Corporate Restructuring

A merger is a transaction where one or more companies transfer all of their assets and/or liabilities to either an existing company or a new company.

The Companies Act contains certain provisions that can facilitate mergers under certain circumstances. The relevant provisions are:

• sections 210 to 212: these provisions allow the shareholders and/or creditors of a company to agree upon a plan for the reconstruction of a company or amalgamation of two or more companies;
• section 306: a company in liquidation may utilize this provision to pass a special resolution (requiring a majority in number representing at least 75% of the votes cast) authorizing the liquidator to sell or transfer all or part of the company’s business or property to another company in return for shares in that company, which will then be distributed to the shareholders of the company in liquidation; and
• section 215A to J: two or more companies can amalgamate and continue as one company, which may be one of the amalgamating companies or a new company.

Mergers of public companies are regulated by the Securities and Futures Act and the Singapore Code on Takeover and Mergers. Specific requirements may apply to mergers in different industries.

The Competition Act (chapter 50B) prohibits mergers and acquisitions that substantially lessen competition in any market in Singapore (section 54).

A demerger is a transaction where a company transfers all of its assets and liabilities to two or more existing or new companies, or part of its assets to one or more companies.

There are no specific provisions in the Companies Act for demergers. However, sections 210 to 212 and 306 of the Companies Act can be used to facilitate demergers