This feature was borne out of sister publication, DealMakers, Awards event which always features prominently on the calendar of the "tombstone" parties calendars. For the past 14 years without prejudice has carried the names of the firms that were in the top places awarded to legal advisers for deals by value and flow in the Merger & Acquisition sector and by transaction value and flow in general corporate finance together with photographs of the event. This year was the 15th DealMakers Annual Gala Awards. It seemed appropriate to carry a feature on dealmaking; the articles cover just some of the aspects that have to be carefully considered in order to pull-off a successful deal.
Every one of us will, at some stage, have bought property, be it a bicycle from your classmate, your first second-hand car, or your dream home. When I bought my first bicycle from that classmate, I took it on face value and so was mortified (and out of pocket) when the chain snapped a few days later. I learned my lesson.
Section 44 of the Companies Act (71 of 2008) governs when a company may provide financial assistance for the purchase of its securities. (It is important to note that s44(1) carves out the application of the entire section 44 for financial assistance given in the ordinary course of business by a company whose primary business is lending money.)
A merger that looks good on the face of it can lose value when too many employees become anxious about what life will be like after the deal closes.
From the earliest days of the first Dutch settlement at the Cape, locals have been tempted to describe themselves as a "seafaring" nation. Whether this is accurate is open to debate. Although we do have a proud history of vessels that were registered on our flag, the size of the fleet has always been disproportionate to the volume of exports from South Africa (be it mineral resources, manufactured goods or reefer exports).
Despite economic conditions remaining tight, deals may still happen in Africa this year. China's slowdown, and the consequent pullback in commodities, together with drought conditions, a weak rand and the threat of a rating downgrade at home have generally brought about a pessimistic mood among local dealmakers.
Typically, when a business or part thereof is sold or transferred, all the rights and obligations in respect of that business would automatically transfer to the new owner. In an employment context, such rights and obligations could include restraint of trade agreements between an employer and its employees, which one would assume would transfer, in terms of s197 of the Labour Relations Act (66 of 1995) (LRA), to the purchaser of the business.
Notwithstanding economists calling 2015 a minefield through which investors were required to tread, with the Rand plummeting to record lows and (global) markets falling relatively flat, mergers and acquisitions within the borders of South Africa reached an all time high of approximately $4,7 trillion (R77,55 trillion), with the previous record being $4,296 trillion (R70,884 trillion) in 2007.