Mergers & Acquisitions Comparative Guide

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1 Deal structure

1.1 How are private and public M&A transactions typically structured in your jurisdiction?

Private M&A transactions are typically entered into by way of a sale and purchase agreement between a buyer and a seller for the sale and purchase of:

• shares in a private company; or
• assets and/or undertakings belonging to the seller.

Public M&A transactions (ie, transactions involving the acquisition of shares in a public corporation in Singapore) can be entered into in a similar manner to private M&A transactions if they are below thresholds regulated under the Singapore Code on Takeovers and Mergers. However, if takeover rules under the code are triggered, the structure could take one of several forms, including a general offer or a scheme of arrangement under Section 210 of the Companies Act 1967.

Notably, the code applies to:

• publicly traded corporations, registered business trusts (BTs) and real estate investment trusts (REITs) with a primary listing in Singapore; and
• public unlisted companies and unlisted registered BTs with:
• • more than 50 shareholders or unitholders; and
  • net tangible assets of S$5 million or more.

Broadly speaking, the Companies Act applies to Singapore-incorporated companies and the listing rules of the Singapore Exchange (SGX) apply to corporations (wherever incorporated), BTs and REITs, which are listed on the SGX.

For ease of reference in this Q&A, references to shares and shareholders should be read as including references to units and unitholders in a BT or REIT where applicable.

1.2 What are the key differences and potential advantages and disadvantages of the various structures?

For private M&A transactions undertaken by way of a share sale, the key advantage is the ease of execution, as it only involves the transfer of shares in the target. A private M&A transaction involving the sale and purchase of assets, on the other hand, will involve the transfer of each and every asset and the assumption of relevant liabilities comprising the sale. The key disadvantage of the former is the inability of the buyer to cherry-pick the assets it wishes to acquire (the buyer will also inherit all liabilities of the target); whereas in an asset transaction, the buyer is allowed to select the assets it wishes to acquire and to carve out the liabilities it wishes to leave behind.

Key differences between the different public M&A structures mainly relate to:

• timing;
• control of the process;
• whether a shareholders' meeting and resolution will be required and what approval thresholds must be met; and
• regulatory requirements (eg, relating to price and the opinion of an independent financial adviser).

General offers and schemes of arrangement are common structures for public M&A transactions. In a general offer (which may take the form of a voluntary general offer, a mandatory general offer or a partial offer), accepting shareholders will tender their shares in acceptance of the offer in return for consideration paid and/or satisfied by the offeror. A voluntary general offer must be conditional on an offeror receiving acceptances that will result in the offeror and its concert parties holding more than 50% of the voting rights of the target. The offeror may, subject to the approval of the Securities Industry Council (the body which administers and enforces the Singapore Code on Takeovers and Mergers), stipulate a higher acceptance condition if it intends for its offer to be contingent upon it being able to trigger compulsory acquisition rights under the Companies Act to acquire 100% of the voting rights of the target.

In a scheme of arrangement, the target proposes a scheme to its shareholders for shares to be transferred to the offeror in return for consideration to be paid and/or satisfied by the offeror. A scheme of arrangement:

• must pass a high bar of approval of a majority in number representing at least three-quarters in value of the members or class of members (excluding the offeror and its concert parties) present and voting (in person or by proxy) at the scheme meeting; and
• requires court approval also.

The outcome of a scheme is binary (ie, all or nothing).

1.3 What factors commonly influence the choice of sale process/transaction structure?

The choice of an asset or share transaction will be driven by a variety of commercial and legal considerations. Key factors may include:

• the buyer's commercial objectives;
• ease of transfer and transaction complexity;
• due diligence findings, such as the liabilities of the target;
• stamp duty implications and tax considerations; and
• the impact on employees.

For instance, a share sale transaction may be preferred as it is generally more straightforward and allows the buyer to acquire all assets and liabilities of the target wholesale. However, if the purchaser only intends to acquire a specific asset or business line carried out by the target, an asset purchase transaction will be preferred, as it allows the buyer to cherry-pick the assets (and liabilities, if any) that it wishes to acquire.

As for the choice of public M&A structure where the Singapore Code on Takeovers and Mergers is triggered, please see question 1.2. More information can also be found in question 6.

2 Initial steps

2.1 What documents are typically entered into during the initial preparatory stage of an M&A transaction?

The typical preliminary document in M&A transactions is a non-disclosure agreement which aims, among other things, to protect the confidentiality of preliminary discussions and the disclosure of confidential information exchanged. In some cases, a non-binding letter of intent or memorandum of understanding to demonstrate interest and/or a term sheet (binding or non-binding) to lock down initial in-principle agreed terms (subject to definitive documentation) may also be entered into.

Parties may also enter into an exclusivity agreement or 'no shop, no talk' agreement, which is a type of deal protection mechanism that prohibits the seller from negotiating with, or soliciting bids from, other prospective buyers. Such arrangements provide the prospective buyer with an exclusive time period to conduct due diligence and engage in negotiations with the seller without competition from other prospective buyers.

For public M&A transactions where the Singapore Code on Takeovers and Mergers is triggered, the board of directors of the target should be mindful that any entry into an exclusivity agreement by the target should not limit or compromise the target board's fiduciary duties to:

• act in good faith; and
• act in the best interests of the target and its obligations under the code, not take any action that may have the result of frustrating an offer.

2.2 Are break fees permitted in your jurisdiction (by a buyer and/or the target)? If so, under what conditions will they generally be payable? What restrictions and other considerations should be addressed in formulating break fees?

Parties in transactions that are not regulated under the Singapore Code on Takeovers and Mergers are free to contract as they choose, save that parties should bear in mind that the imposition of a break fee may constitute a penalty clause which is unenforceable under Singapore law if the break fee does not represent a genuine pre-estimate of loss suffered by the non-defaulting party.

For break fees in public M&A transactions regulated under the code, the Securities Industry Council must be consulted at the earliest opportunity. The code provides that certain conditions must be met:

• the break fee must be minimal (normally no more than 1% of the value of the target calculated by reference to the offer price); and
• the target board and its financial adviser must provide certain information and confirmations in writing to the council – including:
• • that the break fee arrangements were agreed as a result of normal commercial negotiations and all arrangements have been fully disclosed;
  • that they believe the fee to be in the best interests of target shareholders; and
  • any relevant information concerning possible competing offerors.

2.3 What are the most commonly used methods of financing transactions in your jurisdiction (debt/equity)?

There is no one favoured method – the choice will depend on many factors, including:

• the size and structure of the transaction;
• the type of buyer;
• its financial muscle and availability of ready funds;
• tax considerations; and
• the costs of capital and financing.

In addition, for public M&A transactions regulated by the Singapore Code on Takeovers and Mergers, another relevant factor will be the confirmation of resources – see question 6.4.

2.4 Which advisers and stakeholders should be involved in the initial preparatory stage of a transaction?

A buyer will typically engage legal, financial and tax advisers in the initial preparatory stage of a transaction structure. Legal advisers will typically be involved early on in the transaction to advise, among other things, on structuring, timing and process. These can be external legal advisers or in-house legal teams of the relevant party, as the party deems appropriate given:

• its size and resources;
• its strategic intent;
• the materiality of the proposed transaction to it;
• its internal organisational structure; and
• its risk appetite and tolerance.

Similar considerations will come into play as to when and whether the buyer should appoint an external financial or tax adviser or whether its in-house teams will suffice.

As to whether senior management, a management committee, a board committee and/or the board of the relevant party should be involved and be required to authorise the potential transaction or any step thereof at each preliminary stage, this will depend on the constitution, internal bylaws, policies and procedures and the committee and board terms of reference of the relevant party.

Where obtaining warranty and indemnity (W&I) insurance is critical for the transaction, appointing a W&I insurance broker at an early stage may also be important.

2.5 Can the target in a private M&A transaction pay adviser costs or is this limited by rules against financial assistance or similar?

Financial assistance rules which are found in the Companies Act apply only to a public company or a company whose holding company or ultimate holding company is a public company. If the target in a M&A transaction is neither of these, subject to fiduciary duty considerations of the directors of the target, it will not be restricted by financial assistance rules from paying the adviser costs of the buyer. However, where financial assistance rules apply, such costs may be borne by the target if one of the exemptions to the financial assistance rules under the Companies Act, such as the whitewashing condition, is met.

3 Due diligence

3.1 Are there any jurisdiction-specific points relating to the following aspects of the target that a buyer should consider when conducting due diligence on the target? (a) Commercial/corporate, (b) Financial, (c) Litigation, (d) Tax, (e) Employment, (f) Intellectual property and IT, (g) Data protection, (h) Cybersecurity and (i) Real estate.

The following are some Singapore-specific points to note:

• The electronic register of members (EROM) of a Singapore-incorporated company maintained with the Accounting and Corporate Regulatory Authority of Singapore (ACRA) is prima facie evidence of a shareholders' title to shares. As such, one can ascertain the identities of shareholders and confirm their title to shares based on the EROM without having to conduct a title tracing exercise based on historical corporate approvals of such companies.
• In respect of employment, all foreign employees must hold valid work passes (the type of which depends on, among other things, the income level and role of the relevant employee) issued by the Ministry of Manpower in order to work in Singapore. Separately, the Employment Act 1968 provides, among other things, that when an undertaking or business (or part thereof) is transferred, employees of such undertaking or business (or part thereof) and their employment contracts will be automatically transferred to the transferee and their period of service preserved.
• The legislation governing the collection, use and disclosure of personal data in Singapore is the Personal Data Protection Act 2012 (PDPA). As part of data protection due diligence, a review of the policies that the target group companies have in place for compliance with the PDPA and the guidelines issued by the Personal Data Protection Commission of Singapore can be conducted.
• Singapore-specific public searches that can be conducted as part of due diligence are set out in question 3.2.

3.2 What public searches are commonly conducted as part of due diligence in your jurisdiction?

Public searches conducted in respect of target group companies incorporated in Singapore will typically include the following:

• business profile and EROM searches at ACRA;
• land title and lot base searches on Singapore real estate at the Singapore Land Authority or via its online Integrated Land Information Service portal. In some instances, legal requisitions in respect of the land lots on which the Singapore real estate is comprised may also be conducted;
• cause book searches via the Integrated Electronic Litigation System of the Singapore Judiciary for litigation, enforcement and insolvency actions; and
• proprietor searches to identify registrable intellectual property (ie, trademarks, patents and registered designs) that are applied for or registered with the Intellectual Property Office of Singapore.

3.3 Is pre-sale vendor legal due diligence common in your jurisdiction? If so, do the relevant forms typically give reliance and with what liability cap?

Pre-sale vendor legal due diligence is relatively common in auction processes (ie, where there are multiple bidders) in Singapore. In such cases, in addition to the party that engages the adviser to conduct vendor legal due diligence (generally either the vendor or the target), the ultimate buyer would also occasionally request for reliance on the vendor legal due diligence report. Where reliance is granted, liability of the advisers is usually capped at a negotiated amount.

4 Regulatory framework

4.1 What kinds of (sector-specific and non-sector specific) regulatory approvals must be obtained before a transaction can close in your jurisdiction?

Attention should always be given to whether there are sectoral or industry-specific regulatory approvals or oversight that could be relevant to the M&A transaction in question. Some regulatory approvals that may be required in the Singapore context are as follows:

• under the Significant Investments Review Act 2024 (SIRA), certain entities that are designated as critical to safeguard Singapore's national security interests must seek approval from the authorities for:
• • direct and indirect ownership or control changes; and
  • appointments of key personnel (eg, board directors and chief executive officer).
• the Monetary Authority of Singapore (MAS) regulates financial institutions in the banking, capital markets, insurance and payment sectors. Approval from the MAS may be required in the case of transactions involving the transfer of stakes in such financial institutions (including, on a non-exhaustive basis, banks, finance companies, insurance companies and brokers, financial advisers, fund managers and payment service providers).
• the Competition Act 2004 (Competition Act) prohibits mergers that are expected to result in a substantial lessening of competition within any market in Singapore for goods or services. While notification to the Competition and Consumer Commission of Singapore (CCCS) is not mandatory, parties should conduct a self-assessment and, if they consider that the merger may infringe the Competition Act, they should notify the CCCS, which will then make an assessment.

4.2 Which bodies are responsible for supervising M&A activity in your jurisdiction? What powers do they have?

Apart from the Office of Significant Investments Review, which is responsible for administering SIRA, and the CCCS, which administers and enforces the Competition Act, as mentioned in question 4.1, the Securities Industry Council sits under the MAS and administers and enforces the Singapore Code on Takeovers and Mergers (which is relevant in the case of a public M&A transaction). For transactions involving public companies listed on the Singapore Exchange (SGX), the SGX will also have oversight on whether its listing rules are complied with by the parties involved.

4.3 What transfer taxes apply and who typically bears them?

Stamp duty applies to transfers of shares or real estate.

For transfers of shares, the default position at law – which can be varied by contract – is for the buyer to bear the stamp duty. That said, it is also the case in practice that stamp duty on a transfer of shares is typically borne by buyer. However, no stamp duty is payable on the transfer of scripless shares of a public listed company.

For transfers of real estate, the position at law – which can similarly be varied by contract but is aligned with what is typical in practice – is that, depending on the stamp duty payable (buyer's stamp duty or seller's stamp duty), the buyer or the seller will bear the stamp duty accordingly.

Notably, apart from the usual stamp duty on a share transfer, if the target is a 'property-holding entity' as defined in the Stamp Duties Act 1929 (Stamp Duties Act) (in essence, an entity whose assets comprise primarily residential properties in Singapore), additional conveyance duties may be levied on both buyer and seller, depending on each of their equity interests or voting power in the target prior to and after the transaction (in particular, whether such equity interests or voting power exceed 50%), in accordance with the provisions of the Stamp Duties Act. Apart from the usual stamp duty, if the target qualifies as a property-holding entity, the additional conveyance duties could potentially add a material cost to the transaction.

5 Treatment of seller liability

5.1 What are customary representations and warranties? What are the consequences of breaching them?

Though ultimately a matter of negotiation and the relative bargaining positions of the parties, typical representations and warranties in a sale and purchase agreement (SPA) for a private M&A transaction in Singapore tend to be comprehensive and cover a wide range of issues. These generally include representations and warranties on:

• capacity and authority;
• title to shares and encumbrances;
• accounts and financial statements;
• absence of undisclosed liabilities;
• material contracts;
• compliance with laws;
• licences;
• litigation;
• employment and benefits;
• real property/leases;
• intellectual property/information technology/data protection;
• environmental;
• anti-bribery/sanctions/export controls;
• tax (often coupled with a separate tax covenant/deed);
• insurance; and
• insolvency.

In comparison, the representations and warranties in an SPA for a public M&A transaction will be relatively pared down and may be limited to those for capacity, title and authority. The representations and warranties are typically more limited given that the target is a publicly listed entity and the expectation is that the acquirer should take the target as it is. There are also constraints imposed by the Singapore Code on Takeovers and Mergers, which require equal treatment of all shareholders.

Parties may agree that warranty and indemnity (W&I) insurance is the sole recourse for breaches. Outside W&I insurance, the consequences of breach will be a matter for parties to negotiate and agree and will typically involve the payment of damages. The parties can also agree that a material breach of representations and warranties may, if unremedied, allow the party not in breach to refuse to complete and terminate the agreement. There may also be indemnities or price adjustments for particular breaches. For public M&A transactions, recourse against selling shareholders for a breach is likely to be limited or entirely unavailable (particularly in a scheme of arrangement, as the key implementation agreement is executed with the target and not the selling shareholders).

5.2 Limitations to liabilities under transaction documents (including for representations, warranties and specific indemnities) which typically apply to M&A transactions in your jurisdiction?

Although ultimately a matter of negotiation and the relative bargaining positions of the parties, general limitations of liability for breach of warranties could typically include:

• a de minimis to be met before a claim or claims can be made;
• a de maximis on individual claims and the aggregate claim amount (which will often be equivalent to the consideration amount or a percentage thereof);
• a time limitation on when claims can be made; and
• compliance with provisions specifying the process for claim submission.

The limitations will differ depending on whether the representations and warranties are fundamental (ie, relating to title and capacity), in which case the limitations are typically longer in duration and have higher quantum caps. Also, limitations will additionally typically provide for exclusions such as providing for:

• no double recovery;
• exclusion of consequential or indirect loss; and
• exclusion for losses which are covered by insurance or which can be otherwise recovered.

Specific indemnities may or may not be subject to the aforementioned or other specific limitations, depending on their context and purpose and subject to the parties' agreement.

5.3 What are the trends observed in respect of buyers seeking to obtain warranty and indemnity insurance in your jurisdiction?

W&I insurance has made increasing inroads in Singapore in recent years. We have seen significant uptake, especially in private equity exits and competitive auctions scenarios. Consequently, premiums in recent times have moderated and are more competitive, particularly with more insurers entering into the market. Its growth seems likely to influence a broader standardisation of warranties and indemnities and related terms in SPAs in Singapore over time.

5.4 What is the usual approach taken in your jurisdiction to ensure that a seller has sufficient substance to meet any claims by a buyer?

There is no common approach, as it very much depends on negotiations and the relative bargaining positions of the parties. Options include:

• seller-procured W&I insurance;
• a parent company guarantee; or
• other security for buyer performance, such as:
• • a bank guarantee or performance bond;
  • partial holdback of consideration for a period post-completion; or
  • an escrow arrangement whereby all or a portion of the consideration is held in escrow for a period post-completion.

5.5 Do sellers in your jurisdiction often give restrictive covenants in sale and purchase agreements? What timeframes are generally thought to be enforceable?

Restrictive covenants or restraints of trade (eg, non-compete or non-solicitation clauses) typically tend to be given when relevant in the particular context and not otherwise as a general default position. The context could be when, for example:

• the seller is the founder and intends to continue to work or invest in a similar business or activity; or
• the price includes a consideration for the seller to restrict from undertaking certain activities for a period of time.

The general rule is that such restraints are generally legally unenforceable except when they protect a legitimate business interest and are reasonable (in scope, duration and geography) for the protection of such interest. It is not possible to generalise what would constitute an enforceable timeframe, as this is very much fact based, except to say that:

• the shorter and more limited in scope, the more likely to be enforceable; and
• restraints in employment contracts are, generally speaking, probably less likely to be enforceable than restraints in SPAs:
• • with commercial parties of roughly equivalent bargaining positions; and/or
  • where the seller has received valuable consideration for the overall transaction.

5.6 Where there is a gap between signing and closing, is it common to have conditions to closing, such as no material adverse change (MAC) and bring-down of warranties?

Yes, this is quite typical; although at the end of the day, it will be a matter of negotiation. Other typical conditions to closing also include obtaining:

• regulatory approvals;
• third-party consents; and
• shareholder approvals.

MAC clauses should be carefully drafted because if such clauses are drafted too broadly, these could give rise to disputes over whether such clauses are triggered. A good practice is to stipulate specific financial thresholds which amount to a MAC.

6 Deal process in a public M&A transaction

6.1 What is the typical timetable for an offer? What are the key milestones in this timetable?

As mentioned in question 1.1, a public M&A transaction can be structured in several ways, including a general offer. In this response, we only address the timetable and milestones of a general offer.

The general offer process can take anywhere between seven and 15 weeks. This excludes the squeeze-out process (see question 6.3), which takes an additional six to eight weeks.

The milestones of a general offer will depend on whether it is a mandatory, partial or voluntary general offer.

A mandatory general offer (MGO) is triggered by:

• an acquisition of shares which, together with shares already held by the offeror and its concert parties, carry 30% or more of the voting rights of the target; or
• where the offeror and its concert parties already hold 30% to 50% of the voting rights of the target, an acquisition of additional shares by them in any period of six months carrying more than 1% of the voting rights of the target.

In an MGO, the sole condition that the offeror can impose is a minimum 50% acceptance level.

A voluntary general offer (VGO) applies when the offeror has not incurred an obligation to make an MGO. Unless already fulfilled at the outset, it must include a condition of a minimum 50% acceptance level and can include other objective conditions.

A partial offer can only be undertaken with the Securities Industry Council's consent. If the partial offer does not result in the offeror and its concert parties crossing the 30% MGO threshold, the council will normally consent. No consent will be given for a partial offer which could result in them holding between 30% and 50% of the target's voting rights. If the partial offer results in the offeror and its concert parties holding more than 50% of the target's voting rights, the council will not normally consent, unless (among other conditions):

• the partial offer is not an MGO; and
• the offeror and its concert parties undertake that they did not and will not acquire any voting shares in the target:
• • in the six months before the offer announcement;
  • throughout the offer period; and
  • during the six months after the close of the partial offer.

A partial offer is conditional on:

• a specified number or percentage of acceptances being received; and
• where the offeror and its concert parties hold 50% or less of the voting rights before the offer announcement or, if they exceed 50% of the voting rights, where the partial offer could result in them holding more than 90% of the voting rights or the target losing its minimum free float, approval of the target in general meeting on a poll, with the offeror and its concert parties abstaining.

Notably, no other general offer scenario requires a resolution of the target shareholders.

6.2 Can a buyer build up a stake in the target before and/or during the transaction process? What disclosure obligations apply in this regard?

A buyer/offeror is generally free to build up a stake in the target before an offer. However, as mentioned in question 6.1, if an offeror along with its concert parties either acquires 30% or more of the voting rights of the target or, where the offeror and its concert parties already hold 30% to 50% of the voting rights of the target, in any six-month period acquires more than 1% of the voting rights of the target, then the offeror is obliged to make an MGO for all of the remaining shares of the target not held by the offeror and its concert parties. Also pertinently, any acquisitions before and during the offer period could impact the minimum price of the offer. Specifically, the Singapore Code on Takeovers and Mergers provides that purchases by the offeror and its concert parties during the offer period and the preceding six months in the case of an MGO and three months in the case of a VGO set a floor price for the offer. Please see question 6.7 for more details.

Apart from the Singapore Code on Takeovers and Mergers requirements, the Securities and Futures Act 2001 contains ongoing disclosure of interest obligations imposed on directors, chief executive officers and substantial shareholders (ie, in summary, those with an interest in 5% or more voting shares) of Singapore Exchange (SGX) listed corporations, as well as the trustee manager of a registered business trust and the responsible person of a real estate investment trust, which continue to have to be complied with throughout the transaction process.

6.3 Are there provisions for the squeeze-out of any remaining minority shareholders (and the ability for minority shareholders to 'sell out')? What kind of minority shareholders rights are typical in your jurisdiction?

Yes, there are provisions that allow for the compulsory acquisition of the rest of the target's shares by exercising a right of squeeze-out if the conditions under Section 215 of the Companies Act are met. Specifically, if within four months of making a takeover offer the offeror obtains acceptances of at least 90% in value of the shares subject to the offer (excluding shares held by the offeror, its related corporations, their respective nominees and certain other related persons at the date of the offer), the offeror may, within two months of that four-month period, compulsorily acquire the remaining shares at the offer price, subject to statutory procedures and limited court challenge rights. The right of squeeze-out under Section 215 of the Companies Act is typically exercised following a general offer or delisting proposal (see question 6.5 for more information).

Minority shareholders in Singapore are protected by various provisions in the Companies Act.

Key rights include the following:

• Right to call meetings: Shareholders holding at least 10% of the total voting rights may call for an extraordinary general meeting.
• Right to circulate resolutions: Shareholders with at least 5% of the total voting rights can require the company to circulate a resolution for discussion at a general meeting.
• Right to inspect company registers and records: Shareholders have the right to inspect registers of members and directors and other statutory records.
• Right to dividends: If dividends are declared, all shareholders are entitled to receive them in proportion to their shareholding.
• Right to vote: All shareholders have the right to vote at general meetings.

Further, the Companies Act provides for shareholders to have the following rights:

• Right to commence a statutory derivative action: This allows a minority shareholder to bring an action on behalf of the company if the company itself fails to do so.
• Right to obtain remedy for minority oppression: If a shareholder's interests are being oppressed, prejudiced or disregarded by the company's affairs or by those in control, the shareholder can apply to the court for relief. The court has wide powers, including the power to order:
• • the company to be wound up; or
  • the purchase of the minority's shares at a fair value.

6.4 How does a bidder demonstrate that it has committed financing for the transaction?

Under the Singapore Code on Takeovers and Mergers, where the offer is for cash or includes an element of cash:

• the financial adviser or other appropriate third party (eg, the offeror's banker) must confirm that the offeror has sufficient resources available to satisfy full acceptance of the offer; and
• the Securities Industry Council may require evidence to support the confirmation.

6.5 What threshold/level of acceptances is required to delist a company?

A delisting proposal is regulated under Chapter 13 of the Mainboard or Catalist listing rules. It requires an application to the SGX, which may agree to the delisting if:

• the target obtains shareholders' approval at a general meeting of the target; and
• the resolution to delist has been approved by a majority of at least 75% of issued shares (excluding treasury shares and subsidiary holdings) held by the shareholders present and voting, on a poll, at the general meeting.

The offeror concert party group must abstain from voting on the resolution. An exit offer:

• must be made to the target's shareholders which is fair and reasonable; and
• must include a cash alternative as a default.

The target must also appoint an independent financial adviser, who must opine that the offer is fair and reasonable.

An offeror seeking to privatise a company may also elect to utilise other mechanisms, such as a general offer, as elaborated in question 6.1. Where an offeror has made a general offer with the intention to privatise a company, unless it is exercising its right of compulsory acquisition under Section 215 of the Companies Act, the SGX will require that the voluntary delisting requirements described in the preceding paragraph be adhered to before it will allow the issuer to be delisted.

A target listed on the Mainboard or Catalist is required under the SGX listing rules to ensure that at least 10% of its issued shares, excluding treasury shares (excluding preference shares and convertible equity securities), in a class that is listed is at all times held by the public (as defined in the rules). As such, if a target has lost the requisite public float pursuant to a general offer, it may be required by the SGX to restore the public float unless it can obtain 75% of the approval of the shareholders (excluding the offeror concert party group) for a delisting.

6.6 Is 'bumpitrage' a common feature in public takeovers in your jurisdiction?

'Bumpitrage' in Singapore is not as prevalent as in other jurisdictions, such as the United States or the United Kingdom. Shareholder activism to push target boards to explore other offers or ways to realise more value has typically come from existing strategic shareholders of the target.

6.7 Is there any minimum level of consideration that a buyer must pay on a takeover bid (eg, by reference to shares acquired in the market or to a volume-weighted average over a period of time)?

In an MGO, the price must:

• be in cash or accompanied by a cash alternative; and
• be equivalent to the highest price paid by the offeror and its concert parties during the offer period and in the past six months.

In a VGO, the price must be in cash and/or securities at not less than highest price paid by the offeror and its concert parties during the offer period and in the past three months; however, the Securities Industry Council can require an offer in cash or accompanied by a cash alternative if:

• the offeror and its concert parties had acquired shares in the class under offer carrying at least 10% of the voting rights of the target in cash during the offer period or over the past six months; or
• other circumstances render a cash offer necessary in the Securities Industry Council's view.

The consideration in a partial offer must be in cash and/or securities.

6.8 In public takeovers, to what extent are bidders permitted to invoke MAC conditions (whether target or market-related)?

Generally speaking, a MAC clause can only be included if it is sufficiently objective and reasonable.

The Singapore Code on Takeovers and Mergers specifies that a sale and purchase agreement sale and purchase agreement which, on fulfilment of the conditions precedent, would trigger an MGO, and a preconditional VGO where the announcement of a firm intention to make an offer is subject to the fulfilment of certain preconditions, must specify preconditions which are objective and reasonable. The code also states, among other things, that for VGOs:

• the Securities Industry Council will normally wish to be satisfied that fulfilment of the conditions does not depend to an unacceptable degree on the subjective judgement of the offeror, as such conditions can create uncertainty; and
• an offeror should not invoke any condition which causes the offer to lapse unless the circumstances which give rise to the right to invoke the condition are of material significance to the offeror in the context of the offer.

Furthermore, the withdrawal of a general offer by an offeror which has announced a firm intention to make an offer is subject to the council's consent, unless:

• posting of the offer was expressed as being subject to the prior fulfilment of a specific condition; and
• that condition has not been met.

6.9 Are shareholder irrevocable undertakings (to accept the takeover offer) customary in your jurisdiction?

Yes, they are customary and are often used as a means to avail an offeror of the right of squeeze-out under Section 215 of the Companies Act. Commonly, the irrevocable undertaking is given by a shareholder to:

• accept a general offer if subsequently made by the offeror; or
• vote in favour of a scheme proposed by the target.

Depending on the circumstances, irrevocable undertakings can take the form of either:

• a hard undertaking, which is binding regardless of there being higher competing offers; or
• a soft undertaking, which is subject to superior offers or other offers which are more in the interest of shareholders as a whole (ie, what is typically known as a fiduciary out).

Where a subsequent offer is made in respect of the target:

• the terms of any irrevocable undertakings with any shareholder must be disclosed; and
• no collateral benefits should have been offered to induce that shareholder to provide that undertaking, as that would contravene the Singapore Code on Takeovers and Mergers' equal treatment and 'no special deals' principles.

7 Hostile bids

7.1 Are hostile bids permitted in your jurisdiction in public M&A transactions? If so, how are they typically implemented?

Hostile bids are permitted in Singapore, though they are relatively uncommon. There are no substantive differences in the manner in which hostile bids and recommended bids are implemented.

For hostile bids implemented by way of an offer, the offeror announces a firm intention to make an offer for the target's shares. Under the Singapore Code on Takeovers and Mergers, the announcement must include the offer terms and any arrangements concerning the target's securities that may be material. Following the issue of the offer announcement, the offeror must issue a formal offer document containing the terms of the offer. Thereafter, the target will issue an offeree circular, containing among other things, the advice of the independent financial adviser and the recommendation of the target directors who are considered independent for the offer ('independent directors') on the offer. If the conditions for the offer are satisfied, the offeror must purchase all shares tendered in acceptance of the offer.

Hostile bids implemented by way of a scheme are unheard of as the offeror and target will still have to execute an implementation agreement under which the target undertakes to implement the scheme. The target will then issue a scheme document to its shareholders, setting out:

• the terms of the scheme;
• the independent financial adviser's advice; and
• the independent directors' recommendation on the scheme.

The target then applies to court to convene a shareholders' meeting to vote on the scheme. If approved by the shareholders, the target will apply to the court to sanction the scheme. Once sanctioned, the court order approving the scheme must be lodged with the Accounting and Corporate Regulatory Authority. The scheme becomes effective upon lodgement, where all shareholders will be bound by the terms of the scheme.

7.2 Must hostile bids be publicised?

Under the Singapore Code on Takeovers and Mergers, all takeover bids (including hostile bids) are subject to disclosure and announcement obligations. An offeror that has a firm intention to make an offer for the shares in a public company (regardless of whether the bid is hostile) must make a public announcement.

The Singapore Code on Takeovers and Mergers provides as a general principle that shareholders should be given sufficient information, advice and time to enable them to reach an informed decision on an offer. No relevant information should be withheld from them. Please refer to question 7.1 for further information on the manner in which hostile bids are implemented (including the information that must be included in the offer announcement, as prescribed under the Singapore Code on Takeovers and Mergers).

7.3 What defences are available to a target board against a hostile bid?

There are limits to what a target board can do in the face of a hostile bid, as directors of a Singapore-incorporated target have a fiduciary duty to act in the best interests of the target (and not a specific group of shareholders). Rule 5 of the Singapore Code on Takeovers and Mergers also provides that if a target board has reason to believe that a bona fide takeover offer is imminent, it must not take any action (except pursuant to a contract entered into earlier), without the approval of the shareholders of the target at a general meeting, on the affairs of the target that could effectively result in:

• any bona fide offer being frustrated; or
• the shareholders being denied an opportunity to decide on its merits.

Such actions include, among other things:

• issuing new shares or options; and
• disposing of assets of a material amount.

However, in the face of an offer, a target board may consider soliciting a competing offer or simply advising shareholders of the target to reject the hostile offer. Such actions will not be regarded as frustrating actions as the Securities Industry Council has clarified that a better offer or an alternative offer is generally in the interest of the shareholders of the target. Such actions neither hinder the progress of, nor result in shareholders being deprived of the opportunity to decide on the merits of, the first offer.

8 Trends and predictions

8.1 How would you describe the current M&A landscape and prevailing trends in your jurisdiction? What significant deals took place in the last 12 months?

M&A volumes in Singapore (both inbound and outbound) saw a significant jump in 2024, with financial and real estate sectors leading the way. However, dealmakers appear to be taking a more cautious approach in 2025, given the challenging geopolitical environment, with uncertainty over the sweeping tariffs imposed by the United States and regulatory scrutiny in areas relating to national security and competition.

Significant deals which took place in the last 12 months include:

• Singtel-KKR consortium's S$1.75 billion investment in ST Telemedia Global Data Centres – the largest digital infrastructure investment in 2024;
• the acquisition of Eu Yan Sang International Ltd by a consortium comprising Mitsui & Co, Ltd and ROHTO Pharmaceutical Co, Ltd;
• the S$1.6 billion acquisition by Warburg Pincus and Lendlease of certain portfolio of assets in Singapore from entities associated with Blackstone and Mr Lim Chap Huat, executive chairman of Soilbuild Group Holdings Ltd;
• the acquisition by TW Troy Limited, a special purpose vehicle managed by Tamarind Health, of TalkMed Group Limited by way of a scheme of arrangement;
• the acquisition by Blackstone and a buyer consortium formed with Canada Pension Plan Investment Board of AirTrunk, a leading Asian data centre operator, for an implied enterprise value of US$16.1 billion; and
• the acquisition by CapitaLand Investment of 40% of the SC Capital Partners Group (SCCP), a Singapore-based real estate investment manager, for S$280 million. The initial acquisition will increase CLI's funds under management by S$11 billion, cementing CLI's position as one of Asia-Pacific's largest managers of real estate investment trusts. CLI Begonia will acquire the remaining 60% stake in SCCP in tranches over the next five years.

8.2 Are any new developments anticipated in the next 12 months, including any proposed legislative reforms? In particular, are you anticipating greater levels of foreign direct investment scrutiny?

At this time, we do not anticipate greater levels of foreign direct investment scrutiny (without expressing a view on whether additional entities could be designated under the Significant Investments Review Act).

We do expect that additional regulatory reforms will arise from the work of the Equities Markets Review Group, comprising key individuals from the public and private sectors, which was established by the Monetary Authority of Singapore in 2024 to recommend measures to enhance the development of Singapore's equities market.

In February 2025, the Review Group announced its first set of measures to strengthen the competitiveness of Singapore's equities market. Its next phase of work, to be completed by the end of 2025, will likely result in another round of recommendations. The next phase includes introducing programmes to, among other things:

• sharpen listed corporations' focus on shareholder value;
• adapt market structures to attract retail liquidity; and
• strengthen investor protection by enhancing investor recourse avenues.

Following the February 2025 recommendations, the SGX released a consultation paper on proposed changes to its listing rules. As at the time of writing, there is no indication of when the conclusions of the consultation will be released.

9 Tips and traps

9.1 What are your top tips for smooth closing of M&A transactions and what potential sticking points would you highlight?

To ensure smooth closing of M&A transactions, it is important for parties to prepare a detailed closing checklist and timeline for the proposed completion of each item on the checklist. It is also common to conduct a closing 'dry run' for parties to confirm that all completion deliverables are satisfied and ready for the proposed closing of the transaction. Common sticking points that may delay or derail closing include:

• delays in obtaining requisite third-party or regulatory consents; and
• the need to rectify unresolved issues uncovered during the due diligence process.

With respect to regulatory approvals and consents, the parties should conduct self-assessment on the effects of any merger to determine whether the proposed transaction will substantially lessen competition in Singapore; if so, the parties may voluntarily notify their transaction to the Competition and Consumer Commission of Singapore for a decision on whether the transaction will substantially lessen competition in Singapore.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.