n Acta Juridica - A critical analysis of the new South African takeover laws as proposed under the Companies Act 71 of 2008 : corporate governance and mergers & takeovers : part ll

Volume 2010, Issue 1
  • ISSN : 0065-1346
  • E-ISSN: 1996-2088



This chapter analyses in detail the provisions of the Companies Act 71 of 2008 relating to business acquisitions, schemes of arrangement (insofar as they relate to takeovers) and takeover offers. In so doing, it compares the new provisions against, first, the pre-existing South African law, second, the comparable provisions in the United Kingdom, and third, where points of interest arise, the comparable provisions in the United States and Australia. The chapter highlights where such takeover laws diverge and explores the reason for such divergence, focusing on the interaction between two principal objectives of takeover law, the protection of stakeholders' interests and the enhancement of the market for corporate control, and suggests that divergence can largely be explained contextually by considering the particular markets and the particular composition and expectations of the market users. The chapter finds that the new South African provisions progress significantly from the pre-existing South African law, and that such progression has been effected by absorbing and adapting elements from the laws of the UK, in particular, but also, where appropriate, Australia and the United States. It notes that such absorption should improve efficiency and so encourage investment, as well as align South Africa's corporate takeover laws with other developed corporate law regimes. Finally, the chapter argues that adaptation, where material, largely derives from South Africa's particular social, political and economic context, its market and its market-users, and reflects the utmost importance of stakeholder protection, and in particular minority shareholder protection.

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