"Statutory controls over take-overs and mergers in New Zealand"

Abstract

This thesis is concerned with the statutory provisions relating to take-overs and mergers in New Zealand. These can be divided into two broad categories: company law provisions relating to the method by which the take-over is effected and the private interests affected by it, and public law provisions which are concerned with the impact of the take-over on the public interest. In the former category the main provision is the Compaines Amendment Act 1963 which governs the method by which a take-over bid may be made, and aims to provide shareholders concerned with enough time and information to decide whether or not to accept a take-over offer. But there are a number of other provisions relating to the compulsory acquisition of minority held shares after a take-over, and the method of financing of a take-over bid which are also discussed. The Companies Act also provides alternative procedures by which two companies can be amalgamated, each of which contains certain safeguards for shareholders and creditors who are affected. The one interest not protected by company law is that of the employees of companies involved in a take-over; their position is also discussed. In all cases deficiencies in law are pointed out and reforms suggested, many of which are adopted from comparable provisions overseas which are superior to the New Zealand provisions. In contrast to these provisions, the public law measures are concerned only with the result of the take-over with regard to the public interest. The first of these measures is the Commerce Act 1975 which is concerned with the effect of a take-over on competition, business efficiency and other related considerations. The Act provides for the screening of take-overs, with provision for any take-over considered to be contrary to the public interest to be outlawed. The Overseas Investment Regulations 1974 are concerned with a different aspect of the public interest: the possible loss of control of New Zealand's resources into the hands of overseas persons. Any take-over which would lead to the control of a New Zealand company passing to an overseas person must be vetted and approved before it is carried out. The procedures are considerably different from those of the Commerce Act, but complement that Act since different aspects of the public interest are considered under each provision. In both cases the method of control is a case by case one. The conclusion of this thesis is that this is the only method of control which can be justified on policy grounds since it is impossible to make sound policy generalisations about the benefits and detriments of mergers and take-overs. Nevertheless the complexity of the provisions can be, and is criticised, and their deficiencies pointed out. Comparative material from other jurisdictions is again used to highlight these faults and suggest some possible solutions. There is also an attempt to show the relationship between all the provisions and how they overlap and to point out the inconsistencies between them.