Mergers & Acquisitions Comparative Guide

• Published date: 04 November 2025
• Law Firm: WongPartnership LLP
• Author: Mr Ling Pei Lih, Rachel Tan, Yuan Bo Chiang and Si Ya Chua

1 Deal structure

1.1 How are private and public M&A transactions typically structured in your jurisdiction?

Private M&A transactions are typically entered into by way of a sale and purchase agreement between a buyer and a seller for the sale and purchase of:

• shares in a private company; or
• assets and/or undertakings belonging to the seller.

Public M&A transactions (ie, transactions involving the acquisition of shares in a public corporation in Singapore) can be entered into in a similar manner to private M&A transactions if they are below thresholds regulated under the Singapore Code on Takeovers and Mergers. However, if takeover rules under the code are triggered, the structure could take one of several forms, including a general offer or a scheme of arrangement under Section 210 of the Companies Act 1967.

Notably, the code applies to:

• publicly traded corporations, registered business trusts (BTs) and real estate investment trusts (REITs) with a primary listing in Singapore; and
• public unlisted companies and unlisted registered BTs with:
• • more than 50 shareholders or unitholders; and
  • net tangible assets of S$5 million or more.

Broadly speaking, the Companies Act applies to Singapore-incorporated companies and the listing rules of the Singapore Exchange (SGX) apply to corporations (wherever incorporated), BTs and REITs, which are listed on the SGX.

For ease of reference in this Q&A, references to shares and shareholders should be read as including references to units and unitholders in a BT or REIT where applicable.

1.2 What are the key differences and potential advantages and disadvantages of the various structures?

For private M&A transactions undertaken by way of a share sale, the key advantage is the ease of execution, as it only involves the transfer of shares in the target. A private M&A transaction involving the sale and purchase of assets, on the other hand, will involve the transfer of each and every asset and the assumption of relevant liabilities comprising the sale. The key disadvantage of the former is the inability of the buyer to cherry-pick the assets it wishes to acquire (the buyer will also inherit all liabilities of the target); whereas in an asset transaction, the buyer is allowed to select the assets it wishes to acquire and to carve out the liabilities it wishes to leave behind.

Key differences between the different public M&A structures mainly relate to:

• timing;
• control of the process;
• whether a shareholders' meeting and resolution will be required and what approval thresholds must be met; and
• regulatory requirements (eg, relating to price and the opinion of an independent financial adviser).

General offers and schemes of arrangement are common structures for public M&A transactions. In a general offer (which may take the form of a voluntary general offer, a mandatory general offer or a partial offer), accepting shareholders will tender their shares in acceptance of the offer in return for consideration paid and/or satisfied by the offeror. A voluntary general offer must be conditional on an offeror receiving acceptances that will result in the offeror and its concert parties holding more than 50% of the voting rights of the target. The offeror may, subject to the approval of the Securities Industry Council (the body which administers and enforces the Singapore Code on Takeovers and Mergers), stipulate a higher acceptance condition if it intends for its offer to be contingent upon it being able to trigger compulsory acquisition rights under the Companies Act to acquire 100% of the voting rights of the target.

In a scheme of arrangement, the target proposes a scheme to its shareholders for shares to be transferred to the offeror in return for consideration to be paid and/or satisfied by the offeror. A scheme of arrangement:

• must pass a high bar of approval of a majority in number representing at least three-quarters in value of the members or class of members (excluding the offeror and its concert parties) present and voting (in person or by proxy) at the scheme meeting and
• requires court approval also.

The outcome of a scheme is binary (ie, all or nothing).

1.3 What factors commonly influence the choice of sale process/transaction structure?

The choice of an asset or share transaction will be driven by a variety of commercial and legal considerations. Key factors may include:

• the buyer's commercial objectives;
• ease of transfer and transaction complexity;
• due diligence findings, such as the liabilities of the target;
• stamp duty implications and tax considerations; and
• the impact on employees.

For instance, a share sale transaction may be preferred as it is generally more straightforward and allows the buyer to acquire all assets and liabilities of the target wholesale. However, if the purchaser only intends to acquire a specific asset or business line carried out by the target, an asset purchase transaction will be preferred, as it allows the buyer to cherry-pick the assets (and liabilities, if any) that it wishes to acquire.

As for the choice of public M&A structure where the Singapore Code on Takeovers and Mergers is triggered, please see question 1.2. More information can also be found in question 6.

2 Initial steps

2.1 What documents are typically entered into during the initial preparatory stage of an M&A transaction?

The typical preliminary document in M&A transactions is a non-disclosure agreement which aims, among other things, to protect the confidentiality of preliminary discussions and the disclosure of confidential information exchanged. In some cases, a non-binding letter of intent or memorandum of understanding to demonstrate interest and/or a term sheet (binding or non-binding) to lock down initial in-principle agreed terms (subject to definitive documentation) may also be entered into.

Parties may also enter into an exclusivity agreement or 'no shop, no talk' agreement, which is a type of deal protection mechanism that prohibits the seller from negotiating with, or soliciting bids from, other prospective buyers. Such arrangements provide the prospective buyer with an exclusive time period to conduct due diligence and engage in negotiations with the seller without competition from other prospective buyers.

For public M&A transactions where the Singapore Code on Takeovers and Mergers is triggered, the board of directors of the target should be mindful that any entry into an exclusivity agreement by the target should not limit or compromise the target board's fiduciary duties to:

• act in good faith; and
• act in the best interests of the target and its obligations under the code, not take any action that may have the result of frustrating an offer.

2.2 Are break fees permitted in your jurisdiction (by a buyer and/or the target)? If so, under what conditions will they generally be payable? What restrictions and other considerations should be addressed in formulating break fees?

Parties in transactions that are not regulated under the Singapore Code on Takeovers and Mergers are free to contract as they choose, save that parties should bear in mind that the imposition of a break fee may constitute a penalty clause which is unenforceable under Singapore law if the break fee does not represent a genuine pre-estimate of loss suffered by the non-defaulting party.

For break fees in public M&A transactions regulated under the code, the Securities Industry Council must be consulted at the earliest opportunity. The code provides that certain conditions must be met:

• the break fee must be minimal (normally no more than 1% of the value of the target calculated by reference to the offer price) and
• the target board and its financial adviser must provide certain information and confirmations in writing to the council - including:
• • that the break fee arrangements were agreed as a result of normal commercial negotiations and all arrangements have been fully disclosed;
  • that they believe the fee to be in the best interests of target shareholders; and
  • any relevant information concerning possible competing offerors.

2.3 What are the most commonly used methods of financing transactions in your jurisdiction (debt/equity)?

There is no one favoured method - the choice will depend on many factors, including:

• the size and structure of the transaction;
• the type of buyer;
• its financial muscle and availability of ready funds;
• tax considerations; and
• the costs of capital and financing.

In addition, for public M&A transactions regulated by the Singapore Code on Takeovers and Mergers, another relevant factor will be the confirmation of resources - see question 6.4.

2.4 Which advisers and stakeholders should be involved in the initial preparatory stage of a transaction?

A buyer will typically engage legal, financial and tax advisers in the initial preparatory stage of a transaction structure. Legal advisers will typically be involved early on in the transaction to advise, among other things, on structuring, timing and process. These can be external legal advisers or in-house legal teams of the relevant party, as the party deems appropriate given:

• its size and resources;
• its strategic intent;
• the materiality of the proposed transaction to it;
• its internal organisational structure; and
• its risk appetite and tolerance.

Similar considerations will come into play as to when and whether the buyer should appoint an external financial or tax adviser or whether its in-house teams will suffice.

As to whether senior management, a management committee, a board committee and/or the board of the relevant party should be involved and be required to authorise the potential transaction or any step thereof at each preliminary stage, this will depend on the constitution, internal bylaws, policies and procedures and the committee and board terms of reference of the relevant party.

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