Mergers & Acquisitions of Private and Public Companies in Zimbabwe

The two principal enactments which regulate mergers and acquisitions in Zimbabwe are the Competition Act [Chapter 14:28] and the Companies and Other Business Entities Act [Chapter 24:31].

In Zimbabwe, a private company, public company or co-operative company may undertake and complete a merger at any time as provided by the Competition Act [Chapter 14:28] or a major asset transaction in terms of the Companies and Other Business Entities Act [Chapter 24:31].

In terms of section 228 of the Companies and Other Business Entities Act [Chapter 24:31] where two or more public companies, or any combination of companies consisting of at least one public company and at least one private company, such merging companies may undertake a merger in Zimbabwe subject to the following requirements:

1. (a) Enter into a provisional contract for merger compliant with section 229 of the Companies and Other Business Entities Act (‘Contents of contract of merger’);
2. (b) The merging companies publish a notice of the proposed merger in the Government Gazette and in a daily newspaper circulating in the district in which the registered office of the company is situated, making mention of the names of the merging companies;
3. (c) Give notice of the provisional contract of merger to the shareholders of each of the merging companies, which notice shall be compliant with the requirements for a special resolution and shall be accompanied by—
4. (i) A copy of the contract for merger together with an explanation which describes the legal and economic grounds for the merger;
5. (ii) Any recommendation of the board of directors on the proposed merger and the reasons for the recommendation;
6. (iii) A copy of an opinion of an independent financial adviser if such an opinion has been obtained or is required under section 230 of the Companies and Other Business Entities Act (‘Independent financial opinion’);
7. (iv) The annual financial statements of all the companies which are parties to the merger for the previous three years (or any shorter time of the company’s existence).