Bolstering creditor and shareholder protection under the South African and Zimbabwean amalgamation or merger regulatory regimes: Suggestions for company-law reform

Abstract

This article critically assesses the efficacy of the South African and Zimbabwean merger regulatory regimes in providing suitable shareholder and creditor protection. The article seeks to balance competing goals. On the one hand, merger opportunities should be promoted by reducing regulatory barriers to merger regulation by, for instance, facilitating the implementation of mergers through a less complex procedure and with reduced court interference. On the other hand, the merger regimes ought to guarantee the appropriate and adequate protection of creditors and shareholders, including minority shareholders’ interests. The article focuses on the two comprehensive target shareholder protections — participatory and remedial rights — and two creditor remedies — the creditors’ notice and the solvency and liquidity test. The study establishes that South Africa offers better protection to creditors and shareholders than Zimbabwe. However, in some respects, both jurisdictions can seek lessons from other progressive jurisdictions, including the United States of America, with the state of Delaware as a particular example, and the United Kingdom.