Private mergers and acquisitions (M&A) in South Africa are primarily governed by the Companies Act, 2008, read with the Companies Regulations, 2011. This legislation outlines the legal framework for acquisitions, mergers, and disposals of businesses/companies.
The Takeover Regulation Panel (TRP), a statutory body established by the Companies Act, is tasked with regulating takeovers. The Companies Regulations include the Takeover Regulations that regulate M&A activity.
There are a number of other statutes and regulations that may be relevant to private M&A, including:
• The Competition Act, 1998, which requires M&A transactions above a certain size to be approved by the relevant competition authorities whose mandate is to ensure that transactions do not result in anti-competitive behaviour or substantial market concentration.
• The Exchange Control Regulations, which are enforced by the Financial Surveillance department of the South African Reserve Bank which oversees and regulates the movement of capital in and out of the country.
• Sector-specific statutes and regulations, for example in the banking, financial services, mining and telecommunications sectors.
Navigating the various applicable statutes and regulations is important for ensuring compliance and achieving seamless and successful M&A transactions.