Draft law to support merger of industrial companies
Objectives: Subsidized loans and relief from capital gains tax
A draft law to offer long term subsidized loans for merging industrial companies is under study by the Parliamentary Finance and Budget sub-committee.
Industrialists are asking, in case of merger, for relief from several taxes such as those on asset reassessment. Fady Gemayel, Chairman of Association of Industrialists (ALI), said: “Our aim is to exempt the companies from paying this tax. The increase in asset valuation is just on paper, and has not been realized.” The tax can reach ten percent of the capital gain.
Gemayel said: “The purpose behind this proposed law is to encourage small enterprises to merge and establish larger institutions that have the ability to compete in the market.”
Ziad Bekdache, Vice Chairman of ALI, said: “Most of the companies are family businesses that do not live more than three generations.” He said that merging companies would transform them into institutions.
ALI said in a statement that merger between industrial companies is a good step, taking the lead from the success in the banking sector. Gemayel said that mergers stimulate competition and increase production capacity of companies.
Bekdache said that the Oriental Paper Product (OPP) company, his family business that was started by his grand father, is a good example. He said that after selling one third of the shares of his company to another holding company, the change mentality of the shareholders resulted in a 90 percent boost for the business.
Date Posted: Aug 11, 2014