Merger and acquisition (M&A) Basic Knowledge

 In Singapore, mergers and acquisitions (M&A) are governed by several laws and regulations, including the Companies Act, the Securities and Futures Act, and the Competition Act. Here are some key provisions that apply to M&A in Singapore:

Companies Act: Under the Companies Act, a merger involves the transfer of all assets and liabilities of one or more companies to another existing company or a new company. A merger requires the approval of the shareholders of each company involved, as well as the approval of the High Court of Singapore. The court will only approve a merger if it is satisfied that the merger is fair and reasonable to the shareholders of each company and will not be prejudicial to the interests of the creditors of the companies.

Securities and Futures Act: The Securities and Futures Act regulates the acquisition of shares in public companies. Under this Act, any person or entity that acquires more than 30% of the voting rights in a public company must make a mandatory offer to acquire the remaining shares. The offer must be made at a fair price and on the same terms and conditions as the initial acquisition.

Competition Act: The Competition Act regulates the competition aspects of M&A in Singapore. Under this Act, the Competition Commission of Singapore (CCS) has the power to investigate and block mergers and acquisitions that are likely to substantially lessen competition in Singapore. The CCS may also impose conditions on mergers and acquisitions to ensure that they do not harm competition.

M&A cases in Singapore:

1. Olam International Limited's acquisition of shares in NZ Farming Systems Uruguay Limited (2011): In this case, the Competition Commission of Singapore (CCS) approved Olam's acquisition of shares in NZ Farming Systems Uruguay Limited, subject to certain conditions. The CCS found that the acquisition would not lead to a substantial lessening of competition in Singapore, but imposed conditions to ensure that Olam would not gain an unfair advantage over its competitors in Singapore's sugar market.

2. Sembcorp Marine Ltd's proposed acquisition of PPL Holdings Pte Ltd (2020): In this case, Sembcorp Marine's proposed acquisition of PPL Holdings was blocked by the CCS due to concerns that the merger would lead to a substantial lessening of competition in the market for the design, construction, and repair of large commercial vessels. This decision was upheld by the Competition Appeal Board.

3. CMA CGM's acquisition of Neptune Orient Lines (2016): In this case, the High Court of Singapore approved the acquisition of Neptune Orient Lines by CMA CGM, subject to certain conditions. The court found that the merger was fair and reasonable to the shareholders of both companies and would not be prejudicial to the interests of their creditors.

4. LionGold Corp's acquisition of Castlemaine Goldfields Limited (2014): In this case, the Securities Industry Council (SIC) of Singapore censured LionGold Corp for failing to disclose material information to the public in relation to its acquisition of Castlemaine Goldfields Limited. The SIC found that LionGold Corp had breached the Singapore Code on Takeovers and Mergers, which requires companies to disclose all material information to the public in a timely and accurate manner.

These cases demonstrate the importance of complying with all applicable laws and regulations in M&A transactions in Singapore, including competition laws, securities laws, and disclosure requirements.