Section 388 of The Companies Act No. 17 of 2015: Merger relief
(1) This section applies if an issuing company acquires at least a ninety percent equity holding in another company under an arrangement providing for the allotment of equity shares in the issuing company on terms that the consideration for the shares allotted is to be provided—
(a) by the issue or transfer to the issuing company of equity shares in the other company; or
(b) by the cancellation of any such shares not held by the issuing company.
(2) If, in a case to which this section applies, the equity shares in the issuing company allotted under the arrangement in consideration for the acquisition or cancellation of equity shares in the other company are issued at a premium, section 386 does not apply to the premiums on those shares.
(3) If the arrangement also provides for the allotment of shares in the issuing company on terms that the consideration for those shares is to be provided—
(a) by the issue or transfer to the issuing company of non-equity shares in the other company; or
(b) by the cancellation of any such shares not held by the issuing company,
relief under subsection (2) extends to shares (if any) in the issuing company
allotted on those terms under the arrangement.
(4) This section does not apply to a case to which section 387 applies.
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