New Communique On Mergers And Spin-Offs

The Communiqué on Mergers and Spin-offs¹ (the "Communique"), which entered into force on 28 December 2013, regulates the principles applicable to mergers and spin-offs of public companies. Compared to the previous communiqué², the Communiqué redefined the process applicable to merges and spin-offs and introduced new concepts such as exit right and expedited merger and spin-off. This bulletin will touch upon the main principles provided under the Communiqué for merger transactions involving public companies.

Under the Communiqué, a public company may merge with another public or private company by (i) incorporating a new company (merger by formation of a new company) or (ii) acquiring the public or private company (merger by acquisition) by obtaining the Capital Markets Board's (the "CMB") approval. In this regard, the Communiqué lists a number of documents for submitting the merger application to the CMB including the merging companies' financial statements and