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The Shareholder Rights and Activism Review-South Africa Chapter

12 October 2017
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Overview

Historically, shareholder activism has not been an important force in South Africa. It is more common to see activism in the South African context from interested parties such as trade unions, rather than shareholders. More recently, following global trends attributable to an increasingly internationalised shareholder base, for instance, shareholder activism has been on the rise and the market has started to take note of the influence shareholders can wield. The regulatory framework in South Africa, which creates platforms for shareholder engagement and the enforcement of shareholder rights, has created a somewhat enabling environment for shareholder activism that is being embraced with increasing levels of participation.

While much of the publicised shareholder activism in South Africa has focused on aspects of corporate governance and executive remuneration, there has also been shareholder activism influence, although to a lesser extent, on mergers and acquisitions. While in most deals there is no legal obligation to consult with trade unions and other potential activists in advance of a transaction, it is often in the best interests of the parties to do so, since these activists often use the media and regulatory approval processes as hurdles to getting a deal through.

*Reproduced with permission from Law Business Research Ltd.