Acquisitions and takeovers of companies are subject to the provisions of the Companies Act of 1973, whether the company or persons making the takeover bid are foreign or domestic. That Act contains strict provisions governing offers of shares to the public, and disclosures to be made in such offers and in takeover procedures.
In addition, the Securities Regulation Panel regulates acquisitions and takeovers involving public companies and large private companies, essentially where there is a change of control (presently defined as 35%) or there are certain increases in holdings in any year. The Panel's Code and Regulations contain strict provisions governing disclosures in affected transactions.
Anti-trust rules empower the Minister of Commerce and Industries to prohibit mergers and acquisitions that are deemed not to be in the public interest.
The Johannesburg Stock Exchange lays down rules regarding disclosures and procedures to be followed in relation to transactions affecting companies which are listed on it. These include cautionary announcements which must be made to shareholders in certain circumstances, and suspensions of listing when certain types of takeover bids are in progress.
Persons acquiring a majority of the issued shares in a company or control in any other form are usually required to make an offer to acquire the interests of the company's minority shareholders, on comparable terms.
Aside from the restrictions imposed by the exchange control authorities and the normal tax consequences of various types of acquisition methods, there are no significant differences between the methods used in South Africa and those commonly used in most Western economies for the structuring and financing of acquisitions.
Companies are prohibited from giving direct or indirect financial assistance or security for or in connection with purchases of shares in them or in their holding companies. Companies may not themselves purchase their own shares.
For further information please contact:
Werksmans Chambers, 22 Girton Road, Parktown, Johannesburg 2193
P.O. Box 927, Johannesburg 2000 South Africa
Enquiries: Mr Charles Butler
Telephone 27 (011) 488-0000
Telefax 27 (011) 484-3100/3200
E-Mail Address firstname.lastname@example.org
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