23 Aug 2016
MALAYSIA: Less Than 50% of Equity Needed to Initiate Takeovers under New M&A Regulations
Company takeovers can now be initiated by parties holding less than 50% of the equity and all parties must abide by a clear code of practice while any merger or takeover is underway. These are two of the headline changes introduced in the country’s newly-implemented Rules on Takeovers, Mergers and Compulsory Acquisitions.
The new regulations apply to listed companies and unlisted companies with more than 50 shareholders and net assets of at least RM15 million (US$3.75 million). According to the Malaysian Securities Commission, the body that oversees all takeovers, mergers and related activities, the new regulations have been designed to protect shareholders’ interests and ensure that businesses in the country have an appropriate framework to work within and one that is in line with international standards.
The updated regulations should be read in conjunction with the revised Malaysian Code on Takeovers and Acquisitions.