Transaction Powerhouse

Uniquely integrated transaction service

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What we bring to the table is innovative solutions that open up undiscovered opportunities.

Juha-Pekka Mutanen, Partner

The responsiveness of the team is generally excellent.

The Legal 500 2017, Commercial, corporate and M&A

Unleashing the potential of a transaction is about much more than accurate legal advice.

Jan Ollila, Senior Partner

It’s one team, one process, one point-of-contact. Regardless of the complexity of the case, we make it simple.

Mikko Eerola, Partner
Dittmar & Indrenius > Services > Transaction Powerhouse

We take a holistic view on transactions and combine all our areas of expertise into a uniquely integrated transaction service.

We are known for our one-stop-shop transaction service with consistent cutting-edge quality. We serve demanding transaction clients locally and globally, often operating as the trusted gateway into and out of the Nordic region. Our unique position is based on our experience from the defining deals of the decade.

In each project we join forces with relevant practices and industry groups working as one team, in one efficiently managed process, with one point of contact in constant interaction with our client. Centered around our clients’ needs and aligned with their best interests, our Powerhouse team explores the best legal solutions, industry practices and winning strategies to maximise the clients’ success.

Powerhouse is much more than a philosophy to us. It represents our ambition for excellence and thinking ahead for the benefit of our clients. To find continued, sustainable success, we sometimes have to look at creating solutions for problems that are not yet recognized. Our D&I Powerhouse service method allows us to offer our greatest capacity for supporting our clients’ objectives and growth.

Main contact: Jan Ollila, Senior Partner 

 

Team

References

Latest Insights

insight
Loose Lips Sink Ships - How to Control Inside Information in M&A Transactions
18 Jun 2018 Although confidentiality is crucial in any transaction negotiation, listed companies should pay extra attention to ensuring that the people involved in the deal put a sock in their mouth. Should information on a potential transaction leak to the public too early, there is a risk that the planned transaction hits the rocks. Competing bidders may get interested and speculators, such as hedge funds, may try to drive the targets' share price up or start bidding on the failure of the transaction. Criminal charges related to unlawful disclosure and abuse of inside information certainly make their way into headlines. Information on an M&A transaction involving a listed company will often turn to inside information at some stage of the evolving transaction. To avoid information leakages threatening the deal and to prevent criminal prosecution, it is essential to effectively control access to inside information. Mind Your Step M&A transactions are lengthy processes involving several steps from the first internal discussion on a potential target to the closing of the transaction. At some stage of the process, the information on the transaction reaches the threshold of inside information triggering an obligation to make a decision on its disclosure. The directors face the challenging task of determining when the information on the transaction actually turns into inside information. Both the probability and the size of the transaction affect whether the information is likely to have a significant effect on the price of the company's shares. Usually when the size of a transaction is substantial compared to the listed company, the information on the potential transaction amounts to inside information at a relatively early stage. There are well established reasons why the directors should focus on determining the moment when information on a potential M&A transaction constitutes inside information. When this happens, a listed company must either disclose the inside information to the public or make a decision to delay the disclosure. A company can delay the disclosure where it would be likely to prejudice their legitimate interests provided that this does not likely mislead the public and that confidentiality can be maintained. In practice, listed companies have a more or less permanent interest to delay the disclosure until there is certainty that the deal will be entered into. Early disclosure could attract competing bidders and create incorrect expectations misleading the public. "As a rule of thumb, listed companies should ensure that the information on an M&A transaction is regarded as inside information at an early stage of the M&A process" Better Safe than Sorry It is not unheard of that the target itself or its advisers leak information to the market in the hope of a more preferable bidder (a so called "white knight") or as another takeover defense tactic to frustrate the bidder or for testing whether there is any room for higher price. Therefore, from the bidder's perspective, the earlier the information on the potential transaction leaks to the market the higher the risk is that the transaction price or at least transaction costs increase(s). In a worst case scenario, the leakage may prevent the completion of the transaction altogether. In connection with a decision on delaying disclosure, the listed company must establish a project-specific insider register on persons who have access to the inside information. With the help of the insider register, listed companies are able to monitor who has access to inside information on the transaction. This reduces the risk of leakage and abuse of inside information because the companies must ensure that the persons included in the register have been informed of the prohibition to exploit or disclose inside information. As a rule of thumb, listed companies should ensure that the information on an M&A transaction is regarded as inside information at an early stage of the M&A process. A predefined low internal limit in the disclosure policy for valuation or strategical materiality of an M&A transaction helps to ensure that information regarding a potential transaction is considered inside information at an early stage and that the persons involved are registered into insider registers soon enough. This "better safe than sorry" approach does not only limit the risk of abuse of inside information, but it certainly is in the interest of the listed company. By defining the information on the planned transaction as inside information, the risks of endangering a successful transaction and competing bids are effectively mitigated.
insight
Transfer Pricing Related Tax Disputes - Significant Risk for Multinational Enterprises
18 Jun 2018 During the past years, the Finnish Tax Administration has carried out a number of tax audits focusing on transfer pricing. The tax audits have lead to significant adjustments to the taxable income of the Finnish entities. The Tax Administration has recently published statistics which reveal that the taxable income has been adjusted in 34 out of the 63 transfer pricing tax audits carried out in 2012–2017. The total amount added to taxable income in these tax audits is astonishing EUR 3.048 billion. This means that on average the additional taxable income added based on a transfer pricing tax audit has been close to EUR 90 million. As a consequence, the amount of additional taxes and other payments, such as late payment consequences and potential punitive tax increases, subject to a dispute can often be tens of millions – or even hundreds of millions.                   Some of these transfer pricing disputes have already been resolved in courts. However, many of the above mentioned disputes are still pending due to the length of the appeal processes. Respecting the Chosen Form of Transaction Is Often the Core Legal Question in the Disputes One of the most significant legal questions in the transfer pricing disputes is the borderline between recognition of the actual transaction and re-characterization of a transaction. Recognition means respecting the form chosen and followed by the taxpayer and assessing whether its pricing is at arm's length. In contrast, when a transaction is re-characterized, taxation is based on the form unrelated parties would have chosen (e.g. sale is considered an arm's length transaction form instead of lease). The Supreme Administrative Court has confirmed that re-characterization is unlawful in the context of transfer pricing adjustment (KHO 2014:119; requirement to respect the chosen business model was confirmed in KHO 2017:145). Re-characterization is only allowed when the general anti-avoidance provision is applicable which requires e.g. that there is an intention to achieve inappropriate tax benefit through an arrangement which is not supported by sufficient business reasons. Since this is usually not the case in the transfer pricing disputes, the Tax Administration's authority is often limited to assessing the pricing of the actual transaction carried out between group companies. Regardless of the Supreme Administrative Court's published case law, disputes around the concepts of recognition (or delineation) and re-characterization continue to surface. When Facing Litigation the Taxpayer Needs to Prepare for a Complex and Lengthy Process Litigation phase in a transfer pricing dispute is often complex and the processes tend to last for several years. There are often several areas subject to dispute; understanding of the facts, legal basis for the transfer pricing adjustment, pricing and valuation, and often also tax procedural questions. The challenge is to present the multidimensional case, usually following extensive correspondence with the Tax Administration in the tax audit, in an understandable way to the Board of Adjustment and the courts. In many of the major transfer pricing disputes the case has ultimately been decided fully or partly in favor of the taxpayer in the appeal process. Prudent planning and good argumentation are essential to overturn the Tax Administration's position. In transfer pricing cases there is also possibility to refer the case to a Mutual Agreement Procedure between the countries involved. This can take place instead of or after the domestic appeal process. In the Mutual Agreement Procedure the authorities from both countries negotiate how the double taxation can be eliminated. The process is most effective between EU Member States whereas with other countries there is no guarantee that the authorities reach a conclusion at all.

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