CAYMAN ISLANDS Law and Practice Contributed by: Shari Seymour, Kerry Ann Phillips and Michael Lockwood, Maples Group
implemented by way of a scheme of arrange - ment in the Cayman Islands and is subject to the Hong Kong Takeovers Code. • Silver Pegasus Investment completed a take- private transaction by way of a scheme of arrangement of Hong Kong-listed SciClone Pharmaceuticals, valued at USD1.13 billion. • TDCX Inc., an award-winning digital customer experience (CX) solutions provider for tech - nology and blue-chip companies, completed a statutory merger with Transformative Invest - ments Pte Ltd, with a deal value of USD1 billion. • Beijing Capital City Development Group Co., Ltd completed a take-private transaction by way of a scheme of arrangement of Beijing Capital Grand Limited, with a deal value of USD82 million. 1.3 Key Industries In the past 12 months, M&A activity in the Cay - man Islands was largely concentrated in the legal and financial services industry on a cross- border basis. Financial services, technology, e-commerce, biotech, pharma and healthcare were the primary industries involved in M&A activity with Cayman Islands companies. 2. Overview of Regulatory Field 2.1 Acquiring a Company The primary legal structures for the acquisition of a Cayman Islands company are set out in the Companies Act (As Revised), which provides mechanisms for the acquisition of a company by: • a merger or consolidation under Part XVI of the Companies Act;
• mergers, amalgamations and reconstructions by way of scheme of arrangement under Sec - tion 86 or 87 of the Companies Act; and • a minority squeeze-out procedure under Sec - tion 88 of the Companies Act. The Limited Liability Companies Act (As Revised) (the “LLC Act” ) also provides for a similar frame - work for Cayman Islands LLCs. At present, there is no statutory mechanism by which a Cayman Islands ELP (which is frequently used as part of offshore holding structures) can merge with and/or into another entity. Where an ELP holds the target assets to be acquired in a statutory merger, “spin-out” or “spin-off” will often be implemented, whereby the general partner of the ELP will incorporate a company or LLC and contribute the assets to the subsidiary for the purposes of the merger. The Cayman Islands does not have a set of pre - scriptive legal principles that are specifically rel - evant to acquisition transactions; instead, broad common law and fiduciary principles apply. Statutory Merger The statutory merger under Part XVI of the Com - panies Act is the most common mechanism for the completion of an acquisition or business combination. Under the statutory merger regime, two or more companies (including at least one Cayman Islands company) may merge. Upon the completion of the merger, the rights, property, liabilities and other obligations of each of the companies immediately vest in the surviving company. In order to merge or consolidate, the directors of each constituent company must approve a written plan of merger or consolidation. Subject to the relevant constitutional documents of the
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