The introduction of the statutory merger in South African corporate law : majority rule offset by the appraisal right (Part 1)

Abstract

A fundamental and radically new concept of the statutory merger, borrowed from the United States of America, is to be introduced into South African law by the new draft Companies Bill, 2007. The statutory merger, in essence, is a simple, uncomplicated and effective procedure by which two or more companies may merge by agreement, with the approval of the prescribed majority of their shareholders, and without the need for any court approval. Instead of recourse to a court, dissenting shareholders have the right to opt out, by withdrawing the fair value of their shares in cash. This they do by exercising their appraisal rights.