Navigating M&A transactions in South Africa involves selecting the governing law. Although South African law typically governs transactions involving locally incorporated target companies, parties have the flexibility to opt for the laws of any jurisdiction, regardless of its connection to the target. This becomes particularly pertinent in the backdrop of the escalating volume and value of cross-border private M&A transactions over the past decade.
When deciding on the governing law, both buyers and sellers should consider various factors including the impact on the format and content of the transaction documents, the need for deal certainty, pricing dynamics, and the nature and extent of recourse in case of breaches, such as breaches of representations and warranties.
As the cross-border M&A arena continues to thrive, a thoughtful approach to jurisdictional choice enhances the resilience and success of these transactions.