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REGULATION OF MERGERS AND ACQUISITIONS IN TERMS OF THE SOUTH AFRICAN COMPANIES ACT 71 OF 2008: AN OVERVIEW

https://doi.org/10.21684/2412-2343-2020-7-1-91-118

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Abstract

The Companies Act 71 of 2008 (the 2008 Act) replaced the Companies Act No. 61 of 1973, effective 1 May 2011. The 2008 Act was aimed at keeping pace with developments in company law internationally. It is not intended to entirely replace the well-established principles and has largely retained the pre-existing South African company law. The mergers and acquisitions provisions are aimed at creating transparent, efficient, and simple procedures. Different types of mergers and acquisitions are clearly defined as “affected transactions” or “offers” in section 117. Section 118 provides for companies to which the provisions apply. The reasons for regulating these transactions and powers of the regulator – The Takeover Regulation Panel, have been reviewed, clarified, and improved. The previous section on disposal of all or greater part of assets or undertaking of a company has been re-written. The 2008 Act further introduces a new type of affected transaction in section 113, in the form of a “merger” or an “amalgamation.” The 2008 Act has retained the scheme of arrangement in section 114, but has changed its format by removing compulsory court application and approval. The courts get involved under certain prescribed circumstances. The 2008 Act has enhanced shareholder protection for fundamental transactions in the form of section 164 – Appraisal Rights and section 115, dealing with shareholder approval of fundamental transactions. Some scholars and practitioners have criticised certain provisions. However, in general, the provisions have received favourable commentary. They regarded as progressive and comparable with others internationally.

About the Author

M. Phakeng
The Cape Bar – Society of Advocates
South Africa

Madimetja Phakeng 

40 Queen Victoria St., Cape Town City Centre, Cape Town, 8000



References

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2. Boardman N. ACritical Analysis of the New South African Takeover Laws as Proposed Under the Companies Act 71 of 2008, Acta Juridica 306 (2010).

3. Cassim M.F. The Introduction of the Statutory Merger in South African Corporate Law: Majority Rule Offset by the Appraisal Right (Part 2), 20 South African Mercantile Law Journal 147 (2008).

4. Wainer H.E. The New Companies Act: Peculiarities and Anomalies, 126(4) South African Law Journal 806 (2009).


For citation:


Phakeng M. REGULATION OF MERGERS AND ACQUISITIONS IN TERMS OF THE SOUTH AFRICAN COMPANIES ACT 71 OF 2008: AN OVERVIEW. BRICS Law Journal. 2020;7(1):91-118. https://doi.org/10.21684/2412-2343-2020-7-1-91-118

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ISSN 2409-9058 (Print)
ISSN 2412-2343 (Online)