Mergers & Acquisitions

M&A transactions are typically structured by way of either:

• a share acquisition; or
• an asset/business acquisition.

Share acquisitions: A share acquisition involves an offer for some or all of the shares in the target from the existing shareholders (which may also include newly issued shares). Through this transaction, the buyer acquires an interest in the target, which indirectly includes both all its assets and all its debts and liabilities.

Shares in private companies are generally acquired through a share purchase agreement and the shares are transferred in accordance with the Companies Act 2016.

Share acquisitions in public companies are made via open market transactions on the stock exchange. Acquisitions of public companies are subject to the guidelines issued by the Securities Commission, which apply to:

• issues and offerings of equity securities; and
• proposals which result in a significant change in the business direction or policy of a listed company.

The Code on Takeover and Mergers 2010 also applies to transactions relating to:

• corporations that are listed on a stock exchange;
• unlisted public companies with more than 50 shareholders and net assets of MYR 15 million or more;
• business trusts that are listed in Malaysia; or
• real estate investment trusts that are listed in Malaysia. 

Asset/business acquisitions: These acquisitions may be effected through the purchase of some or all of a company’s assets and/or its business. As the company is a separate legal entity, the transaction will typically require the transfer of identified assets, contracts and employees of the target by way of an asset/business transfer agreement.

Additional approvals: Transactions in relation to companies in certain sectors - particularly those requiring licences to operate - may be subject to further approval requirements by the relevant authorities. 

Complexity: A share acquisition is generally straightforward, in that a prospective buyer will acquire interests in the target in a way which does not generally involve additional transactions for the transfer, assignment or novation of assets, contracts or employees.

However, the due diligence for a share acquisition is generally more extensive, as it must address potential debts and liabilities of the target.

An asset/business acquisition may be comparatively more complex, as:

• the buyer will need to identify the specific assets, contracts or employees to be acquired;
• the parties will need to consider the need for, and additional steps and agreements to effect, the transfer, assignment and/or novation of employees and contracts, which:
• • may be numerous in number;
  • could potentially require third-party consent or approval; and
  • may involve obtaining fresh licences and permits for operations.
• Additionally, transactions involving businesses with unionised employees will be subject to the terms of collective bargaining agreements; and
• the attendant implications on timing for the completion of these more complex transactions must also be taken into account.

The due diligence for an asset/business acquisition is generally more limited, focusing only on the assets to be acquired.

Tax considerations: The applicable stamp duty for share acquisitions is lower, at 0.3% of the consideration price or market value of the shares (whichever is greater) on the date of transfer. Stamp duty on contract notes for trading of listed shares is 0.1% and is capped at MYR 1,000. Capital gains tax may apply to disposals of shares in private companies.

In respect of asset/business acquisitions, stamp duty is levied on a scale at up to 4% of the consideration price or the market value of the assets (whichever is greater) on the date of transfer.

Additional tax considerations include the following:

• In the case of share acquisitions, unused tax attributes and tax incentives of the target may be retained. However, in the same vein, historical tax and other liabilities will also be retained.
• In the case of asset/business acquisitions, any interest incurred to fund the acquisition of plant, equipment and other assets used in the trade or business is generally tax deductible. However, the benefits arising from any losses or unused tax attributes and any other incentives accruing to the company will remain with the target.
• Where real property is involved, real property gains tax may apply.

Common factors that will influence the choice of sale process/transaction structure include:

• the nature and complexities of the business of the target;
• whether there are multiple entities operating the target’s business;
• whether the target holds any significant licences, approvals or registrations;
• the types of assets and number of employees that make up the business; and
• tax considerations (ie, stamp duty or tax benefits).

During the initial preparatory stage of an M&A transaction, parties often enter into a preliminary agreement (which is generally non-binding), such as:

• a term sheet/letter of intent;
• a memorandum of understanding; or
• (where applicable) an offer letter.

Some form of non-disclosure agreement may also be entered into between the parties.

Break fees are permitted in Malaysia and are typically forfeited by the non-defaulting party if an event occurs which results in non-completion of the transaction by the defaulting party - for example:

• revocation of a licence; or
• non-occurrence of a specific event.

However, in certain circumstances, the target may be prohibited from paying the break fees if this would be considered to constitute financial assistance (see question 2.5).

Smaller transactions may be funded through internally generated funds or equity, while larger transactions often involve some debt financing. Some transactions may also involve share swaps, where shares are issued by the purchaser as consideration for acquiring the target’s shares or assets/business.

In private M&A transactions, the parties will typically engage a range of advisers - from tax advisers to financial advisers, lawyers and potentially valuers to:

• carry out due diligence;
• provide advice; and
• assess and evaluate the transaction.

In the case of public M&A transactions, where the Code on Takeover and Mergers applies, the bidder is required under the Rules on Takeovers, Mergers and Compulsory Acquisitions to seek advice from a ‘recognised principal adviser’. Only recognised principal advisers are permitted to submit proposals under the code and the rules. Additionally, the rules require the target’s board of directors to appoint an independent adviser to provide comments, opinions and recommendations on the offer.

The target in a private M&A transaction is generally prohibited from paying the buyer’s adviser costs in relation to the transaction, as the Companies Act prohibits companies from providing any financial assistance - whether directly or indirectly - in relation to the purchase of any shares in the company or a holding company.

However, the Companies Act provides that a private company may in certain circumstances, by way of special resolution, provide financial assistance for the purpose of the acquisition of shares in the company or a holding company if the aggregate amount of financial assistance does not exceed 10% of the shareholders’ funds.

(a) Commercial/corporate

The buyer should consider whether there are any applicable equity requirements. In general, there are no restrictions on foreign investment participation in Malaysian companies. However, in certain sectors, foreign investment restrictions may apply, which mandate that a specific percentage of equity be held by either Malaysian or Bumiputera interests. A ‘Bumiputera’ is a Malay, Aborigine or native of the state of Sabah or Sarawak, as defined under Malaysia’s Constitution.  

For clarity, the term ‘Bumiputera interests’ refers to: 

• a Bumiputera individual;  
• a Bumiputera institution or trust agency; and/or  
• a locally incorporated company or institution in which the persons listed above hold more than 50% of the voting rights in the entity. 

(b) Litigation

A buyer should take steps to ensure whether there are any current, pending, contingent or threatened litigation, disputes, court proceedings and/or winding-up proceedings against the target, as these may impact on the valuation of the target, among other things.

Without specific information about any such proceedings, a general litigation search cannot be carried out on the target through the publicly available official national centralised databases. Nonetheless, with appropriate specific information, searches may be performed at the courts. Searches may also be performed through:

• certain regulatory authorities;
• credit rating agencies; and
• due diligence solutions service providers.

(c) Tax

Effective financial and tax due diligence helps a buyer to ascertain whether the target has complied with Malaysian tax law. The buyer can also ascertain:

• any potential transactional tax costs; and/or
• any potential tax benefits or liabilities.

(d) Employment

Under Malaysian law, there are specific requirements for the employment of local and foreign employees. A buyer should ensure that the target has complied with the relevant employment laws and regulations, including having obtained appropriate employment permits for foreign employees. Malaysian employment law is generally pro-employee.

The Employment Act 1955 and related laws also:

• require employers to make statutory contributions (eg, the Employees Provident Fund, the Social Security Organisation and the Employment Insurance System); and
• include provisions on:
• • permitted or required working hours;
  • overtime;
  • rest days;
  • holidays;
  • annual leave; and
  • retrenchment benefits.

Where there is a need for the transfer of employees, particularly in an asset/business transaction, consideration should be given to the employment legislation in order to:

• avoid any unfair dismissal claims; and
• take into account timing considerations to complete the transfer of employees as part of the transaction.

(e) Intellectual property and information technology

A buyer should consider whether a target has applied for, or is the registered proprietor of, any trademarks, patents or other IP rights in Malaysia. Searches may be conducted with the Intellectual Property Corporation of Malaysia (MyIPO) to ascertain whether any such applications or registrations exist.

(f) Data protection

Data protection in Malaysia is governed by the Personal Data Protection Act 2010 (PDPA). The buyer should consider:

• whether the target processes, has control over or authorises the processing of any personal data; and
• if so, whether the target has complied with the PDPA.

(g) Cybersecurity

Following the Cybersecurity Act 2024 and its subsidiary legislation, which came into force on 26 August 2024, the buyer should also consider whether the target, if classified as a ‘service provider’ under the Cybersecurity Act, has complied with relevant laws.

(h) Real estate

A buyer should consider whether the target owns or uses any real property - whether owned, tenanted or leased - and appropriate steps should be taken to diligence such ownership or use. In particular, the focus should be on compliance with relevant land laws and municipal and local government requirements, including potential risks arising from land contamination, where necessary.

Common searches include the following:

• company searches at the Companies Commission of Malaysia, which discloses general corporate information such as:
• • the principal activity and identity of the shareholders and directors of the target; and
  • the latest filed financial information and encumbrances;
• winding up, insolvency and bankruptcy searches at the Department of Insolvency;
• IP searches at MyIPO to ascertain whether a target has applied for or owns any IP rights;
• land searches at the Land Office/Registry to identify:
• • the registered owner of any property;
  • the category of use of such property; and
  • other terms attached to the property; and
• litigation searches through:
• • the e-Filing System;
  • the Industrial Court of Malaysia; and
  • litigation search platforms such as LexScout.

In Malaysia, it is not common for vendors to prepare and provide a due diligence report in private M&A transactions. Instead, prospective buyers will usually be granted the right to conduct buyer due diligence to identify any risks associated with the target.

However, in an acquisition through an auction process involving multiple bidders, the vendor may provide an information memorandum to potential bidders, subject to appropriate disclaimers. In such circumstances, the parties are generally free to negotiate and determine the extent and limitations of reliance on the information memorandum. If the information memorandum is not sufficiently comprehensive or further details are required, the bidder may engage its own advisers to seek additional information or advice.

The ability of a buyer to rely on any information provided, as well as any caps on liability for the vendor, may be negotiated between the parties.

As mentioned in question 3.1(a), certain sectors impose foreign equity ownership restrictions which mandate that a certain percentage of shares be held by either Malaysian or Bumiputera interests.

Sectors that impose foreign equity restrictions include:

• the telecommunications sector, regulated by the Malaysian Communications and Multimedia Commission;
• the financial services sector, regulated by the Central Bank of Malaysia - Bank Negara Malaysia;;
• distributive trade services, regulated by the Ministry of Domestic Trade and Consumer Affairs; and
• the petroleum industry, under the purview of Petroliam Nasional Berhad.  

Further, transactions that could potentially affect competition of the market in Malaysia are subject to regulation. The Competition Act 2010, overseen by the Malaysia Competition Commission (MyCC), governs and prohibits anti-competitive practices such as:

• anti-competitive horizontal and vertical agreements; and
• abuse of dominant positions.

Currently, the Competition Act does not regulate merger control. However, as part of its Strategic Plan 2021–25, MyCC has initiated the process of amending the Competition Act to introduce merger control regulations – although it has yet to indicate when the amendments will come into force. The introduction of a merger control regulation would empower MyCC to review proposed transactions and issue and make necessary orders to maintain market competitiveness.

The acquisition of real property or interests in real property by non-Malaysians is also subject to approval and parties will need to take into account timing considerations when planning and structuring their transactions.

The Companies Commission of Malaysia has general jurisdiction over all companies in Malaysia in order to ensure compliance with the Companies Act, which applies to all companies. In general, there are no restrictions on the transfer of shares in a private company under Malaysian law. Where there are contraventions of the Companies Act, penalties include fines and imprisonment on conviction.

The Securities Commission and Bursa Malaysia oversee transactions with regard to public listed companies, including transactions which are subject to the Code on Takeover and Mergers and the Bursa Malaysia listing requirements. These bodies have powers to direct and ensure that companies abide by the relevant guidelines and obligations, including the power to impose requirements such as the following:

• the suspension of trading of shares;
• delisting;
• the imposition of shareholder approval requirements; and
• the grant of approval for certain transactions.

Where there are contraventions of the guidelines or obligations, penalties include fines and imprisonment on conviction.

Also, as discussed in question 4.1, MyCC is the regulatory body that oversees competition matters.

Some sectors - particularly those requiring licences to operate - may be subject to further approval requirements by the relevant authorities, which have a right, among other things, to impose conditions in order for licences to be issued. 

Stamp duty applies to the transfer of shares and assets that are the subject matter of the transaction. Where the parties have not agreed otherwise, the obligation to pay stamp duty rests with the buyer.

Real property gains tax may also apply where interests in real property are transferred.

Additionally, gains or profits from the disposal of capital assets by companies, limited liability partnerships, cooperatives or trust bodies after 1 January 2024 are subject to tax.

The term ‘capital assets’ encompasses:

• shares of unlisted companies incorporated in Malaysia;
• movable and immovable property situated outside of Malaysia; and
• shares of foreign controlled companies deriving value from real property in Malaysia.

The rates of tax are as follows:

• Disposal of capital assets situated in Malaysia acquired before 1 January 2024:
• • 10% on every ringgit of chargeable income from the disposal; or
  • 2% on the gross disposal price
• Disposal of asset situated in Malaysia acquired on or after 1 January 2024: 10% on every ringgit of chargeable income from the disposal.
• Disposal of foreign capital assets: Prevailing income tax rate on gains received

Customary representations and warranties commonly relate to:

• the vendor’s capacity and authority to enter into, perform and deliver on its obligations pursuant to the transaction documents;
• ownership of the shares or assets;
• the accuracy and completeness of information (eg, constituent documents, corporate registers and minute books, and accounting and tax records) given by the vendor;
• material contracts of the target that have been disclosed by the vendor;
• compliance with legal and regulatory requirements; and
• compliance with relevant employment laws (especially with regard to statutory contributions required under the Employees’ Social Security Act 1969 and the Employee Provident Fund Act 1991).

In case of misrepresentation, the agreement may be voidable at the option of the innocent party; while in case of a breach of warranty, the innocent party will normally be entitled to claim damages from the offending party. Indemnities may also be obtained from the vendor in respect of certain contingent liabilities.

Typical limitations to liability may include:

• the seller’s maximum liabilities being capped at the total consideration amount;
• capped or uncapped liabilities relating to specific liabilities - in particular, contingent liabilities;
• a cap on the period within which the buyer can bring a claim, which may vary depending on the transaction but which generally ranges from six to 24 months; and
• an agreement between the parties to share potential liabilities of the target.

In Malaysia, it is still relatively uncommon for buyers to seek warranty and indemnity insurance, particularly for smaller transactions - although the use of warranty and indemnity insurance for M&A transactions has been increasing.

Typical approaches include:

• agreeing to the retention of part of the consideration; and
• obtaining a guarantee from the directors, shareholders and/or holding company.

It is common for restrictive covenants such as non-compete clauses and/or non-solicitation (of customers and/or employees) clauses to form part of the terms of a transaction.

Non-compete clauses in Malaysia are generally unenforceable, with specific exemptions, such as where there is a transfer of goodwill. Even where there is a transfer of goodwill, prospective buyers will negotiate for a reasonable timeframe for the non-compete clause to ensure that it is not deemed unreasonable by the courts and hence found unenforceable. Common timeframes for such clauses are 12-24 months.

It is common for parties to agree to conditions precedent such as no MAC where there is a gap between signing and closing. Representations and warranties will typically be reiterated at completion.

Conditions precedent will also be included where approvals and/or licences are required. Where interests in real property are being acquired by a non-Malaysian, approval will need to be obtained and this will be a condition precedent in the transaction documentation.

In the context of public M&A transactions involving a takeover transaction, the timeline is set out in the Rules on Takeovers, Mergers and Compulsory Acquisitions, with the process taking between four and five months. Where 90% or more of the shares in the target have been acquired pursuant to a takeover offer, the time taken to complete the compulsory acquisition of the remaining shares (if pursued) may potentially be longer if the remaining shareholders do not cooperate. 

Generally, in public M&A transactions, timing will be subject to:

• whether the listed entity is required to obtain approvals, particularly from its shareholders or other third parties; and
• the guidelines promulgated by the Securities Commission and/or Bursa Malaysia.  

The timetable for private M&A transactions will vary depending on the complexities of the transaction. Straightforward transactions can be completed within a few weeks of execution of the transaction documentation; although where approvals and consents are required from third parties, these transactions may stretch to three months or longer.

Key milestones will include:

• execution of a letter of offer/memorandum of understanding;
• completion of due diligence;
• approvals being obtained from shareholders or third parties;
• regulatory approvals being obtained; and
• fulfilment of conditions precedent.

It is fairly common for bidders to build a stake in the target prior to launching an offer. A common strategy is for bidders to:

• negotiate and purchase shares from a person holding a management position in the target or a main shareholder; and
• invite that person to be a person acting in concert in the takeover exercise.

Such person(s) will continue or assist with the management of the company on a day-to-day basis for a specified transition period following completion of the takeover exercise or possibly stay on in the company.  

Any stake-building strategy should also take note of the relevant disclosure obligations and the mandatory offer threshold. A mandatory offer obligation is triggered where the offeror:

• acquires, holds or exercises control of more than 33% of the voting shares of the target;
• holds between 33%-50% of the target’s voting shares and then acquires more than 2% of the voting shares in any six-month period; or
• acquires 33% or less of the target’s voting shares, where the Securities Commission exercises its discretion to trigger the mandatory offer requirement.

Prospective bidders may also consider acquiring irrevocable commitments from certain shareholders. 

An offeror may compulsorily acquire shares from any remaining minority shareholders if it has:

• made a takeover offer for all shares or all shares in any particular class in the target; and
• received acceptances of not less than nine-tenths in the nominal value of the offer shares.

Minority shareholders may choose to sell to the offeror at any time before the end of the period in which the takeover offer can be accepted, subject to the offeror having acquired (by virtue of acceptance of the takeover offer) not less than nine-tenths in value of all shares in the target.

Minority shareholder rights: The Companies Act prescribes legal remedies for minority shareholders where:

• the affairs of the company are being conducted or the powers of the directors are being exercised in a manner that is oppressive to the minority shareholders; or
• some act of the company has been done or is threatened or some resolution has been passed or is proposed which unfairly discriminates against the minority shareholders.

In such cases, the court may make an order to:

• direct or prohibit any act or cancel or vary any transaction or resolution;
• regulate the conduct of the affairs of the company in the future;
• provide for the purchase of the shares or debentures of the company by other members or debenture holders of the company or by the company itself;
• in the case of a purchase of shares by the company, provide for a reduction in capital of the company; or
• provide that the company be wound up.

The Code on Takeover and Mergers requires that offerors satisfy themselves and their financial advisers that:

• they have sufficient financial capabilities to implement the takeover; and
• each offeree that accepts the offer can be paid in full.

Additionally, offerors must include a confirmation that the resources available to the offeror are sufficient. This is often done by way of confirmation from a financial institution that adequate funds are available for the exercise. The Securities Commission may require evidence to support this statement.  

Bursa Malaysia will suspend trading of the securities of a listed company if the public spread of its total listed shares is 10% or less.

Where the bidder has announced that it intends to maintain the listing status of the target, any suspension or listing will be relisted only upon the target’s full compliance with the public holding spread requirements or as may be determined by Bursa Malaysia.

To date, bumpitrage is not a common feature in public takeovers in Malaysia.

Pursuant to the Rules on Takeovers, Mergers and Compulsory Acquisitions, in the case of a mandatory takeover offer, the offer price must not be less than the highest price paid or agreed to be paid by the bidder or persons acting in concert for any voting shares or voting rights to which the takeover offer relates during the offer period and in the six months prior to the beginning of the offer period.

In the case of a voluntary offer, the rules state that the offer price:

• must not be less than the highest price paid or agreed to be paid by the bidder or persons acting in concert for any voting shares or voting rights to which the takeover offer relates during the offer period and in the three months prior to the beginning of the offer period; and
• should not be substantially below the market price of the shares in the target.

Where a mandatory offer obligation is incurred, the offer can only be conditional upon the offeror having received acceptances which would result in the offeror and persons acting in concert holding in aggregate more than 50% of the voting shares or voting rights in the target. Where the offeror already holds or is entitled to acquire more than 50% of the voting shares or voting rights of the target, the offer must be unconditional unless otherwise approved by the Securities Commission.

A voluntary offer must be conditional upon the offeror having received acceptances which would result in it holding in aggregate more than 50% of the voting shares or voting rights in the target. In addition, the offeror may include other conditions, including a MAC condition, except where the fulfilment of such conditions depends on:

• the subjective interpretation or judgment of the offeror; or
• whether or not a particular event occurring is within the control of the offeror.

It is common for the offeror to seek to obtain irrevocable commitments to tender or vote in favour of an offer by principal shareholders of the target. Negotiations between the offeror and certain shareholders are commonly undertaken prior to the takeover offer being made, but the parties must take into account the requirements for announcements to be made under the Rules on Takeovers, Mergers and Compulsory Acquisitions. Irrevocable undertakings obtained must be disclosed in the offer document. 

The offeror must be mindful that such irrevocable undertakings could, in certain circumstances, give rise to such shareholders being regarded as persons acting in concert.  

Separately, the general position is that all shareholders should be treated equally. Accordingly, save where written approval has been obtained from the Securities Commission, offerors and persons acting in concert with them are prohibited from making any arrangements with favourable conditions for selected shareholders which are not extended to all shareholders.  

In Malaysia, hostile bids are permitted but uncommon, as hostile bidders are typically denied the opportunity to conduct due diligence, leaving them to rely on publicly available information. If there are competing offers, the Code on Takeover and Mergers and the Rules on Takeovers, Mergers and Compulsory Acquisitions also establish auction procedures for such competing takeover offers in the later stages, with the Securities Commission determining the terms.

A bidder that has a firm intention to make a takeover offer must make an immediate announcement through a press notice upon incurring this obligation in the manner prescribed in the rules. The bidder must also send written notice of the same to:

• the target’s board or its designated adviser;
• the Securities Commission; and
• Bursa Malaysia (if the bidder or the target is listed).

The rules mandates the target’s board to:

• make an announcement to the public through a press notice or to Bursa Malaysia (if the company is listed) upon receiving notice from the bidder; and
• notify all of shareholders of a takeover bid within seven days of receipt of the offer.

The bidder must make an announcement by way of a press notice and send written notice of the same to:

• the target’s board or its designated adviser;
• the Securities Commission; and
• Bursa Malaysia (if the bidder or the target is listed).

The target’s board must:

• make an announcement through a press notice; and
• notify all of its shareholders.

In the context of takeovers, directors are not expressly prohibited under the Rules on Takeovers, Mergers and Compulsory Acquisitions from employing defensive measures. However, unless approval has been obtained from the shareholders of the target, the target’s board must not undertake any action or make any decision that:

• could frustrate a bona fide takeover offer; or
• deny shareholders the opportunity to decide on the merits of a takeover offer.  

Actions or defensive measures that could result in such circumstances include: 

• the issuance of any authorised but unissued shares of the target and the sale of treasury shares into the market; 
• the issuance or grant of options in respect of any unissued shares of the target;  
• the sale, disposal or acquisition of material assets of the target;  
• the execution of contracts outside the ordinary course of business of the target; and
• the declaration of dividends outside the normal course or usual quantum.

While deal value across Asia-Pacific had reportedly decreased in the past 12 months, M&A transactions in Malaysia have seen a steady increase and activity remains robust. This could potentially be attributed to:

• the Malaysian government’s focus on developing advanced manufacturing capabilities and increasing the country’s renewable energy capacity, particularly to cater for digital infrastructure assets; and
• companies looking to diversify their production base outside of China.

Notable M&A transactions in the last 12 months include:

• the privatisation of UMW Holdings Bhd by Sime Darby Bhd (SDB), which saw SDB acquire Permodalan Nasional Bhd’s 61.18% stake in UMW Holdings for MYR 3.574 billion, followed by a mandatory general offer for the remaining stake at around MYR 2.27 billion;
• SDB’s sale of its 50% stake in Ramsay Sime Darby Healthcare Sdn Bhd to Columbia Asia Healthcare Sdn Bhd for MYR 5.7 billion;
• Pantai Holdings Sdn Bhd’s acquisition of Island Hospital Sdn Bhd from Comprehensive Care Sdn Bhd for MYR 3.92 billion;
• TIMEdotCom Bhd’s disposal of a stake in AIMS Data Centre Holding Sdn Bhd to DigitalBridge Group Inc for MYR 2 billion;
• Yinson Holdings Bhd’s acquisition of floating production storage and offloading vessel Atlanta for MYR 2 billion;
• Malaysia Building Socitey Bhd’s acquisition of Malaysian Industrial Development Finance Bhd from PNB for MYR 1.01 billion; and
• the privatisation of Boustead Holdings Bhd by the Armed Forces Fund Board for MYR 703 million.

In addition, the controversial takeover offer of Malaysia Airports Holdings Bhd for MYR 12 billion by a consortium comprising Khazanah Nasional Bhd, Employees Provident Fund, Global Infrastructure Partners and Abu Dhabi Investment Authority is expected to be finalised by the end of 2024.

As discussed in question 4.1, the Malaysia Competition Commission (MyCC) has initiated the process of amending the Competition Act to introduce merger control regulations. As part of this exercise, MyCC launched an online public consultation on 25 April 2022, which ended on 27 May 2022. In March 2024, Deputy Domestic Trade and Cost of Living Minister Fuziah Salleh reportedly stated that amendments to the Competition Act and the Competition Commission Act 2010 will be tabled in Parliament in 2024.

Considerations for the smooth closing of M&A transactions in Malaysia include the following:

• Ensure that any equity conditions relating to a transaction are taken into account, so that, where necessary, appropriate steps are taken to obtain approvals.
• Check on the terms of any licences or approvals of the target.
• Factor in time implications where consents and/or approvals must be obtained from third parties or the relevant authority, as these may vary depending on the circumstances.
• Where real property is involved, ensure that conditions and requirements under law and by municipal and/or governmental authorities have been complied with.
• Obtain clear information from the vendor with regard to disputes or litigation, including in particular contingent, pending or threatened litigation.
• Ensure that warranties are adequate but proportional to the proposed transaction.