Pre-emption (Pre-emption Right)

Pre-emption rights grant existing shareholders the right to participate on a priority basis in transfers of shares or capital increases. In capital increases they protect the shareholding quota against involuntary dilution; in transfers of shares, they safeguard the continuity of the shareholder structure.

Pre-emption clauses are a standard component of investment agreements and must be cleanly coordinated with drag-/tag-along rights and rights of first refusal.