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15. ACQUISITION OF COMPANIESThe total or partial acquisition of a Brazilian company by foreign capital may occur especially through:a) the acquisition of shares or quotas corresponding to the respective capital;b) the subscription of a capital increase in the company involved;c) the acquisition of an establishment;d) other means involving those listed above, but within a tax planning or corporate reorganization.An acquisition may be conducted directly by a company domiciled abroad or by its duly establishedsubsidiary in Brazil. The transaction may or may not involve the payment of a premium. The possibilityof setting off the premium paid by the acquirer with a view to its amortization and allocation asdeductible expense must be analyzed by a skilled professional, particularly when it comes toassessing the tax risks involved. For the purpose of setting off premiums, it is generally moreadvantageous for the acquisition to be made by the Brazilian subsidiary or by a company incorporatedin Brazil by the latter.Whatever method is adopted for the acquisition, special care should be taken by the foreign investor,with respect to the following:a) choice of a prospective local partner (in the case of a joint venture), based on an in-depth analysisof its financial conditions;b) analysis of the financial, market and legal status of the company involved;c) appraisal of the intended transaction, especially in relation to any premium to be paid;d) analysis of the company’s legal and accounting situation, particularly: tax registrations, licenses foropening and operating establishments, environmental licenses, possible special authorizations,depending on the company’s area of activity and its corporate, tax, labor and fixed asset status, andits situation in relation to judicial proceedings, contracts, environmental requirements, real estate(owned and leased), trademarks, patents, technology, the consumer protection code and sanitarysurveillance legislation;e) assessing whether it is necessary to submit the transaction to the Brazilian antitrust authorities.Among the issues listed above, the prior study of the financial situation of the company andprospective partner, and analysis of the company’s position in the market, and appraisal of the91