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Tag-Along Right

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Tag-Along Right
The contractually guaranteed right of a minority shareholder to sell his/her stake in a company if the majority shareholder does so. The tag-along rights further guarantee the exact same terms to the minority shareholder. This protects the minority shareholder from the possibility that a new majority owner will come along and ruin the company or take it in a direction disadvantageous to the minority shareholder. Tag-along rights are also called co-sale rights and are common in venture capital agreements.


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Tag-along rights give a shareholder the right to join in a transaction to sell his shares if another shareholder is selling his stake.
If the investor is not willing to remain a co-owner with the proposed third-party purchaser, the minority investor can elect to exercise its tag-along right and participate in the sale to the third party.
The merger of Politeno was designed to align the interests of all shareholders and will allow shareholders of Politeno that decide to become shareholders of Braskem full access to the benefits offered by Braskem to all of its shareholders, such as 100% tag-along rights in the event of a change of control," commented Carlos Fadigas, Braskem's VP - Finance and IR.
 
 
 
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