The Companies Act, 71 of 2008 (“the Companies Act “), has brought a significant change in the manner South Africa implements and perfects mergers and amalgamations. With a complete paradigm shift, it aligned South Africa with international best practices and the statutory merger provisions adopted a U.S. style approach in relation to the requirements and procedures. This article takes a look at the requirements as set out in section 113 read with section 115 of the Companies Act.
MERGERS AND AMALGAMATIONS DEFINED
Any two or more companies (including holding and subsidiary companies) may, subject to satisfying the solvency and liquidity test, merge by entering into a transaction which results in either:
REQUIREMENTS FOR A MERGER
The requirements for a merger by a company with any other company are the following:
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