The Executive Yuan passed the bill of the amended Mergers and Acquisition Act on November 21, 2013 to increase flexibility of mergers and acquisitions as well as protection for investors. Major amendments include:
- Adding a simplified form of mergers and acquisitions which can be undertaken without shareholders’ approval (such as mergers between affiliated companies);
- shares, cash, or other property can be used as consideration in share swap or spinoff transactions;
- a company holding the shares of another company participating in the merger or acquisition can exercise its voting rights in the shareholders meeting as to the approval of the transaction, and the same applies to a director who is or is appointed by the shareholder company to serve as the director in the company that is participating in the merger or acquisition;
- a public company should establish a special merger and acquisition committee to review the fairness and reasonableness of the transaction;
- in the event that a dissenting shareholder exercises the right to request the company to buy back the shareholder’s shares, the company should pay the price to the shareholder based on its own assessment and, after petitioning to the court requesting the court to assess the buyback price (with the respondents being those dissenting shareholders who have not reached agreement with the company on price), pay the additional amount to or receive the refund of the excess amount from the dissenting shareholder based on the court’s decision;
- deleting the current provision which deprives the right to severance pay of an employee of the merged or acquired company who is offered to work in the new company but declines the offer due to personal reasons.