SOUTH AFRICA Law and Practice Contributed by: Michael Katz, Matthew Morrison, Madison Liebmann and Sinovuyo Damane, ENS
subject to the requirements of Sections 114 (scheme of arrangement) and 115 if it involved an acquisition by the company of more than 5% of the issued shares. However, the amended Section 48 (8)(b) no longer makes reference to Sections 114 and 115 and states that a special resolution will be required for share repurchases except for shares acquired as a result of a pro rata offer or pursuant to a transaction effected on a recognised stock exchange. Consequently, this amendment will have the effect of limiting the pro - cedural hurdles previously applicable to share repur - chases above the 5% threshold. An amendment to the Companies Act which is not yet in force and which is relevant to M&A activity is the amendment to Section 118 (1), which provides that the TRP has jurisdiction over private companies that have ten or more shareholders with direct or indirect shareholding in the company and that meet or exceed the applicable financial thresholds for annual turno - ver or asset value. These amendments are a depar - ture from the previous criterion, namely that the TRP had jurisdiction over private companies if there had been a transfer of more than 10% of shares, other than by transfer, between or among related or inter- related persons within the 24-month period prior to the affected transaction. Once implemented, these amendments will ease the unnecessary and expensive processes with which some private companies cur - rently have to comply. It will further allow for greater transparency of information relating to beneficial own - ers of companies. Other amendments not yet in force include granting the right to non-shareholders to have greater access to company records, the obligation on public and state-owned companies to present a remuneration policy and remuneration report, as well as further requirements relating to the appointment and com - position of a company’s social and ethics committee. Draft AML and Beneficial Ownership Amendments to the Companies Act On 13 December 2024, the National Treasury pub - lished further proposed amendments to the Com - panies Act in the draft General Laws (Anti-Money Laundering and Combating Terrorism Financing)
Amendment Bill, 2024. On 14 January 2026, the National Treasury published the draft General Laws (Anti-Money Laundering and Combating Terrorism Financing) Amendment Bill, 2025 which is a revised version of the 2024 Amendment Bill. If enacted into law, these amendments will empower the Compa - nies and Intellectual Property Commission (CIPC) to deregister a company that fails to submit a securities register or register of beneficial interests within a cer - tain period and to impose administrative penalties. The amendments will also empower the Companies Tribunal to review a decision of the CIPC to impose an administrative fine. Furthermore, if enacted, failure to comply with ben - eficial interest filing requirements may result in the defaulting company being de-registered and a fine not exceeding the greater of 10% of the company’s turno - ver for the period during which the company failed to comply with a compliance notice from the CIPC or ZAR10 million being imposed. The proposed changes were open for public comment until 13 February 2026. Proposed Section 18A to the Competition Act Once in force, the new Section 18A to the Competition Act (see 2.6 National Security Review ) will have a sig - nificant effect on acquisitions by foreign firms into SA. Section 12A of the Competition Act The Competition Amendment Act No 18 of 2018 has introduced some notable changes with respect to M&A deals in South Africa. An important change relates to Section 12A, which requires the Competi - tion Commission or Competition Tribunal to determine whether a merger can or cannot be justified on public interest grounds. The new amendments have ampli - fied or added further factors to be considered: • the ability of small and medium businesses, or firms controlled or owned by historically disadvan - taged persons, to effectively enter into, participate in or expand within the market; and • the promotion of a greater spread of ownership, in particular to increase the levels of ownership by historically disadvantaged persons and workers in firms in the market.
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