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Adam Klein
Aarom Michaeli
 

Landmark 2020 Judgment Elucidates Going Private Transactions
Dear Clients,

When we survey the Israeli M&A scene of 2020, what stands out alongside the many successful exit transactions is a judgment of the Tel Aviv District Court (Economic Division) regarding going private transactions. In August 2020, Judge Ruth Ronen handed down a landmark verdict denying a motion for class action certification relating to the acquisition of the minority shares of Osem Investments Ltd., Israel’s largest food manufacturer, by its parent company, Nestle S.A., the world’s largest food manufacturer. The comprehensive 250-page decision carefully weighs each of the plaintiff’s many claims against the integrity of the transaction process and the fairness of the price and elucidates various standards of judicial review.

We expect that this case will serve as a veritable textbook for the conduct of future going private transactions involving Israeli targets and the adjudication of lawsuits challenging them. As we discuss in this memo, the Court set a very high bar for an independent committee to earn the protection of the business judgment rule. At the same time, by applying a strict standard to the plaintiff’s attempt to prove the unfairness of the price, the Court leaves independent committees with the confidence that an earnest and thorough transaction process will be respected.

Our firm represented Nestle in the merger transaction and represented Nestle and Osem in the litigation of this case.

For the full review, please click here.
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The content in this Memo is provided for informational purposes only, and does not serve to replace professional legal advice required on a case by case basis. The firm does not undertake to update the information in this Memo, or its recipients, about any normative, legal, or other changes that may impact the subject matter of this Memo.
 
Should you have any questions or need additional information regarding this matter, please feel free to contact Adv. Adam M. Klein, Deputy Department Head of the International Corporate and Securities Department: adam.klein@goldfarb.com, or at: +972-3-6089986; or Adv. Aaron Michaeli, Head of the Commercial, Class Action and Insolvency Litigation Department: aaron.michaeli@goldfarb.com or at: +972-3-7101635.