Newsletter
M&A AGREEMENT FOR PUBLIC-ISSUING COMPANY MAY STIPULATE CONDITIONS FOR AMENDMENT
The Regulations Governing the Acquisition or Disposition of Assets by Public Companies provide that when a public-issuing company participates in a merger, demerger, acquisition, or share swap, the share exchange ratio or acquisition price may not be altered except under circumstances as stipulated in the relevant agreement, and already publicly disclosed; and the agreement should define the conditions for any such change.
In an interpretation dated 20 February 2009, the Ministry of Economic Affairs stated that under the above provision, a public-issuing company may lay down conditions for alteration and may amend the transaction details on that basis. But M&A transactions by non-public-issuing companies must comply with the MOEA's ruling of 22 August 2006, which states that a merger or acquisition is a matter reserved for the shareholders' meeting, and the board of directors cannot amend a resolution of the shareholders' meeting, so that any adjustment or alteration can be made only by resolution of a subsequent extraordinary meeting of the shareholders.