our vision, we offer expertise in the areas of capital markets, commercial litigation, corporate/commercial law, insolvency and restructuring, international business, project finance and property development and conveyancing to clients conducting local and cross border transactions in the Caribbean. We also advise on international business transactions from Barbados and coordinate advice from other international business jurisdictions throughout the Caribbean. Our breadth and depth of skills and experience enable us to provide intelligent, carefully coordinated multi-jurisdictional advice to regional and international clients

Contact Information Trinidad

5/7 Sweet Briar Road St. Clair ort-of-Spain Trinidad West Indies Tel: (1) 868- 628-9255 Fax:(1) 868- 628-6714 Contact: Marjorie Nunez, Country Managing Partner Port-of-Spain

Tobago

First Floor Ansa Ma Al Building Milford Road Scarborough, Tobago West Indies Tel:(1) 868-670-7914; Fax: (1)868-639-4846 Contact: Richard Wheeler, Partner

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Trinidad Tobago Barbados Jamaica London

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CariBBean FoCuS

Mergers & Acquisitions While some of the major economies in North America and Europe show very early signs of possible improvement, the Jamaican economy continues to deal with the effects of the downturn. The Statistical Institute of Jamaica estimates that GDP for the quarter ending September 2011 grew by 0.6% compared with the corresponding period for 2010, and followed other quarters of successive growth.

Nunes Scholefield DeLeon & Co. Paul Tai Partner Tel: 876-960-9008 ptai@nsdco.com www.nsdco.com

Despite the challenging times, foreign investors continue to show interest in Jamaica’s investment environment. The level of merger activity continues to be low, which is not surprising given that some of our major industries such as telecoms and health insurance continue to be serviced by a few players. Nevertheless, there has been one recent major acquisition in the mobile telecoms industry. Foreign investors sometimes find Jamaica’s labour laws challenging. Certainly on a comparative basis, the severance laws can be onerous in cases where employees are being made redundant. However, many employers in Jamaica have still managed to operate successfully within this framework. In some respects Jamaica has very low barriers to entry for foreign investors. Foreigners are free to act as board directors and can own shares of Jamaican companies outright if they wish: Companies in

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Jamaica can have all foreign directors and shareholders: There is also no restriction on foreign ownership of real estate and other types of property: Lastly, by Jamaica continuing to maintain its no exchange control policy, foreign owned business can freely repatriate after tax profits. The high tax burden continues to be another factor that businesses have to deal with. The tax burden arises both from the transactional level of the merger and acquisition, and the day-to-day operational level of the business. However, the government is committed to regularly reviewing its tax policies and reforms, and continually seeks the input of the private sector in this area. As a result, there have been significant reductions in some of the transactional taxes. Despite the government’s efforts, governmental bureaucracy and red tape continue to be a major challenge for businesses. As a full service civil law firm, we have the capacity and experience to help investors navigate through the various challenges faced when entering the Jamaican business arena. Jamaica continues to be viewed as an emerging market in a challenging worldwide environment. However, with the guidance of overseas and local advisors, opportunities for acquisitions can be taken advantage of.

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SpotLiGHt on CHina

Spotlight on China INVESTMENT OPPORTUNITIES IN CHINA – A UK PERSPECTIVE We are all aware of the headlines on China: Decades of Double Digit Growth; The World’s Second Largest Economy; The Rise of China’s Manhattan Skylines. However, these clichés can often be meaningless and, taken alone, risk being misleading. Just as taking the average level of unemployment across the EU as a guide to the economic strength of Germany or Greece would be highly misguided, so in China a more in-depth analysis of an individual region is required to understand the economy, the policies, and the investment opportunities that lie therein.

China is certainly important to the UK’s economy. Exports of goods to China have grown from 2.5% of total UK exports in 2009 to 2.75% in 2010 and 3% in 2011. UK exports to China are larger than to any other BRIC market with total exports to China, £8.8 billion in 2011 - greater than the combined exports to India and Brazil. China’s middle class consumers China’s rapid growth means that the purchasing power and international preference of the much-vaunted Chinese middle class is now having a clearly defined effect. While the dominant UK export sectors of automotive and high value engineered goods continue to perform well, in the last 12 months there has also been a dramatic growth in the export of consumer related products to China. In 2011, exports in sectors such as food and drink, clothing and fashion accessories, and other household items, grew at 37%. The increase in consumer goods exported to China provokes several questions: how big is China’s middle class? How wealthy are they, and where are they to be found? The Chinese definition of middle class is a family with

income of between US$10-50,000 per annum, who own a house and car, save beyond their requirements for health and education, travel and eat out regularly. This definition equates to a massive 250 million people, but this is only 20% of the total population. 250 million is the combined population of China’s wealthiest regions of Guangdong Province, Shandong Province, Beijing and Shanghai, but not all of these regions’ populous can be defined as middle class. Instead, an increasing number of China’s wealth generators are to be found spread across the country’s 287 prefectural level cities, showing that great opportunities for consumer goods producers exist away from China’s east coast. Journey to the West As wealth levels across China increase, we have seen a marked increase in FDI going into central and western China. FDI is growing strongly in many regions, including the areas around the two provincial capitals of Zhengzhou (Henan Province) and Wuhan (Hubei Province) in Central China. These two cities are located at the traditional trade cross roads within China. As wealth and economic activity grows away from China’s coast, cities such as these, as well as other trade

Exports of goods to China have grown from 2.5% of total UK exports in 2009 to 2.75% in 2010 and 3% in 2011 68 • GBM • April 2012

hubs such as Shenyang (North East), Xi’an (North West) and Chengdu (South West), will become more important, not just as markets themselves but as centres of business to supply an ever demanding domestic economy. City clusters In recent years, many of these cities across China have also begun to collaborate in their economic development planning. In the China-Britain Business Council’s latest research on regional cities, we reviewed the level of developed road networks and identified 12 regions of clustered cities in China (visit www.cbbc.org to download the full report on China’s regional cities). The best known of these city clusters are “JingJin-Ji” (Beijing, Tianjin and the encompassing Province of Hebei), East Shandong, West Shandong, and three others in Guangdong Province centred around Guangzhou, Shenzhen and Zhuhai. Most collaboration can be seen in infrastructure development, but the aim of these clusters is to bring closer together complimentary sectors of the economy where regions strong in agriculture, raw materials, manufacturing or private and public services can support each other’s growth. Foreign companies, whether in the market entry stage or already expanding in China, should be aware of these city clusters. The higher standard and density of road networks in these areas offer a greater level of efficiency in logistics, supply chain or customer relations. In total these regions account for 65% of China’s population but 75% of total GDP and 85% of FDI. These are regions of concentrated wealth and investment driving further economic expansion. So by targeting these regions, companies can capture higher levels of wealth in an efficient way. Government relations Focusing efforts to one cluster of cities also facilitates the initiation and maintenance of government relations. Good local government relations assist with the day-to-day business issues of a company. Whether one is gaining approval for a business venture, obtaining a business licence, benefiting from local tax policies, or securing access to lobby when issues arise, good government relations are paramount in China. The China-Britain Business Council’s eleven China offices effectively cover these regions and exist in part to aid the

development of business to local government relations. China’s 12th Five-Year Plan An understanding of government policy is also essential for commercial success in China. With the announcement of China’s 12th Five-Year Plan last year, the ChinaBritain Business Council investigated the new policy announcements for fifty of the major cities across China. Local policy decisions help us not only to identify immediate business opportunities, but also to understand the longer term plans for a city and the wider region. We focused on eight business themes where the latest Five Year Plan matches UK strengths: Urban Development, Healthcare, Retail, Education, Automotive, Aerospace, Rail, and Energy. Opportunities in the first four sectors exist across all of China. The second four sectors are less universal, but in the cities and regions where there is a demand these opportunities are clearly endorsed by the local government. Overcoming challenges However, while many exciting opportunities can arise from China’s ambitious development targets, they can also create difficulties for business operations. For example, HR is one of the top issues raised by companies operating in China to the China-Britain Business Council, and the development plans within individual cities’ Five Year Plans may lead to increased difficulty in hiring and maintaining skilled local professionals. The aim of each Chinese city may be to have a new airport, expanded urban rail, or increased numbers of hospitals and universities within the next four years, but the question of where all the skilled pilots, railway engineers, doctors and professors will come from, remains unanswered. Increased levels of education and vocational training are offered as a solution, but may not be sufficient within the planned timescale. We have found that international companies operating in China’s retail sector have already seen a drop in skill levels available in management and customer service, as they expand away from coastal areas. The lack of skilled staff would affect all business sectors just when China’s need is greatest. The China-Britain Business Council offers a range of practical in-market assistance services to help UK companies combat

market issues in China, such as employment services to address the shortage of skilled local professionals. Along with our practical services, our in-depth knowledge of the Chinese business and policy environment, industry initiatives, and membership programme, we help UK companies overcome the challenges inherent to investment in China, and find success. Nobody within the China-Britain Business Council would suggest that business with or within China is a walk in the park. A long trek across difficult terrain, with the chance of dramatic changes in weather conditions, would be a better analogy. However, our member companies would all agree that the sense of fulfilment, when ultimately the journey is complete, is worth the hardships along the way. More UK companies are completing this journey every year. Support for them exists not just from the internal team, but also from our many members in the professional services who offer sound and experienced advice for tax, law, finance and other key business support. China continues to attract attention because of the headlines. We are all aware of the high rates of economic growth that have raised China to its eminent position in the world economy. Yet newcomers to the market are still frequently amazed by the extent of urban development and Manhattan skylines. One building is possibly more meaningful than all the others put together. In 1990, the Bank of China building in Hong Kong was completed. This striking modern design by the world-renowned architect I. M. Pei lies sympathetically yet dominantly in Admiralty on Hong Kong Island. More than any other development, this building signified China’s emergence on the world stage. That was a whole generation ago, yet foreign companies are still often surprised by what appears to them to be China’s recent rise. The China-Britain Business Council has engaged with China for nearly 60 years. As we enter our third generation, the lessons from the past and knowledge of the present and immediate future act as unrivalled resources, to help UK businesses take full advantage of the numerous investment opportunities to be found across China. To find out how the China-Britain Business Council can help you succeed in China, visit www.cbbc.org, or email enquiries@cbbc.org. Author: Stewart Ferguson, Head of Research and Consultancy.

About the author stewart.ferguson@cbbc.org China-Britain Business Council, Portland House, Bressenden Place, London, SW1E 5BH

Stewart Ferguson is the West Midlands Representative and Head of Research and Consultancy for the China-Britain Business Council. Stewart began learning Chinese at the age of 16 and, after graduating from Durham University in Oriental Studies, worked for both Hong Kong and Taiwan invested companies in the UK. Prior to joining CBBC three years ago, Stewart lived and worked in Guangzhou for eight years.

April 2012 • GBM • 69

inCuBator For eMerGinG LeaderS

incubator for emerging leaders From Alexander Wendt to Anne-Marie Slaughter – and much earlier than that – informal networks of influence have been praised as the drivers of international cooperation. Does it really matter if leaders know each other personally? I ask myself and decide to zoom in the Young Atlanticist Network – an emerging leaders incubator, nested comfortably at the Atlantic Council in Washington DC, to which I also happen to belong. In the Network’s own language, the program is ‘dedicated to identifying and connecting the next generation of leaders in the

Atlantic community, and beyond’. The NATO Summit Working Group, formed in February 2012, brings together up-and-coming movers and shakers in the security policy and transatlantic relations space – all identified as high potentials and all below the age of 35 – working together towards the NATO Summit in Chicago this year in a private offthe-record informal platform. According to member Kristina Mikulova, correspondent for The Economist, it is known that the transatlantic community has survived multiple structural shifts in the international system because it shares more than interests. “What defines and, at times, reconstitutes these interests is a set of common values”, she says before adding, “These have helped build normative regimes that filter the pool of potential new members, set boundaries for political action and limit the range of available policy tools when it comes to acrid issues of the day. Conceptually, advocacy groups bound by normative commitments to, for instance, human rights, individual freedom, democracy and democratic peace, have to be distinguished from epistemic communities or lobby groups. This is, in many ways, a non-profit enterprise on a very competitive market. In this view, the Atlantic Council's Young Atlanticist Network endeavour to extend the transatlantic network to the up-and-coming generation of young policymakers, by encouraging dialogue that will foster shared understandings of new challenges, is a worthwhile manifestation of a novel and an increasingly popular approach to policy enterprise; norm entrepreneurship.” “The members of the Young Atlanticist Network are the future leaders of their countries,” shares Ilina Mangova, project manager and researcher in the Macedonian Institute for Democracy. Dominik Jankowski works on security and defense issues for the President of Poland. To him NATO is, “a mixture of values, interests, trust and mutual understanding.” In his eyes, the Young Atlanticist NATO Working Group merges all these aspects. “It provides us with a possibility to create a vision for this organisation 10 years down the line.” “Based on the excellence I could witness, I wouldn’t be surprised if some of them hold the highest offices in the future”, says of his fellow colleagues another Young Atlanticist Rabah Ghezali, Research Fellow at CapMENA

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and founding member of the Transatlantic Network 2020.

instant support system I also seek the opinion of a NATO partner country representative. Geety Samadi is an Afghan woman working in security policy research at the University of Kabul in Afghanistan. Talking about the effect of the Young Atlanticist Network she says, “Psychologically, it boosts young leaders’ confidence.” The platform serves as an instant support system. According to Jelena Petrovic, PhD candidate at the War Studies Department at King's College London, the social platform is the “optimal terrain for testing ideas”. Indeed, the working group is what fellow colleagues turn to when preparing to give a TV interview starting in 10 minutes, or when in urgent need to bounce off an idea for work. It’s your go-to bank of ideas shared by people who are there for you.

the glue that keeps it all together “We get this incredible exchange of ideas – not identical ideas, and not necessarily opposite ideas, but different ideas,” says Washington DC-based member Joshua Foust, fellow at the American Security Project. For another Young Atlanticist, Alexander Slater, associate at the New York based law firm O'Melveny & Myers LLP, the best part of the network is the global exposure. “In just a few days, I've met people with expert knowledge and on-the-ground experience in far flung regions of the world. And while everyone is serious about their work and opinions, they also have a sense of humour.” This is a sentiment echoed by Gonca Noyan, Co-Founder at Soft Power TR in Turkey. “I believe that during the last couple of weeks in the Young Atlanticist Working Group we’ve already created enduring and sustainable connections through sharing views, criticism, as well as jokes.” Seth Johnson, a doctoral candidate at Oxford University says, “The glue that keeps networks such as the Young Atlanticist Network together is personal contact.” Member Benjamin Bilski, a lecturer at the University of Leiden agrees: “Informal discussion, social events and jokes are just as important as structured conferences and professional collaborations to create meaningful bonds.”

does it matter if leaders know each other personally? “Whenever I am asked if these groups work, I think about the Red phone that the USSR

and the US used during the Cold War”, says Špela Kranjc, researcher at the Faculty of Social Sciences at the University of Ljubljana in Slovenia, before adding, “Think about it – how many problems can be solved by a simple phone call? That's why this Young Atlanticist Working Group matters, because 20 years down the line leaders will be able to pick up the phone and say, ‘hey, remember me?’ Those experiences will always be there and will make for a solid foundation”. A lot has been written on communications between leaders in the field of political psychology – Cold War discourses and decision-making being analysts’ favourite area. The multi-polar arrangement, however, is a game changer. “Obama can call European presidents and chat with them as many of them speak English. But he can’t call …China this way. This creates additional uncertainty between these states about each other’s intentions,” says Olena Tregub, founder and executive director of Global Education Leadership in Ukraine. Trust seems to be the big unknown in diplomacy. Most of my colleagues mention the word in one way or another when asked about the point behind the Young Atlanticist Network. “In international relations, there’s always been a lack of trust between states and their leaders. If leaders can chat without interpreters and understand each other on a human level, this really helps to establish mutual sympathy and some level of reliance”, says Olena, “It’s much easier for young emerging leaders like us in the Young Atlanticist Network to establish friendships now than for any other generation of leaders in history. The Millenials, or professionals operating in the 21st century, are more global and more exposed to a variety of cultures since childhood. They have many more things in common that help to break the ice”. “Although politics and diplomacy are often thought to be rather cold and impersonal matters, the reality is that personal ties, friendships and shared connections can and do play a meaningful role,” says Dr. Benedetta Berti, lecturer and research associate at the Institute for National Security Studies at Tel Aviv University. Olena Tregub adds on this. “Putin established a good

relationship with German leaders not only because of their dependence on Russian gas, but also because he knew their language and culture well.” Benedetta then goes on to say, “Initiatives like the Young Atlanticist Network acquire an added value: they create a network for the future leaders of tomorrow, something that could help create long term partnerships, professional collaborations and friendships. In creating successful professional networks, ‘intangibles’ matter a great deal: it is important to discuss over politics and exchange ideas regarding the future political and security challenges ahead for the transatlantic community, but it is also important to occasionally ‘loosen up’ and share personal anecdotes and experiences. I think this allows for making the exchange more ‘real’. To build solid and effective connections, we have to see each other like real persons, and not just like experts.” “In addition to exchanging our differing perspectives, I think that the personal relationships we build will be the greatest benefit in the long-run, as all of us advance in our careers and hopefully, maintain contact,” says Washington DC-based Young Atlanticist Victoria Taylor, International Affairs Fellow at the Council on Foreign Relations. Francisco Galamas, bio-risk researcher at the Institute of Security Studies at Lusofona University in Portugal shares his two cents on the topic. “The Young Atlanticist Network types of interactions rely deeply on emotions. It’s impossible to separate a human being from their emotions; only through these can relationships gain significance and not only significance but also longevity, because emotional investment is what brings back people together. A relationship between people can only persist throughout time, if it has the depth of personal contact”, he says before concluding, “Formal relationships can achieve their objectives but in the long run they mostly won’t endure the test of time”.

years time. “Eventually, if nurtured, such a network may prove of great worth, as it will not only support the growth of leaders with its perpetual stimulation but will also enable them to cooperate easier. Common interests, intellectual curiosity and vivid ambition make members in the Young Atlanticist Working Group recognisable to each other and help them make the bonds – some of which may last throughout their careers and lives,” hopes Jelena Petrovic, while Alexander Slater speculates. “I can imagine these relationships being vibrant far into the future, whether they're maintained over a cup of coffee, across the negotiating table or in cyberspace.” Young Atlanticist Network member Joshua Foust is more measured. “In 20 years, though, who knows? From the military side, long-term engagement between services has helped some understanding but it hasn't erased all differences between national militaries.” “It is quite important for us to get to know each other now, because we are not completely shaped by our national or institutional environment or preferences, just yet”, according to member Dr. Samir Battiss, “We can share our view more freely than our seniors. It would be interesting to see what the evolution would look like 20 years later, but it would be quite funny to see some of our fellow Young Atlanticist colleagues again and tell them, ‘You haven’t always said this!’ or ‘That’s never stopped you before’”. “So we'll just have to see!” concludes Joshua Foust. Here, for once, I agree with him. Iveta Cherneva is a security, human rights and sustainability author, and a member of the Young Atlanticist Network at the Atlantic Council in Washington DC. www.youngatlanticist.org

20 years down the line? Some of my fellow leaders-to-be assess the significance of the created partnerships and how they could potentially play out in 20 April 2012 • GBM • 71

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deal directory Bureau Veritas With the acquisition of TH Hill, Bureau Veritas takes a leading role in quality assurance services for drilling systems On 20 March 2012, Bureau Veritas, the world leader in conformity assessment and certification services, announced it had signed an agreement to acquire TH Hill. TH Hill is a worldwide leader in oil & gas drilling failure prevention and analysis services. The company offers quality assurance, engineering and training services, to minimise the risk of structural and mechanical failure of both onshore and offshore drilling equipment. Bureau Veritas helps its clients to improve their performances by offering services and innovative solutions, in order to ensure that their assets, products, infrastructure and processes meet standards and regulations in terms of quality, health and safety, environmental protection and social responsibility.

is located adjacent to the Leopard Rock Hotel, already owned by Cambria. The Castle is located near the top of the Leopard Rock and boasts spectacular views all around; across Zimbabwe’s Eastern Highlands and well into Mozambique. The Castle was originally built in the 1940s and has more recently been operating as a successful guesthouse with six rooms and suites. Cambria intends to incorporate the Castle over time into the Leopard Rock Hotel, expanding the hotel’s number of rooms by 10%, through the creation of additional high-end suites. It will also offer the Hotel a number of additional, unique venues for events. Commenting on the acquisition, Ian Perkins, non-executive Chairman of Cambria said: “We are pleased that we have been able to acquire the magnificent Castle at Leopard Rock. It complements very well our existing Leopard Rock Hotel facilities, further enhancing our ability to offer a unique experience at the Hotel.” Cambria Africa plc is a long term, active investment company that have built a portfolio of investments primarily in Zimbabwe.

manufacturer and supplier of shell and tube heat exchangers, supplying a number of industries including downstream oil and gas, chemical, energy and food. The Directors believe that the acquisition brings the following strong strategic and financial benefits for the Corac. Phil Cartmell, Executive Chairman said: “This acquisition represents an opportunity to acquire long established, niche profitable businesses with complementary technology and expertise. It will transform Corac into a technologyled engineering group serving major global industries with established commercial relationships and a track record of revenue and profit contribution.” Corac Group is an innovative research and technology group that specialises in highspeed compressor and power electronics technology serving the global energy and resources sector. For further information, visit www.corac.co.uk.

Glencore Glencore to Acquire Viterra

Didier Michaud-Daniel, Bureau Veritas’ Chief Executive Officer said: “This acquisition is a unique opportunity to reinforce Bureau Veritas’ expertise in the oil & gas drilling industry. In addition to strengthening our presence in the strategic US energy segment, TH Hill will enable us to build a compelling integrated services offering in order to better serve the oil & gas industry worldwide.”

Corac

Bureau Veritas has more than 52,000 employees in 940 offices and 340 laboratories located in 140 countries. Following this acquisition, Bureau Veritas will now have 3,300 employees in the United States.

Proposed Acquisition of Wellman Hunt Graham Ltd and Wellman Defence Limited And Proposed Placing to raise £6.35 million

For more information, visit www. bureauveritas.com.

The research and technology group Corac Group plc (Corac), announced on 15 March 2012, it was to purchase the entire issued share capital of Wellman Hunt Graham Ltd and Wellman Defence Limited, for an aggregate consideration of £10.75m.

Viterra is one of the world’s leading global agri-businesses and food ingredients companies. Operating three vertically integrated business segments of Agriproducts, Grain Handling and Marketing, and Processing, Viterra has sourcing capabilities in multiple geographies and a marketing network spanning the globe, supplying food ingredients to more than 50 countries worldwide.

Wellman Defence is a leading global supplier of submarine air purification equipment and clean air ventilation, with proprietary technology and a pipeline of innovations. Wellman Hunt Graham is a UK based

The acquisition of Viterra is consistent with Glencore’s strategy of strengthening its position as one of the global leaders in grain and oilseeds markets. Viterra’s Tier 1 portfolio of assets in Canada and Australia

Cambria Africa Acquisition of the ‘Castle at Leopard Rock’ On 16 March 2012, Cambria Africa (Cambria) announced the acquisition of the well-known ‘Castle at Leopard Rock’ (the Castle), which

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For more information, visit www. cambriaafrica.com.

On 20 March 2012, one of the leading integrated commodities producer and marketer Glencore International plc (Glencore) and Viterra Inc. (Viterra) announced that they had signed a definitive agreement pursuant, to which Glencore has agreed to acquire all of the issued and outstanding shares of Viterra for C$16.25 per share in cash by way of a court approved plan of arrangement.

will allow Glencore to build upon its position as one of the world’s largest commodity suppliers, and provides the opportunity to leverage Glencore’s extensive global networks, expertise and best practices in order to create additional value across its agricultural businesses. Chris Mahoney, Director of Agricultural Products of Glencore said: “The acquisition of Viterra reflects our strong belief in the importance and future potential of the Canadian and Australian grain markets.” Glencore is one of the world’s leading integrated producers and marketers of commodities, headquartered in Baar, Switzerland. Glencore has worldwide activities in the production, sourcing, processing, refining, transporting, storage, financing and supply of Metals and Minerals, Energy Products and Agricultural Products. For further information, visit www.glencore. com.

The Go-Ahead Group Go-Ahead Group acquires Northumberland Park Bus Depot The Go-Ahead Group plc (Go Ahead) announced on 19 March 2012 the acquisition of First London East’s Northumberland Park bus depot in Tottenham, northeast London for a gross cash consideration of £14m, with a view to compete the transaction on 30 March 2012. The acquisition increases Go-Ahead’s share of the London bus market from 22% to 23%. The annual turnover of the business is around £24.5m. Northumberland Park will complement Go-Ahead’s existing Docklands Buses and Blue Triangle operations based in Silvertown and Rainham respectively. David Brown, Group Chief Executive for Go-Ahead said: “We have great confidence in the London bus market and our management team in London and this acquisition provides the opportunity to operate in a new area of the capital. Northumberland Park is located near both Tottenham Hale and White Hart Lane, where regeneration is either planned

or already underway. We look forward to working with the Northumberland Park team to build on their success to date and to continue to deliver a good service to passengers in this area of London on behalf of Transport for London.” Go-Ahead has around 400 employees and a fleet of 130 buses. It currently operates 13 Transport for London contracts. For further information, visit www.go-ahead. com.

Hogg Robinson Group Proposed acquisition of the outstanding minority interest in Spendvision Holdings Limited Hogg Robinson Group plc (HRG), the international corporate travel services company, announced on 14 March 2012, that its indirect subsidiary, Hogg Robinson plc, had entered into a conditional agreement to acquire Spendvision Holdings Ltd (Spendvision). Spendvision is a leading innovator in the development and support of transaction management solutions, including end-toend expense management and payables automation. HRG’s strategy is to provide a broader range of integrated products to its corporate clients, linked to its own proprietary technology. The directors anticipate this acquisition will bring a number of operational and financial benefits to the Group, with increased opportunity to sell integrated travel management and payment and expense products to their existing corporate clients. Commenting on the proposed acquisition, David Radcliffe, Chief Executive Officer of HRG, said: “We are delighted to announce the acquisition of the minority interest in Spendvision. Since our original investment in 2004, the Spendvision team has worked hard to develop the company into a leading innovator in end-to-end expense management.” Hogg Robinson Group (HRG) is an award-

winning international corporate travel services company, with a network that extends to more than 120 countries and employs 12,000 people. For further information, visit www. hrgworldwide.com.

Lion Trust Proposed Acquisition of Walker Crips Asset Managers Limited On the 13 March 2012, Liontrust Asset Management PLC (Liontrust or the Company), the specialist independent fund management group, announced that it had entered into a conditional share purchase agreement with Walker Crips Group plc (Walker Crips), to purchase the entire issued share capital of Walker Crips Asset Managers Limited (WCAM) for a total consideration of £12.348m. WCAM is an established discretionary portfolio manager of unit trusts, OEIC and segregated accounts, which are predominantly marketed to clients, institutional investors and intermediaries in the United Kingdom. WCAM increases Liontrust’s assets under management (AuM) by £604m. John Ions, Chief Executive of Liontrust, said: “The acquisition of WCAM significantly strengthens our fund management capability. Combining our existing fund managers with Stephen Bailey and Jan Luthman will create one of the strongest ranges of UK equity funds and teams.” Liontrust has been growing its business operations since 2010. In that time, the Company has restructured its business, initiated a marketing campaign to develop the Liontrust brand, raised awareness of its strong fund performance and broadened its client base. In October 2011, Liontrust successfully expanded into the fast growing Asia and Emerging Markets asset classes through its acquisition of the fund management business of Occam. For further information, visit: www.liontrust. co.uk.

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Magnolia Petroleum Acquisition of Acreage in the proven Mississippi Formation, Oklahoma & Operations Update On 19 March 2012, Magnolia Petroleum Plc, the AIM quoted US focused oil and gas exploration and production company, announced a positive update across its portfolio of interests focused on proven and producing US onshore hydrocarbon formations, including the prolific Bakken / Three Forks Sanish Formations in North Dakota, and the Hunton/Woodford and Mississippi Formations in Oklahoma. Highlights from the updated portfolio include the acquisition of an oil and gas lease, comprising a 12.5% working interest in 640 acres (80 net mineral acres), with a 9.375% net revenue interest. This lease is located in Oklahoma, within the boundaries of the prolific Mississippi play. Magnolia COO, Rita Whittington said: “Today’s land acquisition along with our participation in two further wells adds to our highly prospective portfolio of assets that comprises producing and non-producing interests in proven oil plays. We currently have interests in 69 producing assets and with our recently raised funds, we are well placed to significantly increase this total and in turn achieve a step up in revenues generated.” Magnolia Petroleum plc is an AIM listed oil and gas production company focused on the acquisition, exploitation and development of oil and gas properties primarily located onshore in the United States. For further information, visit www. magnoliapetroleum.com.

Shire plc Shire to acquire FerroKin BioSciences, Inc., and its Phase 2 iron chelator treatment Shire plc, the global speciality biopharmaceutical company, announced on 15 March 2012, that it had signed an agreement to acquire FerroKin BioSciences, Inc., for an upfront payment of $100m, payable in cash at closing, plus potential post-closing milestone payments of up to $225m. FBS0701 is a once-daily oral capsule in development for the treatment of iron overload due to chronic blood transfusions in adults and children. Initial data from the adult study, presented at the American

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Society of Hematology in December, supports the potential for FBS0701 as an effective iron chelator with a favourable safety profile. Shire’s Speciality Pharmaceuticals Senior Vice President, Hematology, Ross Murdoch said: “We hope to use our expertise in hematology coupled with our proven ability to progress products through the development pipeline to bring FBS0701 to the global marketplace. This acquisition marks an important step for Shire in building a business that serves the growing needs of specialty hematologists and their patients.” Shire’s strategic goal is to become the leading specialty biopharmaceutical company that focuses on meeting the needs of the specialist physician. Shire focuses its business on attention deficit hyperactivity disorder, human genetic therapies, gastrointestinal diseases and regenerative medicine as well as opportunities in other therapeutic areas to the extent they arise through acquisitions. For further information, visit: www.shire. com.

Tarsus Group Acquisition of 70% of leading Turkish exhibition company Life Media At the end of March Tarsus Group plc (Tarsus or the Group), the international business-tobusiness media group, is expected to acquire 70 per cent of leading Turkish exhibition organiser Life Media. Tarsus will pay an initial consideration of approximately £15m for the 70 per cent interest, with £10.6m paid immediately followed by £5m due in 2013. Established in 1997, Life Media has a leading position in Turkey’s housewares and gifts business-to-business exhibition sector. It runs two annual shows in Istanbul, as well as publishes related trade journals in the English and Turkish languages. Founder Irfan Tiras will continue to manage the business after its acquisition. For Tarsus, this latest acquisition is seen as a significant step toward its ‘Project 50/13’ target to derive 50 per cent of its revenues from emerging markets by 2013. Douglas Emslie, Tarsus Group Managing Director, said: “The Turkish exhibition market is one of the fastest growing in the world. Life Media’s exhibitions are the market leaders, not only in the domestic Turkish market but also in the wider region. Given Turkey’s unique geographic position on the crossroads between East and West, we believe there is a significant opportunity to develop the

existing Life Media portfolio into world leading events.” Tarsus is an international business-tobusiness media group with interests in exhibitions, conferences, publishing and online media. Since its inception in 1998 with one key brand and a turnover of £4.8 million, the Group has grown substantially and now operates in thirteen key sectors – with over eighty events and websites, twenty-five publications, and an annualised turnover of over £50 million. For more information, visit www.tarsus.com.

Trap Oil Group PLC Acquisition of a 15 per cent working interest in the Athena Oil Field On 16 March 2012, Trapoil, the independent oil and gas exploration and appraisal company, announced that it had agreed to acquire a 15 per cent working interest in the Athena Oil Field (Athena) from Dyas UK Limited (Dyas), subject to Department of Energy and Climate Change (DECC) and Dyas’ partners’ approvals, for a total cash consideration of approximately £26.9m. With completion of this acquisition, Trapoil will have achieved within one year its two principal IPO objectives of creating a dynamic exploration programme backed by cash flows from producing assets with high levels of tax synergy. Trapoil is now well positioned for accelerated growth with results from its scheduled six well 2012 drilling programme (including three potentially high impact wells) currently anticipated during the remainder of the current year. Drilling of the first well, Orchid, has recently commenced. Mark Groves Gidney, Chief Executive Officer of Trapoil, said: “Athena represents the game changing, cash generative production deal that we have been pursuing since our IPO. The Company is now well positioned to achieve its mission of becoming a significant, well rounded, independent, UKCS focused oil and gas business.” The Trapoil group was created in 2008 by a team of experienced industry executives with a broad range of oil and gas technical, operational and financial expertise and professional skills. Trapoil has developed long-term relationships with key oil industry partners. To find out more information visit: www. trapoil.com.

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