SOUTH AFRICA Trends and Developments Contributed by: Ezra Davids, Tholinhlanhla Gcabashe, Nanga Kwinana and Cathy Truter, Bowmans
The Minister of Trade, Industry and Competition, in consultation with the Competition Commission, has amended the merger notification thresholds and merger filing fees in South Africa, notably increasing these trigger thresholds with effect from 1 May 2026. There remain two categories of mergers that attract mandatory notification obligations and require approval prior to implementation. These are inter - mediate and large mergers. The combined assets or turnover threshold for intermediate mergers raised to ZAR1 billion (with the target being required to achieve at least ZAR200 million in assets or turnover) and for large mergers to ZAR9.5 billion (with the target being required to achieve at least ZAR280 million in assets or turnover). Mergers that fall below the intermediate merger thresholds are categorised as small mergers and may still be notifiable, but only in limited circum - stances. The merger filing fees have always been upwardly revised to ZAR220,000 for intermediate mergers and ZAR735,000 for large mergers. Public interest considerations are firmly embedded in merger analysis. The competition authorities assess the effect of transactions on a range of public interest factors, with conditions imposed more prominently in relation to employment, the promotion of historically disadvantaged persons (HDPs), and worker owner - ship, as well as the promotion of small and medium enterprises. B-BBEE and transformation B-BBEE is a defining feature of South Africa’s corpo - rate landscape, designed to redress the inequalities of the past by promoting the economic participation of black South Africans. The B-BBEE Act and sector Codes stipulate targets across certain principal elements such as ownership, management control, skills development, enterprise and supplier development, and socio-economic development. The more points a business achieves across these elements, the higher its B-BBEE status level, which translates into a procurement recognition level that determines its ability to contract with gov - ernment, state-owned enterprises and other meas - ured entities.
The formal introduction of the Transformation Fund framework, alongside ongoing debate regarding the future direction of empowerment policy, under - scores the importance of corporates doing business in South Africa proactively engaging with B-BBEE requirements, monitoring evolving sector codes and integrating transformation planning into their broader commercial and investment strategies. Exchange control and capital flow management South Africa’s exchange control regime, overseen by the South African Reserve Bank Financial Surveillance Department (FinSurv), should not be viewed as a bar - rier to investment. While cross-border transactions do require approval for capital movements, including share issuances, loans, guarantees, intellectual prop - erty transfers and repatriation of proceeds, this is a straightforward process that requires early planning rather than presenting a substantive obstacle, dem - onstrating the transaction is at fair value and on arm’s length terms. Authorised dealer approvals typically take days. For approvals that require elevation to the FinSurv, applications generally take four to six weeks. Proposed amendments to South Africa’s exchange control regime continue to relax certain requirements, while simultaneously streamlining enforcement mech - anisms and bringing crypto-assets more squarely within the regulatory perimeter. National Treasury has earlier this year published Draft Capital Flow Management (CFM) Regulations, which are intended to repeal and replace the current Exchange Control Regulations. The amendments con - templated in the draft CFM Regulations address gaps in the current South African exchange control regu - lations, including in relation to cross-border crypto asset transactions, which will complement the exist - ing regulation by the Financial Sector Conduct Author - ity and Financial Intelligence Centre. Financing Trends In addition to capital raises through the JSE, busi - nesses in South Africa access capital through multiple channels. Bank financing remains significant, though private credit is playing an increasingly prominent role in M&A financing, offering flexible and competitive structures. Private equity sponsors continue to deploy
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