Artigos e Alertas


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Back to the future: digital signature in M&A Transactions

27/06/2019

In recent years, we have seen a significant growth in the number and in the volume of M&A transactions in Brazil. The volume of operations announced in 2018 grew 28% compared to 2017 but was smaller than the number of transactions announced in 2014, for example, as published by the Brazilian Association of Financial and Capital Market Entities (ANBIMA).

If compared to countries such as the United States and those of the European Union, M&A activities in Brazil are still shy and we are still crawling towards the de-bureaucratization of the transactions.

Although the negotiation practice applied in Brazil is very similar to North American and European models, including the use of clauses influenced by contracts from these countries, we are still living in the past as to the use of technological innovations that bring agility and greater efficiency to these processes. A great example of this is the execution of agreement through digital signatures.

In the United States, for example, a contract is considered validly executed by the parties if it is signed electronically (even without digital certification). In our country there is already a law validating the digital signature (the one issued by the Brazilian Public Key Infrastructure, ICP-Brasil). In this sense, the digital signature is already being widely used in the Brazilian courts, and the positive results in terms of efficiency and economy of resources are enormous. So why not use it to close deals? Why not move forward to the future?

The answers we hear are many, but they almost always go by the expressions “lack of legal certainty”, “possibility of invalidating the deal” and even “why change something that has been done in the same way for so many decades?”

But if technological evolution has already given us the necessary tools to remove any of these questions, then again, we ask, why not make use of the digital signature in M&A transactions?

The answer: we’re already doing this in our firm! Most of the transactions we conduct are being closed without the printing of one single sheet of paper, with only digital signatures of the parties. And the reality is that this has been widely accepted by our clients, from the most varied sectors of the economy.

For those who live in the M&A transactions world, used to print blocks and blocks of paper documents to be initialed and signed by several parties, the new process is shocking! It literally shows us that the future has arrived!

It is important to say that the validity and effectiveness of the business are totally preserved. In fact, digital signature is even more secured than physical signatures, as there is no way to forge it, not to mention the enormous savings of time and resources, avoiding, for example, traveling, endless meetings, endless paper prints, and so on.

The digital signature is a reality, and for M&A transactions it provides the parties with a better experience, with significant gains for everyone involved! To the future and beyond!

By Daniel Rodrigues Alves, lawyer at Candido Martins Advogados
societario@candidomartins.com.br