| (1A) | This section does not apply to an amalgamation or merger to which section 166S of the Financial Sector Regulation Act, 2017 (Act No. 9 of 2017), applies. |
[Section 113(1A) inserted by section 29 of the Financial Sector Laws Amendment Act, 2021 (Act No. 23 of 2021), Notice No. 789, GG45825, dated 28 January 2022- effective 1 June 2023 per (b)(i) of Commencement Notice No. 3202, GG48294, dated 24 March 2023]
| (2) | Two or more companies proposing to amalgamate or merge must enter into a written agreement setting out the terms and means of effecting the amalgamation or merger and, in particular, setting out— |
| (a) | the proposed Memorandum of Incorporation of any new company to be formed by the amalgamation or merger; |
| (b) | the name and identity number of each proposed director of any proposed amalgamated or merged company; |
| (d) | if any securities of any of the amalgamating or merging companies are not to be converted into securities of any proposed amalgamated or merged company, the consideration that the holders of those securities are to receive in addition to or instead of securities of any proposed amalgamated or merged company; |
| (e) | the manner of payment of any consideration instead of the issue of fractional securities of an amalgamated or merged company or of any other juristic person the securities of which are to be received in the amalgamation or merger; |
| (f) | details of the proposed allocation of the assets and liabilities of the amalgamating or merging companies among the companies that will be formed or continue to exist when the amalgamation or merger agreement has been implemented; |
| (g) | details of any arrangement or strategy necessary to complete the amalgamation or merger, and to provide for the subsequent management and operation of the proposed amalgamated or merged company or companies; and |
| (h) | the estimated cost of the proposed amalgamation or merger. |
| (3) | If the securities of one of the amalgamating or merging companies are held by or on behalf of another of the amalgamating or merging companies, the agreement required by subsection (2) must provide for the cancellation of those securities when the amalgamation or merger becomes effective, without any repayment of capital in respect thereof, and no provision may be made in the agreement for the conversion of those securities into securities of an amalgamated or merged company. |
| (4) | Subject to subsection (6), the board of each amalgamating or merging company— |
| (a) | must consider whether, upon implementation of the agreement, each proposed amalgamated or merged company will satisfy the solvency and liquidity test; and |
| (b) | if the board reasonably believes that each proposed amalgamated or merged company will satisfy the solvency and liquidity test, it may submit the agreement for consideration at a shareholders meeting of that amalgamating or merging company, in accordance with section 115. |
| (5) | Subject to subsection (6), a notice of a shareholders meeting contemplated in subsection (4)(b) must be delivered to each shareholder of each respective amalgamating or merging company, and must include or be accompanied by a copy or summary of— |
| (a) | the amalgamation or merger agreement; and |
| (b) | the provisions of sections 115 and 164 in a manner that satisfies prescribed standards. |
| (6) | The requirements of subsections (4) and (5) do not apply to a company engaged in business rescue proceedings, in respect of any transaction that is pursuant to or contemplated in the company’s business rescue plan that has been adopted in accordance with Chapter 6. |
