South African Mercantile And Company Law

Author : MalekaFemida Cassim
Publisher :
ISBN 13 :
Total Pages : 30 pages
Book Rating : 4.:/5 (13 download)

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Download or read book The Introduction of the Statutory Merger in South African Corporate Law written by MalekaFemida Cassim and published by . This book was released on 2016 with total page 30 pages. Available in PDF, EPUB and Kindle. Book excerpt: A fundamental and radically new concept of the statutory merger, borrowed from the USA, is to be introduced in South African law. The statutory merger, in essence, is a simple, uncomplicated and effective procedure whereby two or more companies may merge by agreement, with the approval of the prescribed majority of their shareholders, and without the need for any court approval. Instead of recourse to a court, dissenting shareholders have the right to opt out, by withdrawing the fair value of their shares in cash. This they do by exercising their appraisal rights. This article addresses the concept of the statutory merger in general. The definition and the juridical nature of the statutory merger are discussed, followed by an analysis of the merger procedure and the inherent protective measures for shareholders and creditors. Next follows a discussion of the underlying policy issues that led to the introduction of the statutory merger procedure in South African law. Significant merger structures are adumbrated and analysed, with a specific focus on the triangular and reverse triangular merger, the freezeout merger and the short-form merger. The appraisal right is critically addressed. The discussion of the appraisal right encompasses both a critical analysis of the procedure for perfecting and exercising the appraisal right, as well as the valuation of shares in appraisal proceedings. (See also Part 1 of this article 'The Introduction of the Statutory Merger in South African Corporate Law: Majority Rule Offset by the Appraisal Right (Part 1)' (2008) 20 South African Mercantile Law Journal 1 - 33).