The reporting requirements on company mergers and demergers have been relaxed with effect from 31 December 2010.
The changes implement EU merger rules by exempting merging/demerging companies from the need to provide certain documents and information to shareholders when it doesn’t prejudice their rights and interests to do so.
When all shareholders of the merging/demerging companies agree, companies no longer have to provide:
- the report of the managing bodies about the merger/demerger terms, particularly the share exchange ratio
- accounting statements for the month before the date of the draft merger/demerger agreement/plan
- information from the managing bodies about material changes in assets/liabilities between the date of the merger/demerger report/agreement and the date of the general meeting to vote on the merger
Companies providing shareholder access via their website to merger/demerger documents and materials no longer need to make them available at their registered management address.
Companies may also send merger/demerger documents by to shareholders who have consented to receiving it in this way.
There are reduced reporting and disclosure requirements when a parent merges with one or more of its subsidiaries and the newly-merged company owns more than 90% of its predecessor(s) , and when a company demerges into new companies owned in the same proportions as its predecessor.
Law: amendment of Commerce Act