Regulating Cross-Border Take-Overs And Mergers Post ASEAN Economic Community

Abstract

The ASEAN Economic Community (AEC) aims to establish a single market and production base within ASEAN, promoting the free flow of goods, services, investment, capital, and skilled labour. Consequently, cross-border take-overs and mergers in the Southeast Asian region have increased since the inception of the AEC. As Malaysia is a member of the Association of Southeast Asian Nations (ASEAN), ensuring that the rules related to cross-border take-overs and mergers are facilitative for foreign acquirers looking to initiate inbound cross-border take-overs and mergers in Malaysia is crucial. This research examines the regulatory challenges for foreign acquirers in initiating inbound cross-border take-overs and mergers in Malaysia. This research examines three parameters: the rules of take-overs and mergers, the proposed merger control framework, and the coordination between merger regulators. This research has employed doctrinal legal research and semi-structured interviews as its research methods. Furthermore, it encompasses a variety of methodological approaches, including the Analytical Approach, Comparative Approach, Historical Approach, and Semantic Network Analysis. The research finds that the take-overs and mergers regulations provide enhanced protection for shareholders in the target company, which can present challenges and opportunities for foreign acquirers. The proposed merger control framework introduces a hybrid notification system, potentially presenting challenges for foreign acquirers and regulators. Specific details like notification criteria, thresholds, economic efficiencies, and public interest considerations are currently not publicly available. The coordination and cooperation among regulators could be impeded in the presence of issues related to variations in the definitions of common terminology, information asymmetry, and enforcement, thereby raising concerns for foreign acquirers. This research suggests improving the take-over rules by incorporating the provision of break fee, enhancing the proposed merger control framework by adopting the voluntary notification, and adopting the best practices of coordination among merger regulators.