The high rates of economic growth exhibited by SAR over the recent years have made it an attractive destination for foreign investors considering launching a business in South Africa. So, let’s take a look at what requirements they must meet to successfully conduct an M&A transaction in Africa.
Acquisitions & takeovers of public enterprises in SAR are normally done as:
- Statutory or regular mergers allowing two or more companies to form one entity;
- M&A agreements whereby a company & its stakeholders planning to conclude an M&A deal in South Africa sign an M&A agreement (normally used for friendly takeovers of PLCs);
- Public offering of a target company’s shares;
Selling all or most of a target company's assets (whereby investors seeking to acquire a South African company (including its liabilities) may purchase its business or assets); unlike selling shares, transactions like these have a more complex structure & require including in an M&A agreement:
- each & every asset to be purchased;
- each & every obligation an acquirer undertakes to fulfil.
Information to be Disclosed
Negotiations related to acquisition of a public company in South Africa are generally confidential. However, a notice must be issued if there's any concern about privacy. An announcement must also be made if an acquirer:
- has communicated their intention to make an offer;
- is ready to proceed with making good on their offer.
The announcement must contain essential details related to the offer, including:
- an acquirer’s identity;
- terms of the offer (including the mechanism of implementation & information about guarantees);
- information on beneficial interests of the company directly or indirectly controlled by the acquirer.
Normally, authorities can’t restrict the conclusion of M&A deals in the South African Republic; however, they may require participants to comply with competition requirements or impose restrictions on deals involving regulated industries.
Need more information on conducting an M&A transaction in South Africa? Looking for advice on regulation of M&A transactions in South Africa? IQ Decision UK can handle that and a lot more. Sign up for an individual consultation & let our experts provide you with all the necessary information on doing business in the jurisdiction.