Mergers and Acquisitions in Singapore

Legislation on mergers and acquisitions in Singapore

The main legal framework governing mergers and acquisitions is the Singapore Commercial Law. With respect to the sale of a company, Section 160 in the Companies Act provisions that the shareholders’ simple majority of votes should be obtained in order for the acquisition to take place. All Singapore shareholders part of the majority voting must be present at the general meeting when the decision is made.

Other legislation referring to mergers and acquisitions in Singapore is the Competition Act. Chapter 50B in the Competition Act prohibits mergers resulting from the decrease of competition within Singapore markets. Mergers are also regulated by the Code on Take-overs and Mergers which applies to the acquisition of voting power in public companies in Singapore. Other legislation referring to mergers and acquisitions refer are the Banking Act, the Finance Companies Act and the Singapore Employment Law.

The video below show the main steps to follow in merger and acquisition deals in Singapore:

Acquisition structures in Singapore

A Singapore company purchasing another business may do so:

• - by acquiring issued shares in the target company (a share sale),
• - by purchasing the target company with all its assets and liabilities (a business sale).

In the case of share sales, the buyer may be a foreign company. In the case of business sales, the purchasing company must be a local company, or a Singapore branch of a foreign company.

The share deal is a simple transaction as it only requires a transfer of ownership of the shares in the target company. The business deal is more complicated as all the target company’s assets must be transferred to the purchasing company in Singapore.

Our Singapore lawyers may offer you all the necessary information about mergers and acquisitions.

Public mergers and acquisitions in Singapore

The acquisition of a public company in Singapore can be achieved through:

• - general offers,
• - scheme of arrangements,
• - amalgamation proposals.

The most common practices are general offers when it comes to mergers and acquisitions of Singapore companies. General offers may be voluntary or mandatory. The mandatory offer must be done for all the target company’s shares, while voluntary offers can be made for all or a part of the target company’s shares.

For details about the mergers and acquisitions of public companies, please contact our law firm in Singapore.