M&A Procedures in Uzbekistan: A Practical Guide - Uzbekistan M&A Information Portal

The mergers and acquisitions (M&A) process in Uzbekistan is similar to standard international procedures, but requires local legal requirements and cultural considerations. The specific steps are explained in detail below.

🔍 Phase 1: Preparation and Strategy Development

1. Clarifying the purpose

Clearly define the strategic objectives of M&A (market entry, technology acquisition, economies of scale, etc.)
Setting criteria for acquisition targets (industry type, size, location, financial status, etc.)

2. Formation of a local expert team

Local counsel : ensuring legal due diligence and regulatory compliance
Accountants and tax accountants : Financial due diligence and tax advice
Consulting : Market research and business due diligence
Interpreter : Overcoming language barriers (Uzbek and Russian)

📊 Phase 2: Selection and evaluation of target companies

3. Screening of target companies

Industry research and shortlisting of potential targets
Preliminary financial analysis and business valuation

4. Conclusion of a Non-Disclosure Agreement (NDA)

Two-way confidentiality agreements are signed before information is disclosed
Drafting contracts in compliance with Uzbekistan law

📝 Phase 3: Negotiations and Statements of Intent

5. Submitting a Letter of Intent (LOI)

Describe the basic acquisition terms (price range, conditions, exclusivity, etc.)
It is not legally binding, but serves as a basis for negotiations.

6. Conducting due diligence

Legal due diligence : investigation of contracts, licenses, litigation risks, and intellectual property rights
Financial due diligence : verification of financial statements, tax returns, and liabilities
Business due diligence : evaluation of business processes, customer base, and supply chain
HR due diligence : Verification of employment contracts, social insurance, and pension plans

🤝 Phase 4: Final negotiations and contract signing

7. Negotiation of the acquisition agreement

Negotiations regarding purchase price, payment terms, representations and warranties, and indemnification provisions
Negotiating closing conditions and termination clauses

8. Conclusion of the Final Agreement

Preparation of acquisition contracts under Uzbekistan law
May require notarization

🏛️ Phase 5: Regulatory Approval and Closing

9. Competition Authority Approval

Reviewing the impact of a transaction on competition law
Notification to and approval from the Competition Commission of Uzbekistan

10. Other Regulatory Approvals

Some industries require additional regulatory approvals (e.g., banking, telecommunications, energy)
Foreign investment proposals may require approval from the Board of Investment

11. Closing

Confirmation of condition satisfaction
Payment and transfer of shares
Updating the register (if applicable)

🔄 Stage 6: Integration and follow-up

12. Post-closing integration

Implementing business integration plans
Management team placement and corporate culture integration
Realizing synergy effects

13. Post-Evaluation

M&A goal achievement evaluation
Documenting lessons learned

⚠️ Important points to note in Uzbekistan

Land system : Land is owned by the state, so be careful about the procedures for transferring land-related rights (leaseholds)
Foreign investment restrictions : There may be restrictions on the percentage of foreign investment in certain industries.
Employment protection : Local labor laws strongly protect employee rights, so be careful when making layoffs
Relationships with public authorities : Building good relationships with local governments and industry regulators is important
Cultural sensitivity : Respect local business practices and negotiation styles

📞 Major related organizations

Ministry of Investment and Foreign Trade : Promotion and Regulation of Foreign Investment
Competition Commission : Approval of M&A transactions under competition law
Central Bank : M&A Supervision of Financial Institutions
Ministry of Justice : Business registration and legal system management
Tax Committee : Tax Problem Resolution

💡 Advice for success

Utilizing local partners : Collaboration with reliable local law and accounting firms is essential
Allow yourself time : Plan ahead for things to take longer than expected.
Relationship building : Building trust with authorities and business partners over time
Flexible approach : Flexibility to adapt to local circumstances is required
Long-term perspective : Prioritize long-term relationships over short-term results

M&A in Uzbekistan is most likely to be successful if you are well prepared and have local knowledge. Seeking expert advice at every stage and respecting the local legal and cultural environment are key to a successful transaction.

*This information is for general guidance only and does not provide specific legal advice. For actual M&A transactions, be sure to seek the advice of local experts.