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.
This article was written by Maleka Femida Cassim before she joined the University of Pretoria.