GHANA Law and Practice Contributed by: Victoria Bright and Justice Oteng, Addison Bright Sloane
5. Negotiation Phase 5.1 Requirement to Disclose a Deal
In the banking, insurance, and telecommunications sectors, the acquisition of a substantial shareholding is subject to prior regulatory approval from the Bank of Ghana, the National Insurance Commission, and the National Communications Authority. For public companies, the law imposes minimum dis - closure triggers. Substantial shareholdings of 10%, and each subsequent 5% change, must be reported within 48 hours. Listed companies must also comply with the Securities and Exchange Commission and Ghana Stock Exchange continuous disclosure rules. 4.4 Dealings in Derivatives Derivatives dealings are allowed within this jurisdic - tion. They are primarily conducted Over-the-Counter The Bank of Ghana has not issued any rules, direc - tives, or guidelines on derivative trading. However, the Securities and Exchange Commission has issued the Securities Industry (Over-the-Counter Market) Guide - lines, which require that any person transacting in the OTC market as a securities dealer must be licensed in accordance with the Securities Industry (Licensing) Guidelines. Under the OTC Rules, a company must be a public limited liability company incorporated under the laws of Ghana, or a public company admitted by the Ghana Stock Exchange, before its securities can be admitted to and traded on the OTC market. 4.6 Transparency In a public takeover, any person or entity intending to acquire 30% or more, up to 50% or more, of the voting shares or effective control of a public com - pany (Mandatory Offer) must publish its intention in a newspaper of general circulation. The offeror must also demonstrate that it has sufficient resources to carry out the offer. (OTC) by banks and financial firms. 4.5 Filing/Reporting Obligations Under the Companies Act, companies are required to disclose their beneficial owners to the ORC at the time of registration and when filing annual returns.
In M&A transactions involving private companies, the target company is not obliged to disclose the deal. Such transactions are typically governed by confiden - tiality and non-disclosure agreements, unless there is a mandatory sector-specific approval requirement that necessitates disclosure. In the case of public companies, the target company is required to disclose the transaction prior to signing the definitive agreement. The SEC Code on Takeovers and Mergers, which regulates transactions involving public companies, requires the purchaser to publish a mandatory offer stating its intention to acquire the target company once it has sufficient resources to do so. The pur - chaser must also submit a statement detailing the offer to the SEC and to the target company. Upon receipt of the purchaser’s statement, the target company is required to notify the relevant exchange authority, the Ghana Stock Exchange, the SEC, and to publicly announce the proposed takeover offer. 5.2 Market Practice on Timing Market practice on timing differs from strict legal requirements. The law provides for definite timelines for disclosure of transactions upon reaching a defined or substantial shareholding threshold. On the other hand, market practice requires that public announce - ment is delayed for as long as necessary to maintain confidentiality and protect the deal. 5.3 Scope of Due Diligence The scope of due diligence depends on the nature of the business. However, the core areas typically include legal, financial, tax, and commercial matters. Other key areas may also cover technology, anti-cor - ruption, employment, and environmental, social and governance (ESG) considerations. Legal due diligence involves reviewing the target com - pany’s legal structure and capacity, litigation history, employment-related matters, regulatory compliance, title to the assets being acquired, intellectual property
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