Term: AFFECTED TRANSACTION

A transaction defined in the Companies Act (71 of 2008) as one which will result in a change in the control of the company. This could be any type of merger, acquisition or even a share buy-back. The Companies Act is concerned with protecting shareholders and other interested parties from any insider trading or other fraud during an affected transaction. The takeover panel is tasked with examining affected transactions to ensure that they comply with the Act. The Act in section 117 defines an affected transaction as:

i) a transaction or series of transactions amounting to the disposal of all or the greater part of the assets or undertaking of a regulated company, as contemplated in section 112, subject to section 118(3);

ii) an amalgamation or merger, as contemplated in section 113, if it involves at least one regulated company, subject to section 118(3);

iii) a scheme of arrangement between a regulated company and its shareholders, as contemplated in section 114, subject to section 118(3);

iv) the acquisition of, or announced intention to acquire, a beneficial interest in any voting securities of a regulated company to the extent and in the circumstances contemplated in section 122(1);

v) the announced intention to acquire a beneficial interest in the remaining voting securities of a regulated company not already held by a person or persons acting in concert;

vi) a mandatory offer contemplated in section 123; or

vii) compulsory acquisition contemplated in section 124;

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